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

Input tax credit eligibility for RCM freight: denied for factory civil works, allowed for plant and machinery, conditional for stocking. Input tax credit for RCM-paid freight is denied for materials used in factory civil works; availability for silo stocking depends on the end use of cement; credit is allowable for materials used in plant and machinery installation; where freight serves both machinery installation and colony repair, credit is only for the machinery portion and not for colony repair. An AAR on similar facts is referenced as guidance.