Facts: M/s Fermi Solar Farms Private Limited is engaged in operation of renewable energy power plant projects. These typically include operation of solar power plants set up across India for generation and distribution of electricity generation and distribution of electricity generated. The appellant is established under Independent Power Producer category for setting up and sale of power produced from Fermi’s power plant to third party.
The Authority for Advance Ruling, Maharashtra vide Advance Ruling No. GST-ARA-03/2017/B-03 dated March 03, 2018 observe and passed the following order:
- The agreement tendered in support of the transaction reveal that the impugned transaction is for setting up and operation of a solar photovoltaic plant which is in the nature of a ‘works contract’ in terms of clause (119) of Section 2 of the GST Act, and hence, should be taxable at the rate of 18%
- In the absence of any documents, the AAR was not able to deal with the question regarding applicability of concessional rate of tax on parts of solar power generating system in the present proceedings.
- With regards to the question whether benefit of concessional rate of 5% of SPGS and parts thereof would be available to sub-contractors it was held that no documents were provided, and this question was not dealt with in the proceedings.
- Whether in case of separate contracts for supply of goods and services for a solar power plant, there would be separate taxability of goods as ‘solar power generating system’ at 5% and services at 18%?
- Whether parts supplied on standalone basis (when supplied without PV modules) would also be eligible to concessional rate of 5% as parts of solar power generation system?
- Whether benefit of concessional rate of 5% of solar power generation system and parts thereof would also be available to sub-contractors?
Held: The Hon’ble AAAR of Maharashtra vide Order No. MAH/AAAR/SS-RJ/07/2018-19 dated September 4, 2018 upheld that
1.Setting up and operation of a solar photovoltaic plant and are in the nature of ‘works contract” in terms of clause (119) of Section (2) of the GST Act. Schedule II ( Activities to be treated as supply of goods or supply of Services) treats ‘works contract’ u/s 2 (119) as supply of services. Depending upon the nature of supply, intra-state or inter-state the rate of tax would be governed by the entry no 3(ii) of the Notification No 8/2017- integrated Tax (rate) under the IGST Act, 2017 or the Notification no 11/2017 Central Tax/State Tax (Rate)under the CGST Act and MGST Acts. The rate of tax would be 18% under the IGST.
2.The Appellant has not produced any document or agreement before us incorporating such a situation. In the absence of any written agreement showing the terms and conditions, it would be both difficult as well as incorrect for us to determine the same. The situation now is the same as it was before the Advance ruling authority. There being no change in situation, there is nothing we can add. Also, as an ‘appellate authority’ we can decide issues already decided and appealed against. There being no decision given by the advance ruling authority, we cannot give any decision in appeal.
3. The Appellant has not produced any document or agreement before us incorporating such a situation. In the absence of any written agreement showing the terms and conditions, it would be both difficult as well as incorrect for us to determine the same. The situation now is the same as it was before the Advance ruling authority. There being no decision given by the advance ruling authority, we cannot give any decision in appeal.
Citation:  97 taxmann.com 425 (AAAR-MAHARASHTRA)