TaxTMI 
TaxTMI 
2025 (5) TMI 1600
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.... 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression "GST Act" would mean the CGST Act and the WBGST Act both. 1.2 The applicant is stated to be engaged in the business of erection, commissioning and installation projects in the renewable energy sector. The said scope of work would include EPC contracts for rooftop solar power plant including supply of multiple components within the said power plant. This would include monocrystalline panel, inverter with remote monitoring, fixing structure and relevant accessories. The applicant is working for multiple corporates, Government, Government entities, Indian Railways etc. 1.3 The applicant has made this application....
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....r 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." As per the above, the value of goods would be deemed to be 70% of the gross consideration charged i.e. Rs 1.08 crores and that of services would be the remaining 30% i.e. Rs. 0.46 crores. 2.5 As regards the rate of taxes, the same has been provided separately for both goods and services in Entry no. 201A of amended Notification no. 1/2017-Central tax (rate) dated 28th June 2017 and Notification no. 11/2017-Central tax (rate) dated 28th June 2017 respectively as follows: Entry no. 201A of amended Notification No. 01/2017-Central tax (rate) dated 28th June 2017 SI.No. Chapter Description Rate of tax 201A 84,85 or 94 Following renewable energy devices and parts for their manufacture: a) Bio-gas plant b) Solar Power based devices c) Solar Power generator d) Windmills, Wind Operated Electricity Generator (WOEG) e) Waste to energy plants/devices. f) Solar Lanter....
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....rther the rate of tax would be as per the respective rate notification of goods and services. 3. Submission of the Revenue The concerned officer of Rishra Division, Howrah Commissionerate has submitted as follows: 3.1 The applicant is engaged in the business of erection, commissioning and installation projects in the renewable energy sector. The scope of work includes EPC contracts for rooftop solar power plant including supply of multiple components within the said power plant, which would include mono-crystalline panel, inverter with remote monitoring, fixing structure and relevant accessories. In response to the tender no. RT-RNY-EL-T-29-2023-24 invited by RANGIYA DIVISION-ELECTRICAL/N F RLY, the applicant entered into an agreement, accepted vide letter no. RANGIYA DIVISION-ELECTRICAL/RT-RNY-EL-T-29-2023-24/10783460105435 dated 14.06.2024 by Sr. DEE/TRD/RNY. As per the agreement/contract, the applicant was supposed to undertake works related to supply, design, installation, testing and commissioning of grid connected rooftop solar power plant consisting Mono-crystalline Panel, Inverter with remote monitoring system, fixing structure and all other accessories including L....
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....te on renewable energy devices & parts for their manufacturer was 5%, which was subsequently enhanced to 12% vide entry no. '201A' under 'Schedule II' of Notification No. 8/2021 Central Tax (Rate) dated 30.09.2021, which enumerates that: 201A 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 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 su....
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....on with each other in the given industry. Therefore, they would be considered to be a composite supply. In support of the interpretation of the applicant one order dated 15.05.2019 passed by the Appellate Authority for Advance Ruling, Rajasthan in respect of Shri Kailash Chandra has been placed before us. The said authority has classified the activities of supply, design, installation, commissioning and testing of solar energy based water pumping systems as composite supply involving supply of services and goods. The subject matter of the above appellate order is not strictly related to the facts and circumstances of the application on which ruling is sought from this authority. 4.5 Before going into the details of the discussion, we should discuss some concepts of the GST Act and the components and the process of installation of grid connected rooftop solar power plant which will act as reference in the later part of the discussion. Composite Supply: Section 2 (30) of the GST Act defines Composite Supply as 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 nat....
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...., inverter, and other components, ensuring easy electricity transmission. Net meter (bidirectional meter): The net meter withdraws (imports) the exported units from the grid at night. It keeps all the appliances running. This power exchange is known as net metering. Grid: Grid is the quintessential part of a grid-connected PV system. It is more of a sort of battery since that is where excess power is sent and then taken back when needed. So, it is basically a sort of power backup system for the plant. Thus a Solar Power Plant can be described as a complex and integrated system which converts sunlight into direct current electricity using the photoelectric effect. Inverters change the direct current into alternating current for connection to the electrical grid. In a rooftop solar power plant, the solar panels are installed on the roof of a building with the following installation process. 4.7 The step-by-step installation process of grid connected rooftop solar power plant can be summarized as under: Preparing the roof: Before any setup, it is critical to thoroughly clean the roof surface of the roof, removing any debris, dust, or obstructions that ....
