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2021 (12) TMI 219 - AAR - GSTPermission for withdrawal of Advance Ruling application - supply of turnkey engineering, procurement and construction (EPC) contract for construction of solar power plant wherein both goods and services are supplied - composite supply or not - supply of 'Solar Power Generating System' - taxable at 5% GST or otherwise? - HELD THAT - The Applicant, vide their letter dated 18.08.2021, requested this authority to permit them to withdraw the application filed for advance ruling quoting the reason that they have got the clarity on manufacturing of solar power systems and the rate of tax applicable thereon from the Notification No.24/2018-Central Tax (Rate) dated 31.12.2018. Further the applicant has to discharge fee of ₹ 5,000/- each under CGST Act 2017 as well as KGST Act 2017 as per Section 97 (1), whereas the applicant has not discharged the fee of ₹ 5,000/- each under any of the CGST/KGST Act 2017 and hence the instant application is liable for rejection under Section 98(2) of CGST Act 2017. The application filed by the Applicant for advance ruling is hereby rejected.
Issues:
1. Application for Advance Ruling under CGST and KGST Acts without fee payment. 2. Nature of supply in turnkey EPC contract for solar power plant. 3. Taxability of 'Solar Power Generating System' at 5% GST rate. Issue 1: Application for Advance Ruling without fee payment The case involved an application for Advance Ruling by a Private Limited Company engaged in EPC of solar power plants. The application was filed under Section 97 of the CGST Act, 2017 and KGST Act, 2017 without discharging the required fee of ?5,000 each under both Acts. The applicant later requested to withdraw the application citing clarity obtained on manufacturing of solar power systems and applicable tax rates from a specific notification. However, as the fee was not paid as required by Section 97(1) of the Acts, the authority rejected the application under Section 98(2) of the CGST Act, 2017. Issue 2: Nature of supply in turnkey EPC contract The applicant sought an advance ruling on whether the supply of a turnkey engineering, procurement, and construction (EPC) contract for constructing a solar power plant, involving both goods and services, could be considered a composite supply under Section 2(30) of the CGST Act, 2017. However, the ruling on this issue was not provided as the application was rejected due to non-payment of the required fee. Issue 3: Taxability of 'Solar Power Generating System' Another question raised in the application was regarding the taxability of a 'Solar Power Generating System' at a 5% GST rate. However, this issue was not addressed in the ruling as the application was rejected based on the non-compliance with fee payment requirements under the CGST and KGST Acts. In conclusion, the Authority for Advance Rulings, Karnataka rejected the application for advance ruling due to the non-payment of the required fee under the CGST and KGST Acts, thereby not providing a ruling on the questions raised regarding the nature of supply in a turnkey EPC contract for a solar power plant and the taxability of a 'Solar Power Generating System' at a 5% GST rate.
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