In Re Greenbrilliance Renewable Energy LLP (GST AAR Gujarat)
A) Whether subsidy amount is to be reduced for arriving at the taxable value of the solar system from the system price declared by the Nodal agency? And the GST liability shall be on the taxable value calculated after subtracting the subsidy amount from the system price?
The taxable Value on Tax invoice issued to the Customer shall be arrived after deducting the subject Subsidy from ‘System Cost’ and GST liability is on the Taxable Value.
(B) What will be the implication of sub-section (2) of Section 17 if the taxable value is derived after subtracting the subsidy amount from system price?
There shall be no implication of Section 17(2) CGST Act, if taxable value is arrived after subtracting the subsidy amount from the system price.
We find that the applicant has collected Subsidy from the Government in this regard and this subsidy amount is inclusive of GST, as detailed in aforementioned paragraphs, the applicant is required by law to pay to the Government the said amount in the subsidy representing GST, irrespective of the position of law that subsidy portion is to be deducted from the value of supply charged to the customer, for arriving at the taxable value.
The applicant sought Ruling on the implications of Section 17(2) CGST Act, if taxable value is derived after subtracting the subsidy amount from the system price. The provisions of Section 17(2) CGST are attracted when the applicant is effecting taxable supplies and exempt supplies. The subject supply of the applicant is a taxable supply and for the reason that taxable value for charging GST is arrived after subtracting subsidy, does not alter the nature of taxable supply. It remains taxable supply. Therefore, for this matter presented before us, there is no implication of section 17(2) CGST.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
BRIEF FACTS
The applicant, M/s. Greenbrilliance Renewable Energy LLP, supplies solar photovoltaic panels and Solar EPC services. The applicant is empanelled as channel partner to execute the solar rooftop system in Gujarat under the Surya Gujarat Yojna 2019-20 and 2020-21:
“Empanelment of Agencies for Design, Supply, Installation, testing & commissioning of Grid connected Rooftop Solar Photovoltaic Systems in Residential premises, aggregating to 600 MW, including five years comprehensive maintenance in the state of Gujarat during the year (2019-20).”
EOI No:PGVCL/DSM/EOI/SRT/2019-20/01 dated 20-7-19.
The Chief Engineer(Tech.)
Paschim Gujarat Vij Company ltd.,
CIN:U40102GJ2003SGC042908., Regd. & Corporate Office,
“Paschim Gujarat VijSevasadan”, Laxminagar,
Nana Mava main road,Rajkot-360004.
2. The applicant has submitted that under the above mentioned scheme, beneficiaries could avail benefits of 40% subsidy of solar system cost for systems upto 3KW and 20% subsidy of solar system cost for systems from 3KW-10KW; that the beneficiaries have to pay the channel partner the amount after deducting the subsidy portion from the total system cost and after successful installation of the solar system, the channel partner has to apply to the respective electricity distribution company(DISCOM) of the region for subsidy and the funds are released by the respective DISCOM directly to channel partners; that the total rate discovered through tendering process for the year 2019-20 is as follows(as per Empanelment letter PGVCL/DSM/SRT/ 9430 dated 12-9-19):
