TaxTMI 
TaxTMI 
A Foundation Does Not Make a Wind Turbine Immovable
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.... Foundation Does Not Make a Wind Turbine Immovable<br>By: - Raj Jaggi<br>Goods and Services Tax - GST<br>Dated:- 20-8-2026<br>A Short Supreme Court Order With a Clear Classification Message The Supreme Court order in The Assistant Commissioner St & Ors. Versus M/s. Siemens Gamesa Renewable Power Private Limited - 2026 (8) TMI 847 - SC Order, is brief, but its effect is significant. The Department's Special Leave Petitions against the Andhra Pradesh High Court judgment in M/s. Siemens Gamesa Renewable Power Private Limited Versus The Assistant Commissioner ST, Kavali Circle, Nellore, The Joint Commissioner, (State Tax) And Appellate Authority, Tirupathi., The State Of Andhra Pradesh, The Union of India New Delhi. - 2025 (12) TMI 1888 - ANDHRA PRADESH HIGH COURT, have been dismissed. The High Court's reasoning has therefore remained undisturbed. The controversy concerned Wind Turbine Generators supplied, assembled, erected and commissioned by the assessee. The assessee treated the transaction as a composite supply of goods and services and paid GST at 5%. The Department took the view that once a Wind Turbine Generator was erected on a foundation embe....
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....dded in the earth, it became immovable property. On that basis, the Department treated the transaction as a works contract liable to GST at 18%. The real issue was not merely about the size or weight of a wind turbine. It was whether a Wind Turbine Generator, assembled on site and fixed to a foundation for stability and functioning, loses its character as movable goods and becomes immovable property. The High Court answered this question in the assessee's favour. The Supreme Court has refused to interfere. Attachment to Earth Is Not the End of the Inquiry A large machine may be fixed to earth for many reasons. It may be fixed for safety, stability, or to avoid vibration. It may be fixed to function efficiently. But every attachment to earth does not automatically convert the machine into immovable property. This is the core principle behind the judgment. In the present case, the Wind Turbine Generator consisted of several components, including the nacelle, rotor, blades, tower sections, control system, cables and accessories. These components were brought to the site and assembled there. A foundation was constructed at the site, and the turbine was fixed to that fou....
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....ndation. The Department emphasised that the turbine could not function unless it was properly erected and anchored. The High Court, however, examined the matter more carefully. The foundation was immovable, but the turbine itself could be dismantled, removed, transported and re-erected elsewhere. The turbine was fixed to the foundation not for the beneficial enjoyment of the foundation or land, but for the proper functioning of the turbine itself. Therefore, the attachment was functional. It was not conclusive of immovability. Movability Depends on Function, Intention and Marketability The High Court applied the tests laid down by the Supreme Court in M/s BHARTI AIRTEL LTD. Versus THE COMMISSIONER OF CENTRAL EXCISE, PUNE - 2024 (11) TMI 1042 - Supreme Court. In that case, mobile towers and prefabricated buildings brought in knocked-down or semi-knocked-down condition and erected on site were examined from the standpoint of movability. The Supreme Court held that mere attachment to the earth does not make an article immovable if it can be dismantled and relocated without losing its identity. The principle is practical. The law does not ask only whether somethin....
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....g is bolted, fixed or anchored. It asks why it is fixed, how it is fixed, whether the attachment is permanent, whether the article can be removed without substantial damage, whether it retains identity after removal, and whether it can be sold or used elsewhere. These are the tests of the nature of annexation, object of annexation, intention, functionality, permanency and marketability. These tests directly supported the assessee. The Wind Turbine Generator was erected on a foundation so that it could stand vertically, withstand wind pressure and generate electricity. The foundation supported the turbine. It did not convert the turbine into land. The turbine retained its identity and could be dismantled and relocated. Therefore, it remained movable goods. The Foundation and the Equipment Cannot Be Confused The Department's argument treated the foundation and the Wind Turbine Generator as a single, inseparable immovable unit. This approach was rejected. A foundation may be embedded in the earth and remain immovable, but equipment attached to that foundation does not automatically become immovable merely because it requires a strong base. This distinction is important....
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.... in modern industrial projects. Many machines require foundations. Heavy machinery, towers, plants, generators, refinery equipment and renewable energy equipment often require anchoring. If every such machine were treated as immovable property merely because it needs a foundation, the legal distinction between machinery and civil structure would be blurred. In the present case, the foundation remained at the site. If the turbine was de-erected and shifted, a new foundation would be required at the new location. But that did not destroy the turbine's movable character. The foundation was site-specific. The turbine was capable of relocation. This distinction helped the High Court hold that the Wind Turbine Generator remained movable property amounting to goods. Works Contract Requires Immovable Property The statutory consequence of this finding is significant. Under Section 2(119) of the CGST Act, 2017, a works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property, where the transfer of property in....
