No ITC claim for Goods and Services used in Electricity Generation Due to GST Exemption on Electricity Supply: AAR

An Authority for Advance Rulings (AAR) has clarified that Input Tax Credit (ITC) cannot be claimed for goods and services used in electricity generation due to the GST exemption on electricity supply. The ruling highlights that since the final product (electricity) is exempt from GST, the inputs used in its production do not qualify for ITC. This decision impacts businesses involved in power generation, as they cannot offset their input costs against GST liabilities, potentially increasing their operational expenses.