The West Bengal Authority of Advance Ruling (AAR) has held that the supply of components of the solar power plant along with the erection of the same would be treated as a composite supply of the nature of works contract.

The bench of Dr. Tanisha Dutta and Jaydip Kumar Chakrabarti has observed that as per Entry no. 201 of Notification No. 01/ 2017, tax rate should be 12% IGST on seventy per cent. of the gross value charged by the supplier and 18% IGST on thirty per cent. of the gross value charged by the supplier.

The applicant is stated to be engaged in the business of erection, commissioning and installation projects in the renewable energy sector. The said scope of work would include EPC contracts for rooftop solar power plants including supply of multiple components within the said power plant. This would include a monocrystalline panel, inverter with remote monitoring, fixing structure and relevant accessories. The applicant is working for multiple corporations, Government, Government entities, Indian Railways etc.

The applicant has sought the advance ruling on the issue whether the supply of components of the solar power plant along with the erection of the same would be treated as a composite supply under GST.

The AAR has held that the value of supply in respect of the goods and services referred to in Entry No. 201A of Notification No. 11/2017 – Central Tax (Rate) Dt. 28.06.2017 as amended and Entry no. 38 of Notification No. 01/ 2017 – Central Tax (Rate) Dt. 28.06.2017 as amended is the Gross consideration charged by the supplier for the entire supply.

The AAR has held that the conjoint reading of Entry no. 38 of Notification No. 01/ 2017 – Central Tax (Rate) Dt. 28.06.2017 as amended and Entry No. 201A of Notification No. 11/2017 – Central Tax (Rate) Dt. 28.06.2017 as amended hints at bifurcation of the values of the total supply into 70 and 30 per cent. for supply of goods and supply of services respectively. The 70 per cent. a portion of the supply will attract tax rate of the goods supplied i.e. solar power generator and the rest 30 per cent will attract the tax rate of the service under serial no. 38.

Ruling Details

Applicant’s Name: SUNSHELL POWER

Ruling Date: 8th May, 2025

Read More: No GST Exemption On Leasing Out Of Constructed Property On Leased Land: AAR