Solar Power Plant Invoicing Issue

[DS Pal]

Dear Experts,

One of my client Company "X" receives an order from Company "Y" for EPC of Solar Power Plant. Company "Y" also receives such order from Company "Z".

Now, Company "X" is invoicing to "Y" at the rate of 8.90% (70:30 on 5% & 18%) for Solar power generating system. Till then there is no issue in the transaction.

But contract between Company Z and Company Y says that "Y " will invoice to "Z" individually Item wise / HSN wise.

Now the query is can Company "Y" do this?

If yes, how the inventory be record in the books of Company "Y"?

If No, what will be the possible solution to this transaction?

Should Company "X" needs to change anything in such transaction with Company "Y"?

Thanks

AI Summary

Solar Power Plant invoicing: Y can invoice item-wise but cannot apply 70:30 concessional rate for split supplies.
The concessional 70:30 valuation applies only where the transaction is invoiced and treated as a single composite supply of a Solar Power Generating System (SPGS). If Company Y invoices Z item-wise/HSN-wise, each item or service is taxed at its applicable GST rate and the 70:30 allocation cannot be applied; to pass the concessional rate to Z, Y must invoice Z as a single composite SPGS. Where Z procures only components or the supply is not composite, tax characterisation must be re-examined.