Bharat Aluminium Company Limited Vs State of Chhattisgarh (Chhattisgarh High Court)
Chhattisgarh High Court held that the petitioner would not be entitled for Input Tax Credit [ITC] to electrical energy consumed for maintenance of its township since it is not in the course or furtherance of business in terms of section 2(17) r.w.s. 16(1) of the CGST Act.
Facts- The petitioner is engaged in manufacture, sale and export of aluminium products and it has its factory premises at Korba, Chhattisgarh. For the purposes of its business operations, the petitioner has established two power plants of 540 MW and 1200 MW at Korba. The petitioner imports coal on due payment of Goods and Services Tax (GST) Compensation Cess and uses the same for generation of electricity using the two power plants which is further used for manufacture of aluminium products. The petitioner also claims to maintain a residential township for its employees.
It is the case of the petitioner that the electricity which is generated from the two power plants is used in three manners: (a) firstly, electricity from the power plants is used for manufacturing operations within the factory premises; (b) secondly, some portion of the electricity is sold to State Electricity Boards; and (c) lastly, some portion of the electricity (540 MW) is supplied to the township for its employees, and the present dispute is confined to the portion of electricity which is supplied to the township of its company.
