ITC admissibility on inputs used for manufacture of capital goods

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ITC admissibility on inputs used for manufacture of capital goods
Query (Issue) Started By: - Satish Talnikar Dated:- 1-4-2022 Last Reply Date:- 3-4-2022 Goods and Services Tax - GST
Got 1 Reply
GST
Dear Sirs, Where inputs and inputs services are procured for manufacture of solar panels which are capitalized as assets in the books of accounts. Such solar panels are installed at the p .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... remises of client for supply of electricity to the client. As per the contractual agreement, the client is required to keep a security deposit with the solar panel manufacturer for 10 years. During this period, the solar panel manufacturer shall raise monthly bill for the number of units of electricity generated and supplied through the solar panel. Supply of electricity is exempted from payment o .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... f GST in terms of Notification 1/2017-CGST (Rate) dated 24.6.2017 (S.No. 104). After a period of 10 years, the solar panel system will be sold to the client and the security deposit amount shall be treated as sale value of the solar panel. Whether, the solar panel manufacturer is required to reverse the ITC on inputs and input services used for manufacture of solar panel which is used for supply o .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... f exempted goods? Whether such ITC can be utilized for payment of GST after 10 years when such solar panel is sold to the client. Whether for such sale, the written down value (WDV) of the solar panel shall be considered as the transaction value for payment of GST? Requesting for valued opinion. Thanks and regards! Reply By Shilpi Jain: The Reply: The terms of the agreement would be very relev .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ant in this case. If the agreement states it is a sale of solar equipment and the consideration for this is ascertained by way of the amount of electricity consumed, etc. then credit would be eligible. However, if the contract it self is for sale of electricity now and an optional sale to the recipient, then taking credit could be disputed.
Discussion Forum - Knowledge Sharing .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X