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2019 (10) TMI 948 - AAR - GSTClassification of supply - Composite supply or not - Whether the supply of turn-key Engineering, Procurement & Construction (EPC) Contract for construction of solar power plant wherein both goods and services are supplied can be construed to be a composite supply in terms of Section 2(30) of CGST Act, 2017? - taxable at 5% GST. HELD THAT:- In the pertinent case, it is clear that the applicant is making a supply which consists of supplies of goods and supplies of services which are naturally bundled and supplied in conjunction with each other in the ordinary course of business and one of which is a principal supply. Hence this is a composite supply. Taxability of EPC contract of “Solar Power Generating System” - HELD THAT:- The Solar Power Generating System is goods and if it is supplied as goods would attract the tax at the rate of 5% (2.5% CGST and 2.5% SGST) as per entry no. 234 of Schedule I of Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017. But in the pertinent case, what is supplied is not goods as such. It is a composite supply involving a creation of an immovable property which is part of the contract of setting up of a Solar Power Generating System and hence would be covered under Works Contract. This is distinguished in the above two entries and hence the work proposed to be done by the applicant is squarely covered under serial no. 38 of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 as amended by as amended by Notification No. 27/2018 -Central Tax (Rate) dated 31.12.2018 and attracts tax as per that entry and not under Serial No.234 of Schedule I of Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017. The contention of the applicant that the solar power plant is not an immovable property is not acceptable for the reason that all the components cannot be recovered on retrieval of the plant and without those elements the solar power plant cannot be stated to work properly. What can be retrieved without cannibalization is only the solar panels and certain other elements which are only part of the entire project and hence the contention of the applicant cannot be accepted.
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