GST On Solar Power sector Related Issues On

GST On Solar Power sector & Related Issues (On Input) CMA Vishwanath Bhat Cost Accountant Treasurer SIRC , I C A I 9448357102 Vbhat. co@gmail. com

2(30) Definitions of “composite supply” 2(30) “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply.

2(74) Definitions of “mixed supply” 2(74) “mixed supply” means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply; Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

2(119)Definitions of “works contract” • 2(119) “works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;

8: Tax liability on composite and mixed supplies 8. The tax liability on a composite or a mixed supply shall be determined in the following manner, namely: (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.

Whether solar project is composite supply, mixed supply, Or works contract ? . 1/2017 – serial no. 234 of Schedule-I of the Notification No. 01/2017 -Central Tax (Rate) dated June 28, 2017. But in the pertinent case, what is supplied is not goods as such. It is a composite supply involving a creation of an immovable property which is part of the contract of setting up of a Solar Power Generating System and hence would be covered under Works Contract.

Tax Rate • • Sl N o 234. - 5% 84 or 85 – CH Following renewable energy devices & parts for their manufacture (a) Bio-gas plant. (b) Solar power based devices. (c) Solar power generating system. (d) Wind mills, Wind Operated Electricity Generator (WOEG). (e) Waste to energy plants / devices. (f) Solar lantern / solar lamp (g) Ocean waves/tidal waves energy devices/plants • Solar Penal 5%. • Solar Module 18 %

Advance Rulings Applicant” State Decision M/s. Premier Uttarakhan ‘Solar Power Generating System’ is composite supply Solar (P) d not work contract-supply’ and the 70% of the gross Limited value shall be the value of supply of said goods Dated attracting 5% GST rate and the remaining portion (30%) 23/01/2019 of the aggregate value shall be the value of supply of taxable service attracting GST rate in terms of Notification No. 27/2018 -Central Tax (Rate) dated 31. 12. 2018. M/s Giriraj Renewables Private Limited 5/9/2018 (A) Mharastra- confirming that construction of solar power system is a Appeal works contract and GST Rate would be 18%. Order M/s Fermi Solar Farms Private Limited. Mharastra confirming that construction of solar power system is a works contract and GST Rate would be 18%.

Tax to Sub contractor The answer to the third question is that the benefit of concessional rate of 5% of solar power generation system and parts thereof would be available to sub-contractors if the sub-contract is only for supply Of goods. If the entire EPC contract is subcontracted then the rate of tax applicable shall be the same as that applicable to the contractor.

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