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.... goods is involved in the execution of such contract. Therefore, immovable property is not incidental to the definition. It is central to it. If the contract does not relate to immovable property, it cannot be classified as a works contract under GST. This is a major difference between the pre-GST and GST treatment of works contracts. Under the earlier indirect tax regime, the concept of works contracts had a wider operational history. Under GST, the statutory definition is expressly confined to immovable property. Once the High Court concluded that the Wind Turbine Generator was movable property, the Department's works contract theory could not survive. The contract involved the supply of goods and associated services, but not the execution of a works contract in relation to immovable property. Therefore, the Department's classification at 18% failed at the threshold itself. Composite Supply Was the Correct Lens The assessee treated the transaction as a composite supply. Section 2(30) of the CGST Act defines composite supply as a supply consisting of two or more taxable supplies of goods or services, or both, which are naturally bundled and supplied together in....
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.... the ordinary course of business, one of which is a principal supply. Section 2(90) defines principal supply as the supply of goods or services which constitutes the predominant element of a composite supply and to which the other supplies are ancillary. Section 8(a) then provides that the tax liability on a composite supply shall be determined as if the supply were that of the principal supply. In simple words, where goods and related services are naturally bundled, the tax treatment follows the main supply. Therefore, if the main supply is the Wind Turbine Generator as goods, the connected erection, installation and commissioning services do not automatically convert the transaction into a works contract. In the present case, the supply involved goods as well as services. The components of the Wind Turbine Generator were supplied and then assembled, erected and commissioned. Since the turbine remained movable goods, the transaction could be treated as a composite supply of goods and services. It could not be reclassified as a works contract merely because installation at site was necessary. Solid and Correct Engineering Supplied the Core Principle The High Court relie....
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....d on Commissioner of Central Excise, Ahmedabad Versus Solid & Correct Engineering Works & Ors. - 2010 (4) TMI 15 - Supreme Court. That judgment is important because it prevents a mechanical approach to immovable property. The Supreme Court explained that machinery fixed to the earth for operational efficiency does not necessarily become immovable property. The real test is whether the attachment is intended to be permanent and whether the machinery can be dismantled and moved. The underlying principle is that attachment for operational efficiency is different from attachment as a permanent accession to land. If machinery is fixed only to make it stable, vibration-free or functional, the attachment is incidental to the use of the machinery. In such a case, the machine does not become part of the land merely because it is fixed to the earth during operation. This principle is particularly useful for GST classification. A machine may require support, anchoring or a foundation. But if the machine can be detached and moved without losing its character, it retains its movability. The foundation may be immovable, but the machine need not become immovable merely because it is at....
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....tached to that foundation. Applying this reasoning, the High Court held that the Wind Turbine Generator remained movable goods. Permanency Cannot Be Assumed From Erection Alone The Department relied on TTG. INDUSTRIES LTD. Versus COLLECTOR OF CENTRAL EXCISE, RAIPUR - 2004 (5) TMI 77 - Supreme Court. In that case, machinery assembled and erected at the site with an intention to remain there on a more or less permanent basis was treated as immovable property. The Department argued that the same principle applied to Wind Turbine Generators. The High Court did not reject T.T.G. Industries as a legal authority. It distinguished it on the facts. This distinction is important. A case-law principle cannot be lifted from one factual setting and applied to another without examining the nature of the article, the manner of attachment, and the possibility of removal. T.T.G. Industries dealt with machinery whose factual features indicated permanence. Siemens Gamesa involved turbine components that could be dismantled and relocated. The Supreme Court itself, in Commissioner of Central Excise, Ahmedabad Versus Solid & Correct Engineering Works & Ors. - 2010 (4) TMI 15 -....
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.... Supreme Court and M/s BHARTI AIRTEL LTD. Versus THE COMMISSIONER OF CENTRAL EXCISE, PUNE - 2024 (11) TMI 1042 - Supreme Court. had explained that T.T.G. Industries cannot be applied mechanically to every case of large equipment erected at the site. In the present case, the recorded facts showed that the turbine components could be dismantled and relocated. The foundation alone could not be moved. Therefore, T.T.G. Industries did not govern the present case. Movability Survives Where Identity Survives The above-mentioned judgment in M/s BHARTI AIRTEL LTD. Versus THE COMMISSIONER OF CENTRAL EXCISE, PUNE - 2024 (11) TMI 1042 - Supreme Court. became particularly relevant because it dealt with large structures assembled on site from components brought in knocked-down or semi-knocked-down condition. The Supreme Court recognised that such equipment may have to be dismantled before being shifted. But dismantling by itself does not destroy movability if the equipment can be reassembled and used again without losing its identity. This principle is directly relevant to Wind Turbine Generators. A turbine cannot be lifted and shifted as a single small article.....
