Eligibility for Input Tax Credit on Solar Plant Services under CGST Act

The applicant is eligible to claim input tax credit amounting to Rs. 8,47,458/- for the GST paid on the EPC services of the 265KW rooftop solar power plant provided by M/s. KCP Solar Industry, as it complies with the provisions of Sections 16(1), (2), and 17(5) of the CGST Act, 2017. However, no ruling was made regarding the eligibility to claim input tax credit for inputs and services used in running the solar plant due to the lack of detailed information provided by the applicant.

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Issues Involved:
1. Eligibility to take input tax credit (ITC) on inputs/capital goods or input services used in the Design, Engineering, Supply, Execution (EPC) of a 265KW Roof Top Grid Solar PV Power Plant.
2. Eligibility to take input tax credit for inputs and services for running the solar plant.

Detailed Analysis:

Issue 1: Eligibility to Take ITC on Inputs/Capital Goods or Input Services for EPC of Solar Power Plant

The applicant, engaged in the business of extracting and processing edible oils, has installed a captive rooftop solar power plant to generate electricity for its operations. The main question is whether the applicant can claim ITC on the inputs, capital goods, or input services used in the EPC of the solar plant.

The applicant has provided necessary documents, including purchase orders, invoices, and compliance with GST rules. The solar power plant has been capitalized in the books of accounts, and the GST component has not been depreciated, fulfilling the conditions under Section 16(3) of the CGST Act, 2017. The electricity generated is used exclusively for manufacturing taxable goods, making it eligible for ITC under Section 16(1) and (2).

The ruling clarifies that the solar power plant qualifies as "plant and machinery" under the GST Act. The related credits are not blocked under Section 17(5) since the installation is considered a works contract for plant and machinery. Therefore, the applicant is eligible to claim ITC amounting to Rs. 8,47,458/- for the GST paid on the EPC services provided by M/s. KCP Solar Industry.

Issue 2: Eligibility to Take ITC for Inputs and Services for Running the Solar Plant

The applicant sought a ruling on the eligibility to claim ITC for inputs and services used in running the solar plant. However, the applicant did not furnish specific details or a list of such inputs and services. Due to the lack of substantiation, the authority refrained from passing a ruling on this matter.

Conclusion:

1. Eligibility to Take ITC on EPC of Solar Power Plant: The applicant is eligible to claim ITC amounting to Rs. 8,47,458/- for the GST paid on the EPC services of the 265KW rooftop solar power plant provided by M/s. KCP Solar Industry, as it complies with the provisions of Sections 16(1), (2), and 17(5) of the CGST Act, 2017.

2. Eligibility to Take ITC for Running the Solar Plant: No ruling is pronounced due to the absence of detailed information on the inputs and services proposed to be used for running the solar plant.

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