Opinion required on GST ITC eligibility on CETP / drainage contribution and ROU charges paid to GIDC

[Yogesh Ashar]

A registered manufacturing company has received demand notes from GIDC towards CETP contribution, drainage connection / 90 MLD drainage line contribution, ROU permission charges for laying pipeline, interest / penal interest and certain refundable deposits. GST is charged separately on contribution / service components in the demand notes. The facility is required for discharge / treatment of industrial effluent and appears necessary for carrying on manufacturing operations in the industrial estate.

Kindly advise:

1. Whether ITC under Section 16 of the CGST Act, 2017 is available on GST charged by GIDC on CETP contribution / drainage connection contribution / 90 MLD drainage line contribution.
2. Whether such payment is eligible as an input service used in the course or furtherance of business, or whether it may be disputed as capital contribution towards immovable infrastructure.
3. Whether Section 17(5)(c)/(d) can restrict ITC where the demand relates to drainage infrastructure, effluent line, pipeline, CETP facility or common industrial infrastructure.
4. Whether ITC treatment will differ for:
   • CETP contribution;
   • 90 MLD drainage contribution;
   • GST on interest / penal interest;
   • ROU rent / permission fee;
   • refundable deposit / security deposit;
   • pipeline / underground line laid by the company at its own cost.
5. Whether ITC can be claimed on GIDC demand note itself, or only after proper GST tax invoice / debit note with GSTIN and reflection in GSTR-2B.
6. Kindly also provide relevant favourable / adverse case laws, advance rulings or circulars, and precautions / documentation required to defend the ITC claim during GST audit or departmental scrutiny.

AI Summary

Input tax credit on CETP and drainage charges turns on whether the facility is common infrastructure or immovable property.
Input tax credit on GST charged by GIDC for CETP contribution, drainage connection contribution, 90 MLD drainage line contribution, ROU permission charges, interest or penal interest, refundable deposits, and pipeline-related payments depends on the nature of each component and the character of the underlying facility. Where the drainage and CETP system is a common industrial infrastructure owned, operated, and maintained by GIDC for effluent treatment in the course of manufacturing business, the payments are discussed as potential input services rather than construction of immovable property on the company's own account.