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Now, let’s delve into the recent GST AAR ruling: “ITC Allowed on CCV Tower Used in Cable Manufacturing Process”. On May 8, 2026, the Gujarat Authority for Advance Ruling (GAAR) held that the Input Tax Credit (ITC) is available on the construction of specialized CCV Towers used in cable manufacturing. These structures are treated as “plant and machinery” under the GST law.
In the case of M/s Apar Industries Ltd., the Authority ruled that the restriction under Section 17(5)(d) of the CGST Act would not apply where the structure itself forms an integral part of the manufacturing process. The company, which is engaged in the manufacture of insulated electrical cables, had constructed a Catenary Continuous Vulcanization (CCV) Tower through an EPC contractor for installation of its manufacturing line.
The applicant sought an advance ruling on whether GST paid on construction services and materials used for the tower would qualify for ITC or stand blocked as expenditure incurred towards immovable property under Section 17(5)(d) of the CGST Act.
The applicant argued that the CCV Tower was a highly specialized industrial structure designed exclusively for the vulcanization process involved in cable manufacturing. The vertical arrangement of the production line was technically necessary to ensure uniform insulation curing and to prevent sagging or deformation of cables during the manufacturing process. According to the applicant, the tower functioned as a structural support and operational component of the plant itself.
However, the Revenue viewed the structure as an immovable civil construction and contended that ITC on such construction activity was restricted under the blocked credit provisions contained in Section 17(5)(d).
Before the Authority, Apar Industries relied on the “functional test” evolved through judicial precedents to contend that structures specifically engineered for manufacturing operations should be treated as part of the plant and machinery. The applicant emphasized that the tower was not a general-purpose building but an inseparable part of the production apparatus.
The Authority accepted the applicant’s contention and observed that the CCV Tower was constructed solely to support and house the specialized manufacturing line. It noted that the structure derived its existence and design entirely from the technical requirements of the production process.
