GST Rates on Solar PV Power Projects- CBIC Clarification
The CBIC issued Circular No. 163/19/2021-GST dated 06th October 2021 clarifying on various GST classification issues including GST rates on Solar PV Power Projects. The Circular reads as follows:
- Representations have been received seeking clarification regarding the GST rates applicable on Solar PV Power Projects on or before 01-01-2019. The issue seems to have arisen in the context of notification no. 24/2018- central tax (rate), dated 31.12.2018. 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 01.01.2019. The request has been that same ratio (for deemed value) may be applied in respect of supplies made before 01.01.2019.
- 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 Sl. No. 38 of the Table mentioned in the notification no. 11/2017- central tax (rate) dated 28.06.2017, the value of supply of goods for the purposes of this entry shall be deemed to as seventy percent of the gross consideration charged for all such supplies, and the remaining thirty percent of 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 01.07.2017 to 31.12.2018, in the same manner as has been prescribed for the period on or after 01.01.2019, as per the explanation in the notification no. 24/2018 dated 31.12.2018. However, it is specified that, no refunds will be granted if GST already paid is more than the amount determined using this mechanism.
Source: CBIC Circular No. 163/19/2021-GST
