QUESTION

We are manufacturing unit , we have installed solar panel , we are using power generated form solar panel for our own business of manifesting . Can we take input tax credit of solar panel .

ANSWER

Facts of the case:
Eligibility of ITC on solar panel installed for business of manufacturing.

Law Applicable:
Section 16 of CGST Act

(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

Interpretation: ITC in GST is restricted under section 17(5) which no where restricts ITC on Solar panel. Thus ITC on solar panel is eligible subject to the conditions of section 16.

Conclusion: You are eligible for ITC on solar panel subject to the conditions of section 16.