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2019 (11) TMI 995 - AAR - GSTSeparate taxability of goods and services - separate contracts for supply of goods and services for a solar power plant - Composite supply or not - whether there would be separate taxability of goods as ‘Solar Power Generating System’ at 5% and services at 18%? - parts supplied on standalone basis (when supplied with PV modules) - concessional rate of duty - benefit of concessional rate of duty to sub-contractors also or not? 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:- The performance of the EPC contractor in relation to the supply of goods and supply of services related to the installation and commissioning of the goods are so intricately woven that they cannot be evaluated in isolation from each other. This indivisible nature of the total supply imparts the entire contract the nature of a works contract - The answer to the first question is that for the period up to 31.12.2018 the EPC contract is required to be considered as a works contract and has to be taxed accordingly. The artificial vivisection into two contracts, as envisaged, shall not rob the contract of its essential nature of a works contract. Whether parts supplied on standalone basis (when supplied with PV modules) would also be eligible to concessional rate of 5% as parts of solar power generation system?- HELD THAT:- Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 provides that items covered under Chapters 84 or 85 which constitute renewable energy devices and parts required for their manufacture are covered under the aforesaid entry no. 234 and are liable to be taxed at 5% - This essentially implies that those parts are liable to 5% tax only if they go into the manufacture of the Solar power generating system. Whether benefit of concessional rate of 5% of solar power generation system and parts thereof would also be available to sub-contractors? - HELD THAT:- Entry No. 234 in Schedule I to Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 does not differentiate between supplies by the contractor or the sub-contractor. It provides that as long as the goods falling under Chapter 84 or 85 are the listed renewable energy devices and parts for their manufacture the rate of tax applicable shall be 5%. It further means that the contract with the sub-contractor has to’ be for the supply of the solar power generating system.
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