Our client has a Rolling Mill (RM)plant, supplies TMT to customers and also have captive consumption.Relevant ITC has been appropriately taken on Rolling Mills during the construction of such RM as per the Laws.
Query:
1-Whether, Rule 43 of the CGST Rule,2017 is applicable in this case because of the captive consumption?
2- whether the input tax credit in respect of Capital Goods used in Rolling Mill will be reversed to the extent of qty. captively consumed?
3-Whether Input tax credit in respect of Capital Goods consider only for goods or both goods and service, if needs to be reversed?
No ITC reversal for taxable final products under Rule 43, CGST 2017; ITC not allowed for immovable property construction. A client operating a Rolling Mill plant inquired about the applicability of Rule 43 of the CGST Rule, 2017, concerning input tax credit (ITC) on capital goods used for captive consumption. The discussion clarified that no ITC reversal is required if the final product is taxable, even with captive consumption. Additional clarification was sought regarding the use of TMT for constructing immovable property within the plant. It was explained that ITC on construction of boundary walls and internal roads is not admissible under section 17(5)(c) of the CGST Act, 2017, as these are considered immovable property. (AI Summary)
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