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GST Input Credit paid for Manufacturing of Gas Pipeline and CNG /LNG Stations

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Neeraj Khurana

MBA

21 Points Posted on 21 December 2022

We are paying huge amount of GST on Vendor bills for procurement of material for Installation of Gas Pipelines and other CNG/ LNG stations construction acitivity.

What is the law for getting Input Credit for this amount which we are paying to these Vendors?

Also how we can cross check that Vendors are depositing this money as GST

Replies (2)

Quick Summary

This discussion clarifies the rules around claiming GST input tax credit (ITC) for materials used in constructing gas pipelines and CNG/LNG stations. Generally, ITC is available for plant and machinery, including foundations and structural supports, even for pipelines laid within factory premises. However, there are restrictions on claiming ITC for pipelines laid outside the factory, though repairs and maintenance costs for these external pipelines are eligible.

sabyasachi mukherjee

Profession

19978 Points Posted on 22 December 2022

The law says you are eligible for credit

Sravan Yelagandula

Employee

73 Points Posted on 22 December 2022

On the combined reading of Sec 17(5)(c) , 17(5)(d) and explanation following can be concluded:

1. ITC (Input tax Credit) is available on plant and machinery (including the foundation and structural support cost) except on cost of pipeline laid outside the factory premises.

2. So if any pipeline is laid within the factory premises to connect different tanks or machinery then the same will be allowed as ITC.

3. There is restriction of ITC on the cost of pipeline laid outside the factory premises. However there is no restriction on ITC on repairs and maintenance cost incurred for maintaining this pipeline (i.e revenue expenditure)