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.... It has to be dismantled into components, transported and re-erected. But that is due to size, design and engineering requirements. This does not mean the turbine became immovable property. The High Court therefore applied a realistic test. The question was not whether relocation required effort, cranes, cost or technical work. The question was whether relocation was possible without destroying the turbine's identity. Since the answer was yes, the turbine retained its character as movable goods. Renewable Energy Equipment Must Still Be Tested for Movability The Andhra Pradesh High Court had earlier considered a similar issue in Sterling And Wilson Private Limited Versus The Joint Commissioner and Others - 2025 (1) TMI 663 - ANDHRA PRADESH HIGH COURT. That case concerned Solar Power Generator Plants. The High Court, relying on Solid and Correct Engineering, held that such plants could be treated as movable property, amounting to goods, where the relevant equipment retained movability and marketability. This earlier decision was relevant because renewable energy projects often involve equipment installed at the site along with civil work. Solar and wind proj....
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....ects may both require foundations, support structures, cabling, evacuation infrastructure and commissioning activity. However, these features do not automatically make the main generating equipment immovable property. The principle emerging from Sterling and Wilson and Siemens Gamesa is consistent. In renewable energy projects, the nature of the equipment must be examined carefully. Civil foundations and site preparation may be necessary, but the main equipment may still remain movable goods if it can be dismantled, relocated and sold without losing its identity. The Renewable Energy Context Does Not Change the Legal Test Wind Turbine Generators are large, technically complex, and site-dependent. They require careful planning, transportation, erection, and commissioning. They may have a design life of several years. They generate electricity only when properly erected and connected. These features may create an impression of permanence. However, legal classification cannot be decided by impression alone. The test remains whether the equipment is permanently attached to land or attached only for functional stability. A Wind Turbine Generator may operate at one location f....
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....or several years, but that does not make it immovable if it can be dismantled and shifted without losing its identity. This aspect is important for renewable energy projects generally. Solar plants, wind turbines, and other energy equipment often involve civil foundations and site work. But the GST classification must examine the equipment and the contract's real character. A project connected with land is not automatically a works contract involving immovable property. Assessment and Penalty Orders Could Not Survive Once the High Court held that the Wind Turbine Generator was movable goods, the foundation of the Department's assessment disappeared. The assessment orders and appellate orders treating the transaction as a works contract were set aside. The penalty orders and appellate penalty orders were also set aside. The matters were remanded to the assessing authority to complete the assessment proceedings in line with the High Court judgment. This means that the Department was not prevented from completing the assessment according to law, but it could not proceed on the incorrect premise that the Wind Turbine Generator was immovable property and that the con....
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....tract was a works contract. The Supreme Court's dismissal of the Special Leave Petitions gives the High Court's ruling practical stability. The order is short, but the consequence is clear: the Department's attempt to interfere with the High Court's classification approach has failed. Large Equipment Does Not Automatically Become Immovable The broader lesson of this judgment is that size, weight and foundation are not decisive by themselves. A machine may be massive. It may require cranes for erection. It may need a concrete foundation. It may remain at one location for a long time. Yet it may still be movable goods if it can be dismantled, relocated and sold without losing its identity. For senior officers and professionals, the correct sequence of analysis is clear. First, identify the equipment. Secondly, examine the manner and object of attachment. Thirdly, determine whether the attachment is for the beneficial enjoyment of land or for the functioning of the equipment. Fourthly, test whether the equipment can be dismantled and relocated. Fifthly, apply the GST definitions of works contract and composite supply accordingly. This disciplined approac....
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....h prevents over-classification of industrial and renewable energy equipment as immovable property. It also protects the statutory distinction between composite supply of goods and services on the one hand and works contract relating to immovable property on the other. Foundation May Hold the Turbine, but It Does Not Change Its Character A foundation may firmly anchor a Wind Turbine Generator to the earth, but it does not necessarily alter the turbine's legal character. The foundation provides stability. The turbine remains functional and marketable equipment. The judgment therefore reinforces a useful GST principle. Attachment to earth must be examined carefully. Where the attachment is only to make the equipment stable, safe and functional, and the equipment can be dismantled and relocated, it does not become immovable property merely because it is fixed to a foundation. The Supreme Court's order in The Assistant Commissioner St & Ors. Versus M/s. Siemens Gamesa Renewable Power Private Limited - 2026 (8) TMI 847 - SC Order, read with the Andhra Pradesh High Court judgment in M/s. Siemens Gamesa Renewable Power Private Limited Versus The Assistant....
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.... Commissioner ST, Kavali Circle, Nellore, The Joint Commissioner, (State Tax) And Appellate Authority, Tirupathi., The State Of Andhra Pradesh, The Union of India New Delhi. - 2025 (12) TMI 1888 - ANDHRA PRADESH HIGH COURT, provides important guidance on the classification of large industrial equipment. GST classification must follow legal character, not physical size alone. A Wind Turbine Generator remains goods when its foundation only supports its functioning =============<br> Scholarly articles for knowledge sharing by authors, experts, professionals ....