GST Input Tax Credit for Industrial Machinery Support Structures
The Gujarat Authority for Advance Ruling confirmed that businesses can claim Input Tax Credit on civil structures that act as essential support for machinery.
- Ruling
- ADVANCE RULING NO. GUJ/GAAR/R/2026/17, dated 08.05.2026
- Dated
- 08 May 2026
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Polycab India asked if they could claim ITC on a concrete tower.
- The tower supports specialized machinery for manufacturing EHV cables.
- The Authority ruled the tower is part of the plant and machinery.
- ITC is not blocked for structures essential to operating industrial equipment.
In short
The company asked if they could claim Input Tax Credit (ITC) on the construction of a concrete tower used to support their manufacturing machinery. The tax authority had to decide if this tower was a building—where credit is blocked—or part of the machinery itself.
What has changed
How it worked before
Businesses often assumed that any concrete or civil structure built at a factory site was considered immovable property, making the GST paid on its construction ineligible for credit.
What has changed
The Authority decided that if a structure is functionally essential for the operation of machinery, it qualifies as 'plant and machinery.' This means the GST paid on materials and services for such structures can be claimed as credit, lowering the overall cost of setting up industrial plants.
Who this affects
Manufacturers who build specialized civil structures, foundations, or towers specifically to house or support heavy industrial production equipment.
An example
A textile company builds a reinforced concrete platform to hold heavy spinning machines that would vibrate and fail on a standard floor. They ask if they can claim ITC on the platform construction. Based on this ruling, they could argue the platform is part of the machinery, not just a building, and therefore eligible for credit.
What you should do
This ruling only applies to the company that asked for it. If you are in a similar position, you should consult your tax advisor to see if your specific structure meets the 'functionally essential' test before claiming credit.
If you do nothing
If you claim credit for construction costs without a strong legal basis, the tax department may issue a demand notice for the tax amount plus interest and penalties. Relying on a ruling that does not apply to your specific facts can lead to costly litigation.
The terms explained
- Input Tax Credit
- The tax a business pays on its purchases that it can use to reduce the tax it owes on its own sales.
- Blocked Credit
- Specific items or services for which the government does not allow businesses to claim a tax refund or credit.
- Plant and Machinery
- Apparatus, equipment, and machinery fixed to the earth by foundation or structural support that are used for making outward supplies.
The ruling in detail
Authority for Advance Ruling
M/s. Polycab India Limited
ADVANCE RULING NO. GUJ/GAAR/R/2026/17, dated 08.05.2026 · Gujarat
Questions before the authority
- Whether the applicant is eligible to avail ITC on inputs and input services used for construction of concrete tower to support and erect the VCV lines at the factory of the applicant, for manufacture of EHV cables, in terms of Section 17(5)(c) and (d) of the CGST Act, 2017?
Facts
The applicant is setting up a new manufacturing plant for Extra High Voltage (EHV) cables using a Vertical Continuous Vulcanization (VCV) process. This process requires a specialized 163-meter concrete tower to support the VCV machinery, which is essential for the vertical orientation and structural integrity of the production line. The applicant sought a ruling on whether the input tax credit (ITC) for the construction of this concrete tower is blocked under Section 17(5)(c) or (d) of the CGST Act.
Ruling
| Question | What the authority ruled |
|---|---|
| Eligibility of ITC on construction of concrete tower for VCV lines | Yes, the applicant is eligible to avail ITC. The tower is considered essential structural support for plant and machinery. |
The Authority ruled that the applicant is eligible to avail ITC on the inputs and input services used for the construction of the concrete VCV tower. It concluded that the tower serves as a critical structural support for the VCV machinery, which qualifies as plant and machinery, and is therefore not excluded from ITC eligibility.
Reasoning
The Authority determined that the VCV line qualifies as **plant and machinery** because it is an apparatus fixed to the earth by foundation or structural support used for making an outward supply. Since the concrete tower is essential for the structural support and operation of this machinery, it falls outside the scope of the **blocked credit provisions** under Section 17(5)(c) and (d). The ruling relied on the definition of plant and machinery in the Explanation to Section 17 and drew an analogy from a CBIC circular regarding ducts and manholes used in telecommunication networks.
Provisions relied on
- Section 16 of the CGST Act, 2017
- Section 17(5)(c) of the CGST Act, 2017
- Section 17(5)(d) of the CGST Act, 2017
- Explanation to Section 17 of the CGST Act, 2017
- CBIC Circular No. 219/13/2024-GST dated 26.06.2024
For the practitioner
This ruling provides a favorable precedent for manufacturers who construct specialized civil structures that are **functionally essential** for supporting heavy industrial machinery. It confirms that such structures can be classified as structural support for plant and machinery, thereby bypassing the ITC blockage for immovable property. Practitioners can use this to argue for ITC eligibility on civil works that are integral to the operation of specific plant and machinery.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/3-polycab_india_ltd_0001_compressed_1_compressed.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
About Patron Accounting LLP
Patron Accounting LLP is a CA and CS-led accounting and compliance firm that has been working with businesses across India since 2019. We handle the work that keeps a company correct with every department it answers to: day-to-day bookkeeping and accounting, GST registration and returns, income tax filing and assessments, TDS, payroll and PF/ESI, company and LLP incorporation, ROC and MCA compliance, statutory and internal audit, physical stock and inventory audits, trademark and other registrations, and the certificates and reports that banks, buyers and regulators ask for.
Our clients range from a first proprietorship registering for GST to established companies running operations across several states. Much of our work is exactly this: reading what a department has published and telling a business, in plain terms, whether it changes anything for them.
We operate from five offices and serve clients across the rest of India remotely:
- Pune (HQ): RTC Silver, B4-708, Sai Satyam Park, Wagholi, Pune, Maharashtra 412207
- Mumbai: 104, Rajshila Building, 597 J.S.S. Road, Marine Lines, Mumbai 400002
- Delhi: 3rd Floor, B-6/154-155, Sector 5, Rohini, Delhi 110085
- Gurugram: Pioneer Urban Square, B109, Golf Course Ext Road, Sector 62, Gurugram 122098
- Ahmedabad: Phoenix Tower, 1107, near Commerce Six Road, Drive In Road, Navrangpura, Ahmedabad, Gujarat 380009
If anything on this page affects you and you would like somebody to look at your own position, we are glad to help. Call +91 94594 56700, write to sales@patronaccounting.com, or visit patronaccounting.com. The first conversation costs nothing.