ITC Allowed on Cables Used for Feeder Bay to Factory | AAAR

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  • Last Updated on 14 November, 2025

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ITC on cables for feeder bay

Case Details: Assistant Commissioner, CGST Excise vs. Elixir Industries (P.) Ltd. - [2025] 180 taxmann.com 76 (AAAR-GUJARAT)

Judiciary and Counsel Details

  • Rajeev Topno & Sunil Kumar Mall, Member
  • Govind Bhagora, Superintendent for the Appellant.
  • Mukesh Soni, Adv. for the Respondent.

Facts of the Case

The petitioner filed an appeal against a manufacturer of hydro-entangled (spun lace) non-woven products, challenging the availment of input tax credit (ITC) on GST paid for wires, cables, and electrical equipment used to install a feeder bay and lay an underground cable to the factory. The respondent had capitalised the value of these materials and claimed ITC. It was contended that the works amounted to construction of immovable property and ITC was therefore barred under Section 17 of the CGST Act. The matter was accordingly placed before the Appellate Authority for Advance Ruling (AAAR).

AAAR Held

The AAAR held that the ITC claim was valid under Section 16, read with Section 17, of the CGST Act and the Gujarat GST Act, 2017. It was determined that the cables and electrical equipment constituted plant and machinery used for electricity transmission to the factory, and did not amount to the construction of immovable property. It was held that the respondent was entitled to claim ITC on GST paid for the wires, cables, and electrical equipment, as the materials were used for electricity transmission to the factory and did not constitute construction of immovable property. The departmental appeal was rejected, confirming that the handover of materials to the utility did not bar ITC, and upheld the eligibility of the respondent to avail input tax credit.

List of Cases Reviewed

List of Cases Referred to

  • Calcom Cement India Limited v. CCE [Order No. A/55724/2017-EX[DB], dated 24-7-2017] (para 10)
  • Prism Cement Ltd. v. C.C.E. & S.T. [Order No. A/52521/2017-EX(DB), dated 24-3-2017] (para 10)
  • Hindustan Coca Cola Beverages P. Ltd v. CCE [Order No. A/11297/2017, dated 24-7-2017] (para 10).

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied