Case Law Details
In re Evolve Green Power Private Limited (GST AAR Tamilnadu)
A Power Purchase Agreement (PPA) has been executed between the applicant and the off-taker, under which the off-taker will procure solar power generated by the plant for consumption within their factory premises. This arrangement supports the off-taker’s energy cost optimization and sustainability goals, while aligning with their mission to promote clean and efficient energy solutions. In this back drop, the applicant has sought advance ruling on the following question:
The Tamil Nadu Authority for Advance Ruling (AAR) in In re Evolve Green Power Private Limited examined GST applicability on the supply of electricity generated through a rooftop solar power plant installed at the premises of an off-taker in West Bengal. The applicant, engaged in developing solar power projects, entered into a Power Purchase Agreement (PPA) to generate and supply electricity for captive consumption of the off-taker’s factory. The solar plant remained the asset of the applicant for the duration of the 25-year contract, after which ownership would be transferred to the off-taker. The applicant undertook all activities including design, engineering, procurement, construction, commissioning, and maintenance, while the off-taker provided rooftop space and certain support facilities.
The applicant sought clarity on whether GST was applicable on such supply of electricity, whether separate registration in West Bengal was required, and whether the ruling would apply to similar transactions nationwide. The AAR analysed the arrangement and observed that the agreement was solely for generation and supply of electricity, which qualifies as “goods” under GST law. However, electrical energy is classified under Tariff Heading 27160000 and is exempt from GST under Notification No. 02/2017-Central Tax (Rate).
The Authority further noted that the applicant was exclusively engaged in supplying exempt goods and did not provide any taxable goods or services. Accordingly, under Section 23 of the GST Act, persons exclusively supplying exempt goods are not required to obtain GST registration. The AAR clarified that despite the plant being located in West Bengal, the applicant is not required to obtain separate registration in that state as long as the supply remains limited to exempt electrical energy.
The Authority also held that the activity cannot be treated as an interstate taxable supply for GST purposes, since electricity itself is exempt. It further clarified that if the applicant were to supply taxable goods or services along with electricity, or exceed the prescribed threshold for taxable supplies, the exemption from registration would no longer apply.
On the issue of applicability of the ruling, the AAR stated that under Section 103 of the GST Act, an advance ruling is binding only on the applicant and the concerned jurisdictional authorities, and only when the facts and circumstances remain unchanged. It cannot be automatically applied across all future or pan-India transactions unless identical conditions are met.
In conclusion, the AAR ruled that (i) supply of electricity is exempt from GST, (ii) no GST registration is required for exclusive supply of such exempt goods, and (iii) the ruling is applicable only to the applicant under similar facts and conditions.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
M/s. EVOLVE GREEN POWER PRIVATE LIMITED, 371, SIDCO Industrial Estate, North Phase, Ambattur, Chennai – 600 098. (hereinafter called as the “Applicant”) are registered under the GST Act with GSTIN:33AAECE3274B1Z5. The Applicant is engaged in. the development of solar power projects as part of their renewable energy initiatives, and are currently executing a rooftop solar power plant project. The plant is being installed on the factory rooftop of the off-taker, who will be the end consumer of the solar energy generated.
2. A Power Purchase Agreement (PPA) has been executed between the applicant and the off-taker, under which the off-taker will procure solar power generated by the plant for consumption within their factory premises. This arrangement supports the off-taker’s energy cost optimization and sustainability goals, while aligning with their mission to promote clean and efficient energy solutions. In this back drop, the applicant has sought advance ruling on the following question:
Query-/: Whether on the basis of the facts, the applicant which is liable to collect and pay Goods and Service Tax (GST) on intra state delivery of electrical energy on the basis of the above agreement? If so) then the applicant is needed to apply for an GST Registration in West Bengal and then raise the Bill of Supply of Electrical Energy to its client namely M/ s. Shyam Sel & Power Limited formally known as M/ s. Shyam Metalics Flat Products Private Limited? or
Query-2: Whether on the basis of the facts the applicant can collect and pay Goods and Services Tax (GST) on interstate delivery of electrical energy on the basis of the above agreement? From its registered office at No.371, SIDCO Industrial Estate, Ambattur, Chennai, Tamil Nadu. Since, we don’t have our branch office situated in Jamuria, West Bengal?
Query-3: Will the outcome of this Advance Ruling will be applicable for all upcoming orders involved in similar transaction of sale of Electrical Energy at PAN India Level.
2.1 The Applicant has made a payment of application fees of Rs. 5,000/-each under sub rule (1) of Rule 104 of CGST Rules, 2017 and SGST Rules, 2017.
