Here is an interesting case on allow ability of ITC on steel , cement etc used for foundation and structure.

The case details is as under:

Coral Manufacturing Works India (P.) Ltd., In re

[2022] 139 taxmann.com 217 (AAR – TAMILNADU)

Let us have a short overview:

The isss was regarding Input tax credit on Foundation of factory vis a vis – Steel, cement, structures, beams and poles and works contract service are received for construction of integrated factory building with pillars and gantry beams along with rails for movement of overhead cranes.

 – Supply received by applicant results in construction of civil structure which is in form of factory

 – Foundation and walls being part of factory, are in category of civil structure – Entire construction of integrated factory premises with strengthening of walls, increase in volume/ size of plinth beam, etc. are only part of civil structures of factory housing plants and machineries and are not foundation with which such plants and machineries are fixed to earth

 – Additional foundation and beams are to be considered as any other civil structure, excluded from explanation of plant and machinery

The AAR observed as under:

– ITC will not be available

– Further, applicant has not established that they individually procure steel, cement and other consumables for works executed by their suppliers

 – Invoices for such goods are not in name of applicant

– Input tax credit is not available on steel, cement and other consumables even in proportion to incremental volume of earth foundation, sidewalls, beams, etc.

AAR considered relevant Section 17(5)(d) of Central Goods and Services Tax Act, 2017 & Tamil Nadu Goods and Services Tax Act, 2017.

Conclusion: 

Input tax credit of GST paid on steel, cement and other consumables used for reinforcing foundation and structures cannot be availed as this type of additional foundation acts as civil structure of factory for housing plants and machineries and not as foundation with which such plants and machineries are fixed to earth.