HSN Code 995423: Ruling on Construction Services for Solar Park Developer

The Authority for Advance Rulings in Madhya Pradesh determined the HSN code for construction services under multiple agreements with a solar park developer to be 995423, classifying the services as a composite supply falling under Works Contract as per the CGST Act. The applicable rate of CGST and SGST on the supply made under the contract was ruled to be 9% each, in accordance with relevant notifications.

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Issues:
1. Determination of HSN code for construction services under multiple agreements.
2. Applicable rate of CGST and SGST on the supply made under the contract.

Analysis:

Issue 1: Determination of HSN Code
The applicant, engaged in construction services for solar power projects, sought clarification on the appropriate HSN code for their work under three agreements with a solar park developer. The applicant contended that the work involved a composite supply of goods and services, falling under the category of a Works Contract as per the CGST Act. The Authority examined the agreements and confirmed that the services provided were a composite supply within the meaning of the CGST Act. The construction of Pooling Sub-stations on a Turnkey Basis qualified as a Works Contract under the Act. The Authority determined the HSN code for the services as 995423, pertaining to general construction services of long-distance underground/overland/submarine pipelines, communication and electric power lines, and related works.

Issue 2: Applicable Rate of CGST and SGST
Regarding the applicable rate of CGST and SGST on the supply made under the contract, the Authority referred to Notification No. 11/2017 - Central Tax (Rates) to ascertain the rates. The notification specified a rate of 9% for a composite supply of works contract as defined in the CGST Act. Therefore, the Authority ruled that the rate of CGST on the supply made under the contract would be 9%. Similarly, the rate of MPGST on the supply under the contract was also determined to be 9% in accordance with the corresponding notification under the MPGST Act, 2017.

In conclusion, the Authority for Advance Rulings, Madhya Pradesh, provided a detailed analysis and ruling on the determination of the HSN code for construction services and the applicable rates of CGST and SGST for the supply made under the contract with the solar park developer.

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