Facts of the Case:
In this case, the applicant “Polycab India Limited”, engaged in the manufacture and supply of Extra High Voltage (EHV), Medium Voltage (MV), Low Voltage (LV) power cables, optical fibre cables and allied products, proposed to establish a new manufacturing facility for production of EHV cables through the Vertical Continuous Vulcanization (VCV) process. The VCV process involved a sophisticated triple-layer co-extrusion system in which conductor shield, XLPE insulation and insulation shield were simultaneously applied to cable conductors in a controlled environment.
For installation and operation of the VCV manufacturing line, a specialized RCC concrete tower measuring approximately 163 meters in height, including 146 meters above ground and 17 meters below ground, was required to be constructed. The applicant contended that the concrete VCV tower was not an independent civil structure or building but merely a foundational and structural support indispensable for operation of the VCV manufacturing line. Accordingly, the applicant sought an advance ruling regarding eligibility of Input Tax Credit (ITC) on inputs and input services used in construction of the VCV tower under Sections 17(5)(c) and 17(5)(d) of the CGST Act, 2017.
Issue:
Whether ITC on inputs and input services used for construction of the RCC concrete VCV tower, meant exclusively for supporting and erecting the VCV manufacturing line for production of EHV cables, was admissible under the CGST Act. Whether such VCV tower constituted “foundation and structural support” of “plant and machinery” within the meaning of the Explanation to Section 17 of the CGST Act, thereby falling outside the restriction imposed under Sections 17(5)(c) and 17(5)(d), or whether it was to be treated as an immovable civil structure/building on which ITC was blocked.
Held That:
The Authority held that the VCV manufacturing line constituted “plant and machinery” as it was an integrated manufacturing apparatus used directly for making outward supply of EHV cables. It was observed that the RCC VCV tower was constructed exclusively for supporting and stabilizing the vertically aligned VCV machinery and was indispensable for maintaining operational precision, structural integrity and efficiency during the manufacturing process.
The Authority noted that the Explanation to Section 17 specifically includes “foundation and structural supports” within the ambit of plant and machinery. Therefore, once it was established that the VCV tower functioned as a structural and foundational support to the VCV manufacturing line, the restriction contained in Sections 17(5)(c) and 17(5)(d) ceased to apply.
The Authority further held that the VCV tower could not be regarded as an ordinary building or civil structure since it was not constructed for carrying on business activities generally, but was integrally connected with and essential for operation of the manufacturing machinery itself. Reliance was placed on KEI Industries Limited and CBIC Circular No. 219/13/2024-GST concerning ITC eligibility on ducts and manholes used in optical fibre cable networks. Consequently, the Authority ruled that the applicant was eligible to avail ITC on inputs and input services used for construction of the concrete VCV tower supporting the VCV lines used in manufacture of EHV cables.
Case Name: In Re: M/s. Polycab India Limited dated 08.05.2026
To read the complete judgement 2026 Taxo.online 1308
