There are certain things to be kept in mind when one wants to claim ITC for Solar Plant Setup on the roof of the building which are as follows
To begin with, the Solar Plant which is setup on the roof of the building, must be used for transformation of energy and,
In addition to that, energy has to be supplied outwards.
In simpler terms, one must use the energy for commercial purposes by supplying it outwards to the world. Then only one can claim ITC i.e. Input Tax Credit.
If it is not supplied outwards or used for personal consumption then one cannot claim ITC for that solar plant setup.
Furthermore, it must fall under the category of “Plant and machinery” and not under “Immovable property”, then only one can claim ITC for the Solar plant setup.
“Plant and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or structural support that are used for making outward supply of goods or services or both and includes such foundation and structural supports but excludes
- Land, building or any other civil structures;
- Telecommunication towers; and
- Pipelines lay outside the factory premises
Written by
Nikita Rai (CMA)
Team Edu-Visor