2026-VIL-02-AAAR
  1. Home
  2. 2026-VIL-02-AAAR

SGST AAAR

GST – Tamil Nadu AAAR - Eligibility of input tax credit on electrical works for factory expansion – Appellant aggrieved by the impugned AAR order holding that the ITC is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017 as the electrical works constitute construction of an immovable property - Whether the input tax credit is eligible on the electrical works carried out for the expansion of the factory – HELD - For ITC to be eligible under Section 16(1) of the CGST Act, the goods or services should be used or intended to be used in the course or furtherance of business. However, Section 17(5)(c) and 17(5)(d) of the CGST Act block the ITC on works contract services and goods/services received for construction of an immovable property, except for plant and machinery - The electrical installations like LT panels, bus ducts, electrical works, etc. do not qualify as 'apparatus, equipment or machinery' fixed to the earth. These installations, though movable in nature, are meant for the permanent beneficial enjoyment of the land and therefore constitute immovable property. Once the electrical installations are attached to the earth or fastened to anything attached to the earth, they become part of the immovable property, even if they can be detached and moved - Further, these installations do not have an independent existence and are tailor-made for the factory, and hence are not marketable. Therefore, the ITC on the electrical works contract is not eligible as it is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST Act - The ruling of the AAR is upheld and the appeal is dismissed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GST Jan '26 Burning issues:
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?