The CBIC vide Circular No. 163/19/2021-GST dated October 06, 2021 has provided clarification regarding GST rates & classification based on the recommendations of the GST Council in its 45th meeting held on September 17, 2021.
Applicability of GST rates on Solar PV Power Projects
Representations have been received seeking clarification regarding the GST rates applicable on Solar PV Power Projects on or before January 01, 2019. The issue seems to have arisen in the context of Notification No.24/2018- Central Tax (Rate), dated December 31, 2018. An explanation was inserted vide the said notification that GST on specified Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, with effect from January 01, 2019. The request has been that same ratio (for deemed value) may be applied in respect of supplies made before January 01, 2019.
As per this explanation, if the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and services, one of which being a taxable service specified in the entry at S. No. 38 of the Table mentioned in the notification No. 11/2017-Central Tax (Rate), dated June 28, 2017, the value of supply of goods for the purposes of this entry shall be deemed as seventy per cent. of the gross consideration charged for all such supplies, and the remaining thirty per cent. of the gross consideration charged shall be deemed as value of the said taxable service. This mechanism for valuation of supply was recommended by the Council considering that it adequately represented the value of goods and services involved in the supply.
The GST Council has now decided to clarify that GST on such specified Renewable Energy Projects can be paid in terms of the 70:30 ratio for goods and services, respectively, for the period of July 01, 2017 to December 31, 2018, in the same manner as has been prescribed for the period on or after January 01, 2019, as per the explanation in the Notification No.24/2018 dated December 31, 2018. However, it is specified that, no refunds will be granted if GST already paid is more than the amount determined using this mechanism.
The Circular can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular%20No.%20163_18_2021_GST.pdf