Credit of input tax of GST paid

[S.C. WADHWA]

Dear Experts,

We are manufacturers of Food items both as nil rate of GST and taxable. We are going to install a Zero Discharge Plant for Upgradation of ETP. My query is whether GST paid on this plant will be available as input tax credit fully or in some proportion. Please give your expert advise.

REGARDS,

WADHWA

[Shilpi Jain]

If this plant is used commonly for taxable and exempt supplies then monthly u will be ineligible for credit in proportion of the exempt turnover.

[Shilpi Jain]

Say 60k is total credit on plant. So monthly credit would be 1k.

Assume every month 40percent is exempt turnover in 1st month, 400 to be reversed in first month.

So on in the next months

[SOWMYA CA]

Also need to ensure that credit on GST paid is not taken Land, building or other civil structures and on pipeline laid outside the factory premises on account of explicit block u/s. 17(5)

[Ganeshan Kalyani]

If the additional plant bought to enhance ETP would be capitalised as ETP in books then ITC is eligible.

[Shilpi Jain]

Any support structure of the palnt and machinery or foundation structures will also be eligible for credit

AI Summary

Input tax credit availability for shared treatment plant hinges on apportionment and reversal for exempt use.
Availability of input tax credit for the zero discharge/upgradation plant depends on exclusive use for taxable supplies; where the plant is common to taxable and exempt outputs credit must be apportioned and the exempt-attributable portion reversed. Capitalisation of the asset as the effluent treatment plant supports ITC eligibility for the capital good, while blocked-credit categories like land, buildings, civil structures and pipelines outside premises remain disallowed.