In re KEI Industries Ltd (GST AAR Gujarat)
M/s KEI Industries Ltd, engaged in manufacturing Extra-High Voltage (EHV), Medium Voltage (MV), and Low Voltage (LV) power cables, sought an Advance Ruling regarding the eligibility of Input Tax Credit (ITC) under the CGST Act, 2017. The company is constructing a Vertical Continuous Vulcanization (VCV) tower in Gujarat to enhance its manufacturing capabilities. The VCV tower, reaching approximately 152 meters in height, is integral to the production process, requiring structural support to sustain dynamic loads, self-weight, wind, and seismic forces. KEI Industries argued that the inputs and input services used for constructing this tower should be eligible for ITC, as the structure serves as foundational support for manufacturing machinery.
KEI Industries contended that the VCV tower qualifies as “plant and machinery” per Section 17 of the CGST Act, as it is a fixed structure essential for the manufacturing process. The company relied on various judicial precedents to support its claim, asserting that the structural components are necessary for business operations. They highlighted that ITC restrictions do not apply to construction used for plant and machinery, including its foundation and support structures. The ruling by the Authority for Advance Ruling (AAR) Gujarat would determine whether such ITC claims are valid based on legal definitions and functional applicability under GST law.
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