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GST

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Can we claim ITC(Input Tax Credit) for Solar Plant Setup on the roof of the Building

you can claim ITC (Input Tax Credit) for Solar Plant Setup on the roof of the Building, if it meets certain conditions.

The Solar Plant must be used for the transformation of energy and the energy must be supplied outwards. In simpler terms, you must use the energy for commercial purposes by supplying it outwards to the world. Then only you can claim ITC i.e. Input Tax Credit.

If it is not supplied outwards or used for personal consumption then you 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 you 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

  1. Land, building or any other civil structures
  2. Telecommunication towers; and
  3. Pipelines lay outside the factory premises

If the Solar Plant meets all these conditions, then you can claim ITC for the goods and services used in setting it up. You can claim ITC on the GST paid on the purchase of solar panels, batteries, inverters, and other equipment. You can also claim ITC on the GST paid for the installation and commissioning of the Solar Plant.

To claim ITC for Solar Plant Setup, you will need to file an ITC claim with the GST authorities. You will need to provide the following details in your ITC claim:

  1. The GST registration number of your business
  2. The invoice number and date for the goods and services used in setting up the Solar Plant
  3. The GST amount paid on the goods and services
  4. The date on which the Solar Plant was installed and commissioned

Once you have filed your ITC claim, the GST authorities will review it and process it. If your claim is approved, you will be able to claim the ITC amount in your next GST return.

Here are some additional tips for claiming ITC for Solar Plant Setup:

  1. Keep all the invoices and other documents related to the purchase and installation of the Solar Plant in a safe place. You will need these documents to support your ITC claim.
  2. Make sure that the Solar Plant is used for commercial purposes and the energy is supplied outwards. If the Solar Plant is used for personal consumption, you will not be able to claim ITC.
  3. Get the Solar Plant installed and commissioned by a GST registered vendor. This will ensure that the GST is paid on the goods and services used in setting up the Solar Plant.
  4. File your ITC claim on time. The GST authorities have a time limit of 3 months from the end of the month in which the ITC is incurred to process your claim.

By following these tips, you can ensure that you are able to claim ITC for Solar Plant Setup and save money on your GST liability.

Written by
Nikita Rai (CMA)
Team Edu-Visor