9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 835 - AAR - GSTClassification of supply - composite supply or not - works contract or not - supply of solar rooftop power plant along with design, erection, commissioning installation - supply of solar irrigation water pumping systems along with design, erection, commissioning installation - rate of GST - Held that - The definition of work contract is concerned with the immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved and thus question arises whether the said supply would be treated as immovable or not - we have gone through the pictures provided by the applicant and find that to erect the plant/system in question a concrete platform is required and with the help of nuts and bolts the supplies in question are erected on the said platform. In the present case we find that attachment of the plant/system in question with the help of nuts and bolts to a platform/foundation intended to provide stability to the working of the plant/system and prevent vibration/wobble free operation does not qualify for being described as attached to the earth under any one of the three clauses extracted above. That is because attachment of the plant to the foundation is not comparable or synonymous to trees and shrubs rooted in earth. The supplies in question cannot be termed as immovable property for the following reasons (i) The plants/ systems in question are not per se immovable property; (ii) Such plants/systems cannot be said to be attached to the earth within the meaning of that expression as defined in Section 3 of the Transfer of Property Act; (ii) The fixing of the plants/ systems to a platform/foundation is meant only to give stability to the plant/ system and keep its operation vibration free and (iv) The setting up of the plant/ system itself is not intended to be permanent at a given place. Thus the supplies under consideration are out of the ambit of work contract service in as much as the question of immovable property does not arise - the supply of goods along with design, erection, commissioning installation of the same while supply of solar rooftop power plant and solar irrigation water pumping systems shall be treated as composite supply and the 70% of the gross value shall be the value of supply of said goods attracting 5% GST rate and the remaining portion (30%) of the aggregate value shall be the value of supply of taxable service attracting GST rate in terms of Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018.
Issues Involved:
1. Whether the supply of solar rooftop power plant along with design, erection, commissioning, and installation is a 'composite supply' and the applicability of GST rate. 2. Whether the supply of solar irrigation water pumping systems along with design, erection, commissioning, and installation is a 'composite supply' and the applicability of GST rate. Issue-Wise Detailed Analysis: Issue 1: Composite Supply of Solar Rooftop Power Plant The applicant sought an advance ruling on whether the supply of solar rooftop power plant along with design, erection, commissioning, and installation constitutes a 'composite supply' and the applicable GST rate. As per Section 2(30) of the CGST/SGST Act, 2017, a 'composite supply' involves two or more taxable supplies of goods or services which are naturally bundled and supplied in conjunction with each other, one of which is a principal supply. The principal supply here is the solar rooftop power plant, with the service portion (erection, commissioning, and installation) being ancillary. The Assistant Commissioner, SGST, confirmed that the service portion is less than 10% of the overall cost, making the supply a 'composite supply' with a GST rate of 5% as per Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. Issue 2: Composite Supply of Solar Irrigation Water Pumping Systems Similarly, the applicant sought clarity on whether the supply of solar irrigation water pumping systems along with design, erection, commissioning, and installation is a 'composite supply' and the applicable GST rate. The components of the solar irrigation water pumping system were detailed, and it was concluded that the principal supply is the solar irrigation water pumping system, with the service portion being ancillary. The Assistant Commissioner, SGST, also confirmed that the service portion is less than 10% of the overall cost, making this supply a 'composite supply' with a GST rate of 5% as per Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. Legal Provisions and Judicial Precedents: The judgment referred to several legal definitions and judicial precedents to support the conclusions. Section 2(30) defines 'composite supply,' and Section 2(74) defines 'mixed supply.' Section 8 outlines the tax liability for composite and mixed supplies. The judgment also referenced past notifications and judicial decisions, such as the Rajasthan Electronics & Instruments Ltd. vs CCE and BHEL Vs CCE cases, which provided clarity on the classification of solar power generating systems. GST Council Clarification: The GST Council, in its 31st meeting, clarified that for renewable energy devices and parts, 70% of the gross value is deemed as the value of supply of goods attracting 5% GST, and the remaining 30% as the value of supply of taxable service attracting the standard GST rate. This clarification was incorporated into Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018. Ruling: 1. The supply of solar rooftop power plant and solar irrigation water pumping systems is covered under 'Solar Power Generating System' as per serial no. 234 of Schedule-I of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. 2. The supply in question is treated as a 'composite supply.' 3. 70% of the gross value of the supply is the value of goods attracting 5% GST, and the remaining 30% is the value of taxable service attracting 18% GST as per Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018. This comprehensive analysis ensures that the supply of solar rooftop power plants and solar irrigation water pumping systems, including design, erection, commissioning, and installation, is classified as a 'composite supply' with the specified GST rates applied accordingly.
|
