GST RATE ON SOLAR PLANT INSTALLATION

[Satbir singh wahi]

UNIT IS ASSEMBLING SOLAR PLANT PARTS TO INSTALLATION OF ROOF TOP SOLAR PLANTS. PLS GUIDE GST RATE AND HSN

[SHARAD ANADA]

Subject to below on GST Rate 5% on Goods portion (I.e. deemed as 70% of Gross Consideration) and 18% on Service portion (I.e. deemed as 30% of Gross Consideration)

Notification No.1/2017-Central Tax (Rate) GST Rate 5% on Goods

ENTRY No. 234. [HSN 84, 85 or 94]
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
(h) Photo voltaic cells, whether or not assembled in modules or made up into panels]

Following Explanation Inserted vide Notification No. 24/2018-Central Tax (Rate) dated 31-12-2018 w.e.f. 01-01-2019

Explanation: If the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and services, one of which being a taxable service specified in the entry at S. No. 38 of the Table mentioned in the notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 [G.S.R. 690(E)], the value of supply of goods for the purposes of this entry shall be deemed as seventy per cent. of the gross consideration charged for all such supplies, and the remaining thirty per cent. of the gross consideration charged shall be deemed as value of the said taxable service.

[KASTURI SETHI]

Dear Querist,

Before arriving at any concrete decision, it is ultra-crucial to peruse the decision of AAAR, RAJASTHAN on this very issue. Reported as IN RE: RFE SOLAR PVT LTD [2018 (9) TMI 693 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN]

[SHARAD ANADA]

DATE OF AAAR RULLING OF IN RE: RFE SOLAR PVT LTD. [ 2018 (9) TMI 693 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN ]. HOWEVER GST Council Recommendations made during 31st Meeting of the GST Council held on 22nd December, 2018 (New Delhi)-Rate changes is on 22nd December, 2018. As per the recommendations

GST on solar power generating plant and other renewable energy plants GST rate of 5% rate has been prescribed on renewable energy devices & parts for their manufacture (bio gas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff]. Other goods or services used in these plants attract pplicable GST.

Certain disputes have arisen regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plant.

To resolve the dispute the Council has recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.

To Give effecet of councile decision Notification No. 24/2018-Central Tax (Rate) dated 31-12-2018 w.e.f. 01-01-2019 is issued by the Govt.

AI Summary

GST on solar plant installations: concessional goods value covers the bulk of contract price, remainder treated as taxable service.
For integrated supplies of specified renewable energy goods with services, Notification No. 24/2018-Central Tax (Rate) deems a major portion of the gross consideration as the value of the goods (which attract the concessional rate) and the remaining portion as the value of the taxable service, ensuring apportionment of contract value between goods and services for GST application.