TaxTMI 
TaxTMI 
2026 (5) TMI 960
X X X X Extracts X X X X
X X X X Extracts X X X X
....cant is currently manufacturing EHV cables at the Halol Plant in Gujarat, wherein continuous catenary vulcanization (CCV) process is being used for insulation of such EHV cables. 3. The applicant is in the process of setting up of a new manufacturing plant in Waghodia, Vadodara for making EHV cables using the Vertical Continous Vulcanization (VCV) process for making EHV cables. The process of insulation of cable cores in CCV lines happens in horizontal heating tubes. In contrast, in VCV lines, the process of insulation of cable cores is done in vertical tubes. The manufacturing line is equipped with pulling capstans, extrusion crosshead and continuous vulcanization tubes (CV tubes) which are laid vertically in the plant. The VCV process is an advanced manufacturing technique used to produce EHV cables with superior reliability and performance. This method is defined by its triple-layer co-extrusion system, which applies three critical layers onto a conductor simultaneously in a meticulously controlled, clean environment and all 3 layers are extruded simultaneously in one step to prevent contamination and ensure perfect bonding. • Layer 1: Conductor Shield (Inner Sem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ipment on each floor is summarized below for reference: Sr.No. Equipment Floor No. Function 1 Pressure turn pulley Basement It diverts the cable core from basement to 7th floor. 2 Take-up Ground floor The take-up unit is the final component in the production process. Its function is to collect the finished insulated cable core and wind it precisely onto large drums or reels. 3 Payoff Ground floor Its sole purpose it to unwind the conductor wire from a large supply drum and feed it into the line in a controlled and precise manner. 4 Dancer Ground floor The dancer is a critical component for tension control and speed regulation and is a moveable pulley or roller system that helps to maintain consistent tension on the cable as it moves from one section of the line to another. 5 Accumulator First floor The accumulator is used to keep the line continuously running during payoff change time by accumulating sufficient conductor. 6 End seal Fifth floor This is the end of the vulcanization tube and maintains water pressure inside the cooling tube. 7 Vertical caterpillar Sixth floor The vertical c....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... seal 5th 2800 15 2 Tube guide roller 5th 200 16 2 Guide roller for conductor and cable 5th 100 17 2 Belt caterpillar (BCA42) 6th 11600 18 2 Topography Scanner 6th 900 19 2 Guide roller for conductor and cable 6th 100 20 2 Turn pulley (TPU 4000) 7th 5300 21 2 Guide roller for conductor 7th 50 22 2 Tube guide roller 7^th 200 23 2 Guide roller for conductor 8th 50 24 2 Tube guide roller 8th 200 25 2 Guide roller for conductor 9th 50 26 2 Tube guide roller 9th 200 27 2 Nitrogen Circulation System 10th 3160 28 2 Guide roller for conductor 10th 50 29 2 Tube guide roller 10th 200 30 1 Chiller and pumps 10th 2000 31 2 Guide roller for conductor 11^th 50 32 2 Tube guide roller 11^th 200 33 2 Guide roller for conductor 12th 50 34 2 Tube guide roller 12th 200 35 2 Guide roller for conductor 13th 50 36 2 Tube guide roller 14th 200 37 2 Belt caterpillar (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....avail ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacture of EHV cables, in terms of Section 17(5)(c) and (d) of the CGST Act, 2017? 10. Applicant's statement containing interpretation of law is as under: • The applicant's question is covered under Section 97(2)(d) of the CGST Act, 2017. • The inputs and input services procured by the applicant are in the course or furtherance of business of the applicant in terms of Section 16 of the CGST Act. • As per Section 2(59) of the CGST Act, 'input' means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. • As per Section 2(60) of the CGST Act, the expression 'input service' is defined as any service used or intended to be used by a supplier in the course of furtherance of business. • Section 16 of the CGST Act states that every registered person shall be entitled to take credit of input tax charged on any supply of goods or services or both by him which are used or intended to be used in the course or ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....includes such foundation and structural supports but excludes- (i) land, building or any other civil structures; (ii) telecommunication towers; and (iii) pipelines laid outside the factory premises; • As per the Collins dictionary, (i) 'equipment' as a noun is defined as whatever a person, group or thing is equipped with, the special things needed for some purpose, supplies, furnishings, apparatus etc., goods used in providing service esp. in transportation as the rolling stock of a railroad. (ii) 'apparatus' as a noun is defined as a collection of instruments, machines, tools, parts or other equipment used for a particular purpose. • As per Merriam Webstar Dictionary, (i) "equipment" is defined as the set of articles or physical resources serving to equip a person or thing such as the implements used in an operation or activity. (ii) 'Apparatus' is defined as a set of materials or equipment designed for a particular use. • As per Macmillan dictionary, 'equipment' is defined as the tools, machines, or other things that you need for a particular job or activity. •....
