TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1180
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....irely in the course or furtherance of business. The cost of such common services, including the use of solar-generated electricity, is recovered from licensees through monthly common area maintenance (CAM) invoices. 2. In this Rulings, a reference hereinafter to the provisions of the CGST Act, Rules or the Notifications issued thereunder shall include a reference to the corresponding provisions of the KSGST Act, Rules or the Notifications issued thereunder. 3. The details of the issues on which advance ruling is sought are given above and are not being reproduced. 4. The contentions of the applicant: 4.1. As per Section 16(1) of the Central Goods and Services Tax (CGST) Act, 2017, a registered person is entitled to avail input tax credit (ITC) on any supply of goods or services or both received by him, provided such goods or services are used or intended to be used in the course or furtherance of business. The eligible credit shall be credited to the electronic credit ledger of the said registered person. 4.2 The applicant submits that they have installed a 500 KW solar power plant at the rooftop and parking area of the commercial premises. The energy generated from this plant....
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.... power plant at its commercial premises. As per the details submitted, the solar power plant consists of the following components-Solar panels, Solar inverters, and Solar consumable kits. The applicant has stated that the entire energy generated from the said solar installation is used exclusively for captive consumption to operate common facilities within the mall, including lighting, air-conditioning systems, CCTV surveillance, Network infrastructure, UPS systems, and lifts and escalators. These utilities are essential for the functioning of the mall and form an integral part of the taxable Common Area Maintenance (CAM) services provided by the applicant to its licensees on a monthly basis. Accordingly, the electricity generated through the solar plant is used wholly and exclusively in the course or furtherance of business, specifically for making taxable outward supplies falling under SAC codes 997212, 998599, and 998366. Therefore, the question to be determined is whether such usage-together with the nature and manner of installation of the solar plant-qualifies the applicant for input tax credit under Section 16(1) of the CGST Act, 2017, and whether the said plant falls within....
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....ion 2(19) of the CGST Act, "capital goods" means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business. It is, therefore, evident that the solar power plant in question qualifies as capital goods. Furthermore, the solar panels and systems are mounted without major civil structures and can be dismantled without significant damage or effort. As such, they do not qualify as immovable property under general legal interpretation. Hence, the restrictions under Section 17(5)(c) and 17(5)(d) of the CGST Act are not applicable in the present case. 6.4 The above cited provisions are as follows: * Clause (c): ITC is not available on works contract services when supplied for the construction of an immovable property (other than plant and machinery), except where it is an input service for further supply of works contract service. * Clause (d): ITC is not available on goods or services or both received by a taxable person for the construction of an immovable property (other than plant and machinery) on their own account, even when such goods or services ....
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....rectly supports the position that solar installations not permanently embedded to the earth and capitalised in the books of accounts qualify as plant and machinery and are not restricted under Section 17(5)(d). II. AAR, Tamil Nadu-Order No. 19/ARA/2021 dated 18.06.2021 in the case of M/s. KLF Nirmal Industries Pvt. Ltd. The Tamil Nadu Authority for Advance Ruling held: "The applicant is eligible to avail input tax credit to the extent of Rs. 8,47,458/- paid as GST on the procurement of design, engineering, supply, and execution (EPC) of a 265KW rooftop grid-connected solar photovoltaic (PV) power plant." This decision further affirms that GST paid on EPC services for solar rooftop plants is eligible for ITC, provided the installation supports business operations and satisfies the conditions under Section 16 of the CGST Act. These rulings reinforce the view that rooftop solar power plants when used in the course or furtherance of business, not permanently embedded in the earth, and treated as capital goods are eligible for input tax credit and are not hit by the restrictions under Section 17(5)(c) or (d) of the CGST Act. 6.7 However, the eligibility for such ITC in full or par....