3.Statement of relevant facts:
The Applicant stated that they are having their registered office at No. 371, SIDCO Industrial Estate, Ambattur, Chennai, Tamil Nadu. They have entered into a PPA agreement dated 13.07.2024 and Addendum to PPA agreement on 02.06.2025 with. M/s. Shyam Sel 86 Power Limited(Off-taker) formally known as M/s. Shyam Metallics Flat Products Private Limited for supply of electrical energy by way of creating solar park at their roof top in their factory premises at CRM complex, Bhahadurpur, Jamuria, Burdwan Bijayanagar more, Mouza dhasna Paschim, Bardhama, West Bengal- 713 362 for a capacity of 2.3 MW. The created solar park at their premises will be the asset of M/ s. Evolve Green Power Private Limited (applicant), whereas the applicant shall sell the electrical energy (electricity) generated in their solar plant to the off-taker by issuing sales of energy invoices on monthly basis based on the unit generated. The “Delivery Point’ shall mean the busbar of the end consumer i.e., connectivity of end consumer with DISCOM vide DISCOM Meter NO.5SL0721 consumer Account No.000900005411. The generated electrical energy supplied to the off-taker will be utilized for the manufacturing process involved at the place of premises of M/ s. Shyam Sel 86 Power Limited only. The applicant is not involved in activities of transmission and distribution of electrical energy (neither a TRANSCOM nor a DISCOM). The project is about to get completed and the DISCOM related connectivity process will resume in a short note. Then after the completion of the project, applicant shall be in a position to issue the Bill of Supply of electrical energy in favour of their off-taker as per the PPA agreement. Hence, to facilitate these activities in a smoother way they have applied for this Advance Ruling for a clarity.
4. Interpretation of Law by the Applicant based on the statement of facts:
4.1 The applicant submits as follows:
Exemption Notification Supply of Goods:
As per the Notification No.2/2017, dated 28.06.2017 vide entry at Sr.No.104, Chapter/Heading/Sub-heading Tariff item 2716 00 00 and description of goods electrical energy, electrical energy has been exempted from GST
Exemption Notification Supply of Services:
4.2. Notification No.12/2017, dated 28.06.2017, Transmission or distribution of electricity by an electricity transmission or distribution utility is taxable at Nil rate.
5. The applicant falls within the administrative jurisdiction of ‘STATE’. NO remarks has been received from the State jurisdictional authorities as well as the Central jurisdictional authorities. Hence, it is construed that there are no pending proceedings against the applicant on the questions raised by them in their advance ruling application.
6.Personal Hearing
6.1 The applicant was given an opportunity to be heard in person on 17.02.2026 vide this office memorandum No. 45/2025, dated 10.02.2026. Mr. Sathish Math, Technical Engineer, Mr. Pritesh Kumar, Accounts Department and Mr. Naveen, Billing Division Head, all are from the applicant’s company, appeared as Authorized Representatives on behalf of the applicant for the hearing.
6.2 AR reiterated the facts submitted with the AAR application. AR explained the activity being done by the applicant. AR stated that the applicant is engaged in the development and construction of solar power projects. They are executing a roof top solar power plant in the factory premises of M/ s. Shyam Sel 85 Power (P) Ltd and that the solar plant shall remain as asset of the applicant. The applicant has entered into Tower Purchase Agreement’ (PPA) for generation and supply of electricity only for captive consumption for their customer. Monthly invoices shall be raised for sale of electrical energy based on units generated and consumed, as agreed in the agreement. The contract is for a period of 25 years and after the period of completion, the plant will be handed over to their customer.
6.3 AR informed that the applicant engages a contractor for construction of solar power plant. AR states that applicant is not availing ITC on the expenses incurred on the construction and erection of solar power plant. AR stated that Sl. No. 104 of Notification No. 02/2017-CT (Rate) dated 28-06-2017 specifies that Electrical Energy is exempt from payment of GST.
7.Discussions and Findings:
7.1 We have carefully considered the submissions made by the applicant in the advance ruling application, and the submissions made during the personal hearing held on 17.02.2026.
7.2 The applicant located in the state of Tamilnadu has entered into a Power Purchase agreement (PPA) with M/ s. Shyam Sel 85 Power Limited for generation of electrical energy and its supply to them, for captive consumption, through Solar Power Plant being installed in the roof-top of the factory premises. The contract is for a period of 25 years and the Solar Power Plant is an asset of the applicant during the period of contract and will be handed over to the off taker after the contract is over.
7.3 Going forward, The applicant’s queries will be dealt one by one for arriving at a conclusion.
8. Analysis of Query-1 & 2:
8.1 Here as per the Power Purchase Agreement (PPA), the agreement between the applicant and the off-taker is only supply of electricity. This supply is by generation through Solar Power Plant. The plant is constructed, erected, commissioned, operated, maintained and owned by the applicant. As the power plant is set up on the roof-top of the factory of the off-taker, the area of space for construction and installation is provided by the off-taker free-of cost, allow access to the site for authorized employees, agents, representatives or contractors without rental or any other charges for operation, maintenance, cleaning, repair, servicing_ of the plant during the course of agreement. After installation and commissioning also, the Solar Power Plant will be the asset of the applicant till the period of contract and the off-taker shall not claim its ownership until the same is transferred to the off-taker. Further, as per the agreement, the solar power plant shall not be shown as a fixed asset in the books of accounts of off-taker.
