TaxTMI 
TaxTMI 
ITC on Electrical items(Wires, Bulb, LED,) are claimed. DRC-01 is issued concerning ITC claimed on electrical items. All of these items are capitalized under the furniture head. Electrical items are necessary to carry on the business activities and how it is valid to issue DRC-01 on this matter. Kindly guide.
Ineligible ITC
06 Jan 2024 
11 Replies 
13974 Views Asked by
Input tax credit eligibility turns on whether supplies are assimilated as immovable property or qualify as plant and machinery.
ITC eligibility depends on whether supplies and their installation constitute "construction of an immovable property" and are therefore blocked under Section 17(5)(c)-(d), or qualify as plant and machinery under the Section 17(5) explanation. The works contract definition in Section 2(119) covers erection and installation, but an item's permanence, mode of fixation, and capitalization in accounts determine whether it is assimilated into the building (blocked) or remains plant/machinery or movable (eligible for ITC). (AI Summary)
ITC eligibility depends on whether supplies and their installation constitute "construction of an immovable property" and are therefore blocked under Section 17(5)(c)-(d), or qualify as plant and machinery under the Section 17(5) explanation. The works contract definition in Section 2(119) covers erection and installation, but an item's permanence, mode of fixation, and capitalization in accounts determine whether it is assimilated into the building (blocked) or remains plant/machinery or movable (eligible for ITC). (AI Summary)