RAJASTHAN AAR RULES EPC CONTRACTS FOR SOLAR PLANTS ATTRACT 18% GST

RAJASTHAN AAR RULES EPC CONTRACTS FOR SOLAR PLANTS ATTRACT 18% GST

RAJASTHAN AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX

Case Title- RFE Solar Private Limited

(GST AAR RAJASTHAN)

Advance Ruling No.RAJ/AAR/2018-19/08

Date of Judgment/Order- 1st July 2018

IMPORTANT PARAGRAPHS

Para No. 1.1. M/s RFE Solar Private Limited is engaged in business of developing power projects in India. It is undertakes development, design, engineering, supply, installation, testing and commissioning to establish solar power plant at various states in India.
Para No. 1.2. M/s RFE Solar Private Limited is private limited company under the provisions of the Companies Act 2013 and is also registered under the provisions of the Central Goods and Services Tax Act 2017 read with the provisions of the Rajasthan State Goods and Services Tax Act 2017 (“Assessee”). It will undertake itself in executing ‘Engineering Procurement and Commissioning “EPC” contacts for Solar Power Generation System commonly known as “Solar Power Plants”.

RULING

Para No. 1. As per the statement of facts submitted by the applicant, the scope of work in respect of “Turnkey EPC Contract” includes civil works, procurement of goods and erection and commissioning. Accordingly, “Turnkey EPC Contract” are not getting covered under supply of ‘Solar Power Generating System’ under Entry 234 of Schedule I of the Notification no. 1/2017 – Integrated Tax (Rate), Entry 234 of Schedule I of the Notification no. 1/2017 – Central Tax (Rate) both dated 28 June, 2017 and Entry 234 of Schedule I of the Notification no 1/2017 – State Tax (Rate) dated 29 June, 2017. EPC Contract for Solar Power plant comes under the purview of Works Contract as per Section 2(119) of GST Act.
Para No. 2. The contract for Erection, Procurement and Commissioning of Solar Power Plant falls under the ambit ” Works Contract Services” ( SAC 9954 ) of Notification no. 11/2017 Central Tax (Rate) dated 28 June, 2017 and attracts 18% rate of tax under IGST Act, or 9% each under the CGST and SGST Acts, aggregating to 18%.