A recent tax ruling has said that plants and machinery are an exception to the rule and a tax credit should be available for their construction
The ruling, by the Telangana Authority of Advance Ruling (AAR), said that the input tax credit under Goods and Services Tax (GST) is not available for the construction of immovable property except if it happens to be for plant and machinery.
In most cases, companies outsource this work and unavailability of tax credit leads to cost escalation.