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2018 (5) TMI 963 - AAR - GSTWorks Contract - Separate taxability for goods and services - rate of tax - Concessional rate of duty - classification of future contract - Whether in case of separate contracts for supply of goods and services for a solar power plant, there would be separate taxability of goods as 'solar power generating system' at 5% and services at 18%? - Held that: - "works contracts" u/s 2(119) being deemed to be a supply of services, the impugned agreements represent transactions of the nature of a supply of "service" - The agreements tendered in support of this question reveal that the impugned transaction of setting up and operation of a solar photovoltaic plant is in the nature of a "works contract" in terms of clause (119) of section 2 of the GST Act. Schedule II [Activities to be treated as supply of goods or supply of services] treats "works contracts" u/s 2(119) as supply of 'services' - depending upon the nature of supply, intra-State or inter-State, the rate of tax would be governed by the entry no.3(ii) of the Notification No.8/2017-Integrated Tax (Rate) under the Integrated Goods and Services Tax Act, 2017 (IGST Act) or the Notification no. 11/2017 - Central Tax / State Tax (Rate) under the CGST Act and MGST Acts. The rate of tax would be 18% under the IGST Act and 9% each under the CGST Act and the MGST Act, aggregating to 18% of CGST and MGST. Whether parts supplied on standalone basis (when supplied without PV modules)would also be eligible to concessional rate of 5% as parts of solar power generation system? - applicant argues that since the concessional rate of 5% [as clarified to be under Notification no. 1/2017-Integrated Tax (Rate)] is provided to renewable energy products and parts thereof, the same should be applicable to all suppliers providing such products - Held that: - sr. no.234 of Schedule I of Notification No.1/2017 - Integrated Tax (Rate) under the Integrated Goods and Services Tax Act, 2017 (IGST Act) which states is under the notification prescribing the tax rate on 'goods' - We have to observe that the facts of the transactions have to be seen in terms of what the sub-contracting agreement says, what has been supplied, whether the item supplied is a part. Such and many other questions have to be answered. No details have been brought before us. If the transaction is a supply of "goods" then the applicable Schedules (exempt or taxable) would have to be seen - In the absence of any documents before us, we would not be able to deal with this question in the present proceedings. Whether benefit of concessional rate of 5% of solar power generation system and parts thereof would also be available to sub-contractors? - Held that: - If the transaction is a supply of "goods" then the applicable Schedules (exempt or taxable) would have to be seen. No details have been brought before us. Further, the question would have to be posed by the supplier who would be the sub-contractor - In the absence of any documents before us, we would not be able to deal with this question in the present proceedings. Ruling: - Depending upon the nature of supply, intra-State or inter-State, the rate of tax would be governed by the entry no.3(ii) of the Notification No.8/2017-lntegrated Tax (Rate) under the Integrated Goods and Services Tax Act, 2017 (IGST Act) or the Notification no.11/2017 -Central Tax/State Tax (Rate) under the CGST Act and MGST Acts. The rate of tax would be 18% under the IGST Act and 9% each under the CGST Act and the MGST Act, aggregating to 18% of CGST and MGST.
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