GST Amendments: Rate on Solar Power generating plant, renewable energy plants

Recently, Govt. of India has come up with a proposal which is in favour of citizens of India by making changes in GST rates in variety of products and among which it also has an impact over Solar utlilities.


GST rate of 5% rate has been prescribed on renewable energy devices & parts for their manufacture (bio gas plant/solar power based devices, solar power generating system (SGPS) etc) [falling under chapter 84, 85 or 94 of the Tariff]. Other goods or services used in these plants attract applicable GST.
Certain disputes have arisen regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plant.


To resolve the dispute the Council has recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC (Engineering, Procurement & Construction) contract shall be deemed as the value of supply of taxable service attracting standard GST rate.


These changes are going to impact the market and future of power generation through renewable energy sources in India.


Source: The Indian Iris

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