EPC contract for solar power plant

[K Balasubramanian]

There is an option available to pay taxes on 70% of Gross Consideration for materials and 30% of gross consideration on Services @ 18%. Is this facility optional or mandatory?? Notification number 08/2021 Central taxes (Rate) dated 30/09/2021 refers

AI Summary

Debate on GST Application for Solar EPC Contracts: Is 70/30 Tax Split Mandatory or Optional Under CGST Act, 2017? A discussion on the application of Goods and Services Tax (GST) to an EPC contract for a solar power plant raised questions about whether the option to pay taxes on 70% of the gross consideration for materials and 30% for services at 18% is mandatory or optional. One participant clarified that if specific conditions are met, this deemed value approach is mandatory. Another noted that this explanation does not override other sections of the CGST Act, 2017. Additionally, it was mentioned that this method of deemed valuation and tax rate is currently under legal challenge in a high court.