X X X X Extracts X X X X
X X X X Extracts X X X X
....¢ The applicant has submitted that tests such as common parlance test, functional test, durability test and close nexus test are required to be conducted to determine whether the particular product qualifies as plant and machinery. • In order to qualify as plant and machinery, in terms of Explanation to Section 17 of the CGST Act, two major requirements need to be satisfied: • It is an 'apparatus, equipment or machinery fixed to earth by foundation or structural support and • It is used for making an outward supply of goods or services or both. • Relying upon the definitions of the term 'apparatus', it can be said that VCV lines which are to be set up for manufacturing EHV cables will qualify as 'apparatus' since the system includes setting up of a collection of instruments, tools, parts or other equipment used for a particular well defined purpose. • It can also be said to be machinery as the complete VCV line is a combination of various things/components and the harmonious working of all such components results in the desired end of manufacturing EHV cables. • Further, (i) in common parlance test: th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 17 of the CGST Act. • In order to erect the VCV line in a vertical orientation at a height of 146 metres from ground level and 17 meters underground, the machinery has to be supported by concrete RCC shear wall and concrete foundation and the concrete structure in the form of VCV tower serves as a critical foundation and support system for the entire cable manufacturing process. The concrete structure provides a stable base for the tower components, ensuring that the entire system remains steady during cable production. It supports the weight of various equipments, including the extruder, crosshead, capstan and take up stand. The concrete structure absorbs vibrations, minimizing their effects on the cable manufacturing process. Furthermore, the proper alignment of the tower components is crucial for consistent cable insulation. The concrete foundation ensures accurate positioning of the extruder, crosshead and other elements. The concrete structure also defines the cable pathway from the pay-off stand to the take up stand. Thus, the concrete structure in a VCV tower plays a fundamental role in maintaining stability, precision and overall efficiency throughout th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant and machinery' under Explanation V of the CGST Act, it specifically excludes land, building or any civil structure; telecommunication towers and pipelines laid outside the factory from the scope of plant and machinery. • The term 'civil structures' appearing in the exclusion clause of the definition of 'plant and machinery' is not defined under the CGST Act. • As per P. Ramanatha Aiyar's Advanced Law Lexicon, 'Structure' is defined to be that which is built or constructed, an edifice or a building of any kind in the wildest sense, any production or piece of work artificially built up or composed of parts and joined together in some definite manner. The word building or structure is not defined in the pre-emption Act but it may be stated that every building is a structure though every structure is not a building and the word structure can be applied to a wall or a shed or any other unsubstantial erection for which the word building cannot be used (AIR 1924 Lah 172). 'Structure' by itself may not be a building but it may be analogous to a building, outhouse, shed, hut or stable. (Municipal Corporation of Greater Bombay vs. Indian Oil Corporation Ltd., A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ure of land, building or civil structures nor in the nature of telecommunication towers or pipelines outside the factory premises. • The applicant, placing reliance on the above circular submits that an inference can be drawn that since the VCV concrete tower is essential structure for holding the VCV line vertically, it can be said that it is an essential structure for manufacturing of EHV cables i.e. indispensable structure for carrying out the manufacturing operations and not explicitly excluded from the definition of 'plant and machinery' as provided in the Explanation to Section 17 of the CGST Act, 2017. VCV concrete tower will fall within the term 'plant and machinery' in terms of Explanation to Section 17 of the CGST Act, 2017. • In the light of the submissions the applicant submits that the ITC on inputs and input services procured for construction of concrete tower to erect and support the VCV lines in the factory of the applicant is eligible, as it is for foundation and structural support of plant and machinery in terms of Section 17 of the CGST Act. 11. Personal hearing was granted on 08.04.2026 wherein Ms. Priyanka Kalwani and Ms. Aanchal Tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f passenger lifts and material handling lifts installed therein, a staircase with emergency exit and fire hydrants on each floor. The VCV tower will be used exclusively for the purpose of manufacturing EHV cables. The process inside the VCV tower undertaken and equipment on each floor is summarized at para 5 above. The weight of the significantly heavy components to be placed on each floor to run the VCV line is enumerated at para 6 above. 