In re Apar Industries Ltd (GST AAR Gujrat)
In the matter of In re Apar Industries Ltd., the Gujarat Authority for Advance Ruling examined whether input tax credit (ITC) could be availed on inputs and input services used for setting up a Continuous Catenary Vulcanization (CCV) Tower used in the manufacture of high-voltage cross-linked polyethylene (XLPE) insulated electrical cables.
The applicant, engaged in manufacturing conductors, cable solutions, telecom solutions, specialty oils, and lubricants, was establishing a new factory in Vapi, Gujarat. The facility included a conductor manufacturing unit, CCV Tower, CCV Cable unit, and HT/LT unit containing heavy machinery essential for cable production.
The CCV Tower was described as a specialized vertical steel structure designed to maintain the technical elevation and catenary angle required during the vulcanization process. According to the applicant, the tower enabled controlled heat and pressure distribution necessary for cross-linking polymer molecules and ensuring insulation quality in the cables. The structure housed various machines and systems at different levels, including pay-off stands, accumulators, conductor guiding systems, extruders, caterpillar units, cooling systems, and raw material handling areas.
The applicant had engaged an EPC contractor for engineering, procurement, and construction of the tower. GST paid on goods and services used for constructing the tower was sought as ITC. The applicant argued that the CCV Tower constituted an integral structural support for the manufacturing machinery and therefore qualified as “plant and machinery” under the Explanation to Section 17(5) of the CGST Act. Consequently, the ITC restriction under Sections 17(5)(c) and 17(5)(d), relating to immovable property, should not apply.
