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The Applicant was engaged in the business of providing services of maintenance of immovable property to tenants. The Applicant sought Advance ruling on whether they are eligible for claiming ITC on solar power panels procured and installed by it.
The AAR observed that electrical energy is ‘goods’ and exempted. Hence, the Applicant's provision of solar-generated electricity to tenants constitutes a supply of exempted items. Hence, ITC on solar panels is ineligible. Subsequently, the AAR did not discuss coverage of solar plant under Section 17(5) of the CGST Act or on inclusion of value of electricity charges in value of supply.
VBC Associates [2022-VIL-257-AAR]
It would be pertinent to note that in the instant case, the Applicant had been treating supply of electrical energy as part of composite supply of rental services. Accordingly, Solar Panels cannot be said to be used for making exempted supply. It would further be pertinent to note that the Rajasthan AAR in RE: Pristine Industries Limited [RAJ/AAR/2021-22/16], had held that solar power plant is classifiable as plant and machinery, and therefore, the ITC thereon is not blocked u/s. 17(5) of the CGST Act.
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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