GST--Blocked input tax credit

Input Tax Credit on Solar Roof Plant--Whether Blocked Under Section 17(5)(c) or 17(5)(d)

D.K. Saxena

The learned author seeks to examine an issue as to whether solar roof plant can be said to be part of building and, therefore, ITC of tax paid on installation of solar roof plant would be regarded as blocked ITC under section 17(5)(c) or section 17(5)(d) of the Central Goods and Services Tax Act, 2017.

1. Eligibility and conditions for taking input tax credit

Section 16 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals eligibility and conditions for taking input tax credit. As per sub-section (1) of section 16, every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

The conditions for taking input tax credit are enshrined under sub-section (2) of section 16, according to which no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services or both to him unless, -

(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;

(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;

(b) he has received the goods or services or both.