18% GST on EPC Contract of solar power plant treated as ‘Works contract’

In re RFE Solar Pvt Ltd. (GST AAR Rajasthan)

As per the statement of facts submitted by the applicant, the scope of work in respect of “Turnkey EPC Contract” includes civil works, procurement of goods and erection and commissioning. Accordingly, “Turnkey EPC Contract” are not getting covered under supply of ‘Solar Power Generating System’ under Entry 234 of Schedule I of the Notification no. 1/2017 – Integrated Tax (Rate), Entry 234 of Schedule I of the Notification no. 1/2017 – Central Tax (Rate) both dated 28 June, 2017 and Entry 234 of Schedule I of the Notification no 1/2017 – State Tax (Rate) dated 29 June, 2017. EPC Contract for Solar Power plant comes under the purview of Works Contract as per Section 2(119) of GST Act.

The contract for Erection, Procurement and Commissioning of Solar Power Plant falls under the ambit ” Works Contract Services” ( SAC 9954 ) of Notification no. 11/2017 Central Tax (Rate) dated 28 June, 2017 and attracts 18% rate of tax under IGST Act, or 9% each under the CGST and SGST Acts, aggregating to 18%.

Also Read AAAR Ruling- Turnkey EPC Project for Solar Plant comes under Works Contract,18% GST payable

FULL TEXT OF ORDER OF ADVANCE RULING AUTHORITY RAJASTHAN

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