RCM Credit_ Freight charges used in Civil work and Plant & Machinery

[Prem Choudhary]

Dear Expert

Our Company are manufacturing Cement and having big infrastructure of Factory and Employee residential Colony. My query is related to GST amount paid under RCM on fright charges for transporting of Sand and stone chips etc are eligible for input tax credit in following Scenario:-

1. If the freight Charges is paid for transporting materials which are used in Civil work in factory premises ?

2. If the freight Charges is paid for transporting materials which are used in SILO (Stocking of Cement ) in factory premises ?

3. If the freight Charges is paid for transporting materials which are used in plant and Machinery installation ?

4. If the freight Charges is paid for transporting materials which are used in plant and Machinery installation and also in Colony Repair ?

please advice

[KASTURI SETHI]

Query-wise my views are as under:-

1. Not admissible

2. Depends upon the usage of cement for what type of construction.

3. Allowed.

4. Allowed for installation of plant and machinery but not allowed for colony repair.

Also go through the order AAR:-

2018 (18) G.S.T.L. 508 (A.A.R. - GST  = 2018 (10) TMI 748 - AUTHORITY FOR ADVANCE RULING, ODISHAIN RE : NATIONAL ALUMINIUM COMPANY LTD.

[Ganeshan Kalyani]

Freight for transporting material for civil work in the factory is not eligible for credit .

AI Summary

Cement company seeks input tax credit on RCM freight charges; credit denied for civil work, allowed for plant setup. A company involved in cement manufacturing inquires about the eligibility for input tax credit on GST paid under Reverse Charge Mechanism (RCM) for freight charges. The questions concern transporting materials used in civil work, silo stocking, plant and machinery installation, and colony repair. Expert responses indicate that input tax credit is not admissible for civil work freight charges. Credit is allowed for freight related to plant and machinery installation but not for colony repairs. The eligibility for silo stocking depends on the specific usage of cement in construction.