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.... be connected to the grid. A standard plug can be used to connect to the main power switchboard. The electric board that delivers electricity is linked to an output wire. The following diagram represents the interconnection and integration of the different components of a solar power plant. 4.8 It is in the above background that we have to determine the nature of supply in respect of supply, design, installation, testing and commissioning of Grid connected rooftop solar power plant of the capacity of 280 and 210 KW respectively at Rangiya station consisting of Monocrystalline Panel, Inverter with remote monitoring system, fixing structure and all other accessories including LA and proper earthing. 4.9 At the very outset we should keep in mind that the issue raised in the instant application for advance ruling has already been placed before different Authorities for Advance Ruling in different parts of the country. Even the matter has been referred to the Hon'ble High Court of Andhra Pradesh as well. The rulings given by authorities differ so far as the nature of supply in the present case is concerned. The Karnataka Authority for Advance Ruling in the case of Sola....
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.... High Court has observed that in the present case, the solar power plant is not trees or shrubs, which are rooted in earth or a structure embedded in the earth. The appellate authority also accepts that the solar power module is attached to the civil foundation, which is embedded in the earth. The property, which is attached to a structure embedded in the earth, would also become immoveable property only when such attachment is for the permanent beneficial enjoyment of the structure, which is embedded in the earth. In this case, the civil foundation is embedded in the earth. However, the solar modules and the Solar Power Generating System have not been attached to the civil structure for the purpose of better enjoyment or beneficial enjoyment of the civil foundation. On the contrary, the civil foundation has been embedded on earth for better permanent and beneficial enjoyment of the Solar Power Generating Station. Applying the aforesaid test, it must be held that the property in question, viz., the Solar Power Generating System would not answer the description of immoveable property. The transaction in question would not fall within the meaning of "works contract as defined u....
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....e. The other taxable supply is supply of service in the form of installation and setting up of the whole solar power plant. The two supplies are provided in conjunction with each other as per the work order placed before us. 4.15 From a conjoint reading of Sec. 2 (30), 2 (119) and Entry no. 6 of Schedule II of the GST Act it is evident that works contract as defined under Sec. 2 (119) is a composite supply where the supply is to be treated as supply of services. So there can be two types of composite supply. One type is composite supply of the nature of works contract. The other type is composite supply other than works contract where the nature of supply (whether supply of goods or services) is to be determined in terms of principal supply. Now we must bear in mind that the activities which come under the ambit of works contract as defined under Sec. 2 (119) must be in relation to any immovable property. Since the term immovable property is not defined in the GST Act, we have to refer to the General Clauses Act, 1897 as well as the Transfer of Property Act, 1882 and different judicial pronouncements defining immovable property. Under Section 3(26) of the General Clauses A....
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....he Grid connected Rooftop Solar Power Plant that is under consideration of this advance ruling is a complex system of many components integrated with one another. The supply, design, installation, testing and commissioning of Grid connected rooftop solar plants of the capacity of 280 and 210 KW involves enormous amount of survey, testing, designing, earthwork and installation of wires and cables, junction boxes, main board and sub-distribution board, controlling switches, socket outlets, D.P. main switches, single phase KWH meters, insulators. The work also involves erection of poles on concrete foundation in the ratio of 1:3:6 representing cement, sand and coarse aggregate respectively. The preceding discussion clearly points out that the element of being permanently fastened to anything attached to the earth is very much present in case of rooftop solar power plant. Civil structures are created for installation of different equipments of the plant and those structures become inseparable part of the whole power plant. At the completion of the work it is the entire rooftop solar power plant with all the civil works done is transferred to the recipient. Some individual equipments....
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.... 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. 6% 01.10.2021-[Notification No. 1235-F.T. Dated - 21.10.2021 and 08/2021-Central Tax (Rate) Dated - 30.09.2021] Notification No. 11/2017-Central Tax (Rate) dt. 28.06.2017 Sl.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition 738. 9954 or 9983 or 9987 Service by way of construction or engineering or installation or other technical services, provided in relation of setting up of following, - (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) Ocean waves/tidal waves energy devices/plants Explanation:- This entry shall be read in conjunction with serial number 16234 of Schedule I 16201A of Schedule II of the notification No. 1/2017-Integrated Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Sect....
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.... as amended. The two entries are interlinked in such a way that they cannot be read and interpreted separately. 4.19 Two things that emerge from the above discussion are as under: Firstly, the value of supply in respect of the goods and services referred to in Entry No. 201A of Notification No. 11/2017-Central Tax (Rate) Dt. 28.06.2017 as amended and Entry no. 38 of Notification No. 01/2017-Central Tax (Rate) Dt. 28.06.2017 as amended is the Gross consideration charged by the supplier for the entire supply. Secondly, the conjoint reading of Entry no. 38 of Notification No. 01/2017-Central Tax (Rate) Dt. 28.06.2017 as amended and Entry No. 201A of Notification No. 11/2017-Central Tax (Rate) Dt. 28.06.2017 as amended hints at bifurcation of the values of the total supply into 70 and 30 per cent. for supply of goods and supply of services respectively. The 70 per cent. portion of the supply will attract tax rate of the goods supplied i.e. solar power generator (in the present case) and the rest 30 per cent will attract the tax rate of the service under serial no. 38. In view of the foregoing discussion, we rule as under: RULING Q1. Whether the supply of components of....