In re Shibaura Machine India Private Limited (GST AAAR Tamilnadu)
The ruling pronounced by the AAR in Advance Ruling No.32 / ARA/ 2025 dated 18.08.2025 is upheld and accordingly, the appeal filed by the Appellant is dismissed.
The Appellate Authority for Advance Ruling, Tamil Nadu examined the eligibility of Input Tax Credit (ITC) on electrical works carried out for expansion of a manufacturing factory. The appellant had entered into a separate contract for supply, installation, testing, and commissioning of electrical works for a new factory building adjacent to its existing facility. The scope of work included LT panels, bus-ducts, LT electrical works, lightning protection systems, light fixtures, and associated civil works. The appellant sought an advance ruling on whether ITC was available on such electrical works and, if so, the timeline for availing ITC on advance payments.
The Authority for Advance Ruling had earlier held that ITC on the electrical installation work was not admissible, as it was blocked under Sections 17(5)(c) and 17(5)(d) of the CGST/TNGST Acts, 2017, being works contract services and construction of immovable property other than plant and machinery. Aggrieved, the appellant appealed, contending that the electrical installations were movable in nature, could be dismantled and reinstalled, and therefore did not constitute immovable property. Alternatively, it was argued that the installations qualified as “plant and machinery” since they were essential infrastructure enabling the operation of manufacturing machinery and outward supply of goods.
