Case of Agratas Energy Storage Solutions Pvt Ltd, AAR Gujarat Ruling Dated 3rd November 2025. The applicant was granted leasehold rights by the Government of Gujarat for 50 years over an area measuring approximately 321 acres to carry out business activities including industrial construction. AAR held that “land has been given on lease specifically for construction of the factory… purpose of land for industrial purpose cannot be changed”. AAR ruled that Input Tax Credit (ITC) of GST paid on lease rental is not admissible to an assessee when the leased land is used for industrial construction. The ruling blocks ITC not only for the period during which factory construction takes place, but also for the periods before and after construction, as well as for repairs, maintenance and renovation activities and even with respect to the vacant portion of land that forms part of the leased industrial plot.