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Eligibility of Input Tax Credit (ITC) on Lease of a Sugar Factory under a Rehabilitate-Operate-Transfer (ROT) Agreement Covering Land, Building, Plant & Machinery, and Corporeal Rights
Eligibility of Input Tax Credit (ITC) on Lease of a Sugar Factory under a Rehabilitate-Operate-Transfer (ROT) Agreement Covering Land, Building, Plant & Machinery, and Corporeal Rights
13 Jul 2026 
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Input tax credit on a single factory lease may cover the entire leasing service, subject to conditions and apportionment.
Input tax credit on GST charged for leasing a functioning sugar factory under a Rehabilitate-Operate-Transfer arrangement may extend to the entire taxable leasing service where the lease is documented as a single business lease and invoiced as one taxable leasing service. Credit need not be limited to plant and machinery, subject to fulfilment of input tax credit conditions and documentation requirements. Use of leased assets for both taxable and exempt outward supplies requires proportionate credit reversal or apportionment under applicable rules. (AI Summary)
Input tax credit on GST charged for leasing a functioning sugar factory under a Rehabilitate-Operate-Transfer arrangement may extend to the entire taxable leasing service where the lease is documented as a single business lease and invoiced as one taxable leasing service. Credit need not be limited to plant and machinery, subject to fulfilment of input tax credit conditions and documentation requirements. Use of leased assets for both taxable and exempt outward supplies requires proportionate credit reversal or apportionment under applicable rules. (AI Summary)