GST CLASSIFICATION AND RATE ON SUPPLY, INSTALLATION, AND MAINTENANCE OF SOLAR WATER PUMPING SYSTEMS UNDER SUBSIDY SCHEME
RAJASTHAN AUTHORITY FOR ADVANCE
RULING
GOODS AND SERVICES TAX
Case Title- M/s Tag Solar System
(GST AAR RAJASTHAN)
Advance Ruling No..RAJ/AAR/2018-19/11
Date of Judgment/Order- 18th August 2018
IMPORTANT PARAGRAPHS
Para No. 1. M/s. Tag Solar System, a partnership firm which is engaged in Supply. Commissioning, Installation, Maintenance of Solar Water Pumping System within a stipulated time period.
Para No. 2. Such Supplies are given on the instructions of the Rajasthan Horticulture Development Society under subsidy scheme wherein the Solar Water Systems are required to be installed at the farmer’s field. The scope of work is reproduced hereunder: “supply, installation, commissioning and maintenance of Solar Water Pumping Systems”
Para No. 5. Findings and analysis:
As per copy of contract submitted by the applicant i.e. M/s Tag Solar System has to execute “Supply of Solar Photovoltaic (SPV) water pumping system”. After going through the written submissions, copy of contract and other additional statements following findings and analysis are made:
a) M/s Tag Solar System, is a partnership firm is engaged in Supply. Commissioning, Installation, Maintenance of Solar Water Pumping System.
b) Such Supplies are given on the instructions of the Rajasthan Horticulture Development Society under subsidy scheme wherein the Solar Water Systems are required to be installed at the farmer’s field.
c) The intention in the instant case is not to procure goods of Solar Photovoltaic (SPV) water pumping system but to procure a completely functional Solar Photovoltaie (SPV) water pumping system as a whole wherein applicant undertakes end to end responsibility of supply of equipments including installation and commissioning to a defined technical specifications and testing, commissioning of a fully functional Solar Photovoltaic (SPV) water pumping system.
RULING
Para No. 1. As per the statement of facts submitted by the applicant, the scope of work includes procurement, supply, development, testing, commissioning and providing maintenance service for 10 years in respect of supply of a Solar Photovoltaic (SPV) water pumping system. Accordingly it is not getting covered under supply of ‘Solar Power Generating System’ under Entry 234 of Schedule I of the Notification no. 1/2017 – Central Tax (Rate), dated 28* of June, 2017 under HSN code 84 or 85. “Supply, installation, commissioning and maintenance of Solar Water Pumping Systems” falls under the purview of Works Contract as per Section 2(119) of GST Act.
Para No. 2. The applicant has sought a clarification on division of contract in two, one for supply of material and other for installation, commissioning and maintenance of Solar Water Pumping Systems. In this regard it is opined that in instant case as per terms and conditions of agreement, it is a single contract of supply. installation, commissioning and maintenance of Solar Water Pumping Systems and hence cannot be split in two separate contracts. Hence in instant case separate bills for supply of goods and supply of services cannot be raised.
Para No. 3. The contract for supply, installation, commissioning and maintenance of Solar Water Pumping Systems” falls under the ambit of ” Works Contract Services” which comes under the purview of Works Contract as per Section 2(119) of CGST Act and attracts 18% rate of tax under IGST Act, or 9% each under the CGST and SGST Acts, aggregating to 18%.