15. The applicant has further submitted that the total load at different floors will be transferred through tower with RCC shear wall to the VCV tower footings, which is the foundation for the VCV tower with the dimension of the tower being 25 by 25 meters, that when the machine runs there will be a dynamic load on each floor which will be borne by the floor and subsequently the footing, hence, VCV tower has to be constructed in a manner so as to withstand such heavy loads along with the self-load of the tower, wind load and seismic load. For construction of the VCV tower, a Purchase order dated 29.05.2024 was issued to Shapoorji Pallonji and Company private limited (the supplier), that total expense is approximately 140.41 crores on which CGS....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e core from end seal to 7th floor. 8 Turn pulley Seventh floor It is used to divert the cable core from the 7th floor to the ground floor. 9 CV Heating tube Tenth floor It's primary function is to cross link or cure the extruded XLPE insulation on the cable. This process transforms the polyethylene from a thermoplastic to a thermoset material, giving it the crucial properties required for high-voltage cables. 10 Cooling tube 10th to basement The cooling tube is used to cool the cured cable with the help of water/nitrogen. 11 Extruder floor 15th floor This floor houses the 3 separate extruders in a single specialized triple crosshead. This setup allows conductor shield, XLPE insulation and insulated shield to be extruded onto the conductor in one seamless, high precision manner. In essence, there are 3 extruders and the X head to insulate 3 layers of semi-conductor and XLPE over the bare tapped conductor. 12 Capstan 16th floor The capstan is used to pull the conductor from the accumulator upto X head. It also maintains the core in the center of the tube between the exit caterpillar and the capstan. 13 Gravity Fe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... BPS 14th 640 39 1 Chiller and pumps 15th 2000 40 2 80mm Extruder 15th 3200 41 2 100 mm Extruder 15th 5400 42 2 200 mm Extruder 15th 23000 43 2 Splice box 15th 6600 44 2 Electrical panel for machine 15th 4600 45 2 Conductor preheater 15th 100 46 2 Extruder cooling system 15th 1000 47 2 Tube heating system 15th 100 48 2 IWT Unit 15th 1540 49 2 Tripple crosshead 15th 2400 50 2 Crosshead handling table 15th 940 51 2 Wheel Capston HSC 4000 16th 26000 52 4 Polymer discharge isolator 16th 8000 53 2 Clean room 16th 3000 54 2 Semicon drying system 17th 7572 55 2 Clean room 17th 3000 56 2 Curing tube 10th to 14th 10600 57 2 Cooling tube 10th to basement 22782 In short, the applicant has upgraded their technology to manufacture EHV cables by using VCV process. For the same, the VCV manufacturing line is required to be supported by a concrete structure. Thus, the primary issue is about the eligi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....communication towers; and (iii) pipelines laid outside the factory premises. 21. We find that irrespective of the fact that whether the event of construction of the VCV tower is a works contract or otherwise, in terms of section 17(5) (c) and (d), plant and machinery stand excluded from the apportionment of credit and blocked credits. Further, although "Structural support" has not been defined in the CGST Act, it is evident from the meanings given in renowned dictionaries such as Cambridge, Oxford and Merriam Webstar that 'structural support' refers to a physical or foundational element that forms part of a larger structure and serves the purpose of holding, bearing, or stabilizing loads which ensures that the structure or equipment it supports remains secure from external forces. Thus, the concrete structure in the form of VCV tower provides structural support with the necessary height and infrastructure while maintaining the structural integrity, stability, precision and overall efficiency of the support system for manufacture of EHV cables and is thus an essential structural support to the entire VCV machine line in the manufacture of EHV cables. 22. On going thro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....construction of an immovable properly (other than plant and machinery) except where it is an input service for further supply of works contract service; or ii. goods or services or both received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account including when such goods or services or both are used in the course or furtherance of business. 2. Explanation in section 17 of CGST Act provides that the expression "plant and machinery" means apparatus equipment and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes land building or any other civil structure' telecommunication towers and pipelines laid outside the factory premises. 3. Ducts and manholes are basic components for the optical fiber cable (OFC) network used in providing telecommunication services. The OFC network is generally laid with the use of PVC ducts/sheaths in which OFCs are housed and service/connectivity manholes which serve as nodes of the network and are necessary for not only laying of optical f....