TaxTMI 
TaxTMI 
Solar Power Plant Invoicing Issue
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....olar Power Plant Invoicing Issue <br> Query (Issue) Started By: - DS Pal Dated:- 19-12-2025 Goods and Services Tax - GST <br> Got 7 Replies <br> GST<br> <br> 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% & 1....
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....8%) 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" need....
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....s to change anything in such transaction with Company "Y"? Thanks --Reply By: Sadanand Bulbule The Reply: In my considered opinion, this is not a good tax planning and unacceptable by the department. In terms of Entry No. 201A of Notification No. 8/2021-Central Tax (Rate) dated 30/09/2021, the benefit of 70:30 is for Solar Power Generator as one unit only. To avail this benefit....
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...., you must invoice for " Solar Power Generating System". So other queries do not deserve any answer. --Reply By: Ryan Vaz The Reply: Applicable Law / Notifications / Circulars * Section 2(30), CGST Act, 2017 - Definition of Composite Supply * Section 8, CGST Act, 2017 - Tax liability on composite supply * Notification No. 01/2017-Central Tax (Rate), Schedules I & III - GST rates * Noti....
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....fication No. 24/2018-Central Tax (Rate) dated 31.12.2018 - Deemed valuation 70:30 for SPGS (Goods @ 5%, Services @ 18%) * CBIC FAQs & Circulars on Solar EPC (clarifying composite supply treatment) Short Practical Answer * Yes, Company Y can invoice Company Z item-wise/HSN-wise, but it cannot apply the concessional 70:30 rate if it chooses to split supplies. * Once item-wise invoicing is done....
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...., each item/service is taxed at its own applicable GST rate (panels 5%, structures 18%, services 18%, etc.). * If Y wants to pass on the concessional rate, it must invoice Z as a single composite supply (SPGS), not item-wise. --- Sub-Reply By: DS Pal The Sub-Reply: Dear sir, Thank you for your valuable reply. But how Y will record the Purchase and sale as Purchase consists SPG system but invo....
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....icing to be done individually at the time of sale. --Reply By: Shilpi Jain The Reply: If its a composite contract between Y and Z is a composite one they will have to follow the 70:30 principle. --- Sub-Reply By: KALLESHAMURTHY MURTHY K.N. The Sub-Reply: Sir, It depends on the nature of supplies involved in the transaction. If the transaction is a composite supply, then the rate....
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.... of tax applicable under composite supply as defined in Sec. 8 of the CGST Act. If the description in the invoice is made based on item-wise and HSN-wise, the rate of tax is applicable as prescribed on individual items. It can not be charged at the ratio of 70:30, applying a different rate of tax, which is not admissible under the GST Law. --Reply By: Shilpi Jain The Reply: There should n....
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....ot be any issue in purchase as SPGS and sale individually. If its merely requirement of customer to invoice individually without affecting the actual tax liability payable then shoudl not be an issue. Also are you not installing the SPGS at customer locaiton? --Reply By: Shilpi Jain The Reply: If Z is only procuring the components and not for installation of SPGS, this may require re-examini....
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