GST Input Tax Credit on Factory Expansion and Office Infrastructure: AAR Application Closed as Withdrawn

Background of the Advance Ruling Application

M/s. Armstrong International Private Limited (referred to as the Applicant) approached the Authority for Advance Ruling, Tamil Nadu, seeking clarity on the admissibility of input tax credit (ITC) under the Goods and Services Tax laws in relation to a large-scale expansion and infrastructure project.

The Applicant is engaged in the manufacture and sale of steam and condensate recovery systems. In view of its proposed capacity enhancement and infrastructure upgrade, the Applicant sought advance ruling on whether ITC would be available on various categories of capital goods, civil works, and allied installations connected with:

  • Expansion of the manufacturing unit
  • Alteration of existing factory structures
  • Construction of a new corporate office
  • Setting up of a customer learning and development centre

The online application for advance ruling was dated 30-05-2025, and in compliance with Rule 104 of the CGST Rules, 2017 and SGST Rules, 2017, the Applicant paid application fees of Rs. 5,000/- each under the Central and State enactments. As mandated by Rule 107A, the physically signed application was received by the Authority on 17-06-2025.

Subsequently, before the matter could be decided on merits, the Applicant requested withdrawal of the application, which the Authority accepted. The application was therefore disposed of as withdrawn, without any ruling on the substantive GST ITC questions raised.

Proposed Expansion and Infrastructure Project – Key Components

The Applicant had outlined a comprehensive project involving both manufacturing expansion and corporate infrastructure development. The proposal covered multiple components, summarised below:

1. Setting up of a New Factory with Additional Product Lines

The Applicant planned to establish a new manufacturing facility to diversify and scale up its production portfolio. The new factory was intended to accommodate production of:

  • Heat pumps
  • Fabricated strainers
  • Functional test rigs
  • Bellow sealed valves

This new facility was to be supported by appropriate mechanical and electrical infrastructure to ensure seamless production operations.

2. Construction of a New Corporate Office

Alongside the manufacturing expansion, the Applicant proposed a new corporate office building equipped with:

  • Utilities (power, water, network and other support systems)
  • Office infrastructure and consumables
  • Capital goods such as:
    • Furniture and fixtures
    • Computer equipment
    • Air conditioners
    • Other office-related machines and devices

The corporate office was envisaged as the administrative and managerial hub of the business, closely integrated with the manufacturing facilities.

3. Establishment of a Customer Learning and Development Centre

A significant feature of the project was a customer learning and development centre intended to support both physical and digital engagement with customers. The centre was planned to:

  • Showcase demonstrations of the Applicant’s manufactured products
  • Serve as a platform for training and knowledge sharing
  • Include testing laboratories for carrying out performance and quality checks on products before their sale as finished goods

This facility was positioned as a key customer-facing and product validation hub.

4.