Captive Consumption

[umeshkumar jhawar]

Dear Experts

1. What will be tratment for ITC availed on manufactring of Finished Goods used for Captive Consumption for Factory Building Construction.

2. What will be tratment for ITC availed on manufactring of Finished Goods used for Captive Consumption for Plant & Machinery Installation

3. Whether we should raise self Invoice mentioning Basic Amount of Finished Goods?

AI Summary

Self-supply treatment for captive consumption: dispute over GST liability, ITC eligibility, and requirement to raise self-invoices.
Whether use of manufactured finished goods by the same registered person for construction or for plant and machinery foundations constitutes a taxable supply is disputed: one view treats it as self-supply necessitating a self-invoice and GST payment, while other views conclude no supply arises absent a statutory deeming provision and thus no outward tax or self-invoice is required. ITC reversal under Section 17(5)(d) is debated, given the exclusion for plant and machinery foundations and lack of a clear mechanism to compute reversal when manufactured goods are later used in construction; accounting treatment should capitalize transferred inventory into fixed assets.