8.2 From the above facts, it is clear that the applicant is constructing and erecting the Solar Power Plant by and for himself in the factory’s roof-top of the off-taker where the area of the space for the plant is provided free of cost. Further, the cost of setting up is expensed in the applicant’s books of accounts and shall not be claimed by the off-taker as per the PPA agreement. Therefore, the liability of tax on the service of construction and erection of the Solar Power Plant does not arise.
8.3 As per the scope of work contained in Annexure-IV of the agreement, pre-design works, design 85 engineering, procurement 85 delivery, construction (civil 85 electrical), commissioning and post-commissioning activity and all approvals 85 permissions are to be done by the applicant and only provision of space in roof for setting up the plant, water, construction/upgradation of meters, check meters, security (man power) and any modification needed are to be borne by the off-taker.
8.4 As per clause (C) 85 (D) of the PPA agreement, to meet the off-taker’s part of total electrical energy requirements, the off-taker had sought the applicant for supply of alternate source of electrical energy. For that purpose, the applicant had agreed to develop and install the solar power plant at the roof-top of the factory premises with a capacity upto 4.5 MW and to operate, manage and maintain the same for generation and supply of electricity to the buyer at the delivery point for the off-taker’s own usage in the factory premises.
8.5 Hence, it is clear that the agreement between the applicant and off-taker is for generation and supply of electrical energy through DISCOM (Distributing Company) at the delivery point. The consideration for such supply of electricity at the delivery point is paid as per the agreed tariff for a period of 25 years and the invoicing should be on monthly basis as metered at the delivery point.
8.6 As ‘Electrical energy’ is ‘goods’, in terms of Section 7(1)(a), it falls within the scope of supply. Section 7 of the Act defines ‘supply’ as,
Section 7. Scope of supply.-
(1) For the purposes of this Act, the expression – “supply” includes-
(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
1(aa) the activities or transactions, by a person„ other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration.
Explanation .-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;]
(b) import of services………
8.7 The applicant’s Principal place of business is located in the state of Tarnilnadu. They are rendering the activity of supply of electrical energy to the off-taker’s factory located at Bardharnan, West Bengal. The Solar Power Plant is a fixed asset of the applicant. The place of supply is destination based where the goods or services are consumed, which is the criteria for determining whether the transaction is interstate (IGST) or intrastate (CGST-FSGST).
8.8 The Solar Power Plant though installed at the roof-top of factory premises of the off-taker, is an asset of the applicant and the supply of electricity is to be done by them for a period of 25 years as per the agreement. According to GST law, registration is state-specific and PAN-based. Construction, erection, operation and maintenance of a solar power plant in a state outside the current registered state of the applicant makes them necessary to obtain a new GST registration in the state where the asset is situated and supply is affected. Further, establishments of the same person in different states are treated as “distinct persons” under Section 25(4) of the Act.
8.9 Electricity is treated as ‘goods’ and are classified under Tariff Heading 27160000 as ‘Electrical Energy’ attracting `Nil’ rate of GST vide Notification No. 02/2017-Central Tax(Rate) dated 28 June 2017. The activity of the applicant shall not be considered as ‘Interstate supply’ for the reasons discussed above.
Section 23 of the Act states that,
Section 23. Persons not liable for registration. –
(1) The following persons shall not be liable to registration, namely:-
(a) any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;
(b) an agriculturist, to the extent of supply of produce out of cultivation of land.
1[(2) Notwithstanding anything to the contrary contained in sub-section (1) of section 22 or section 24, the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, specify the category of persons who may be exempted from obtaining registration under this Act.]
8.10 As per the facts presented to us, the applicant is supplying only the `electrical energy’, which is wholly exempted and no other supply of goods or services or both, effected by them. Therefore, no registration is required to be taken if only electricity is supplied as the same is wholly exempted. If supply of electricity is made along with any taxable goods or services, and if the applicant exceeds the threshold limit of aggregate turnover or engage in taxable interstate supplies, the exemption from registration ceases and shall not be available to them.
9. Analysis of Query-3
*Section 103. Applicability of advance ruling –
(1) The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only-
a. on the applicant who had sought it in respect of any matter referred to in sub section (2) of section 97 for advance ruling;
b. on the concerned officer or the jurisdictional officer in respect of the applicant.
(1A) The Advance Ruling pronounced by the National Appellate Authority
a. the applicants, being distinct persons, ……………
b. the concerned officers and the jurisdictional officers ……………..
(2) The advance ruling referred to in sub-section (1)2jand sub-section (1A)] shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed.
As per Section 103 of the Act, an advance ruling pronounced by the Advance Ruling Authorities shall be binding on the applicant, the concerned officer and the jurisdictional officer. This advance ruling pronounced is applicable to the applicant only if the law, facts/circumstances contained in this application on the queries raised in any matter referred to in subsection (2) of Section 97 of the Act, is same.
10. Based on the above discussion, we rule as under:
RULING
i. Whether on the basis of the facts, the applicant which is liable to collect and pay Goods and Service Tax (GST) on infra state delivery of electrical energy on the basis of the above agreement? If so) then the applicant is needed to apply for an GST Registration in West Bengal and then raise the Bill of Supply of Electrical Energy to its client namely M/ s. Shyam Sel & Power Limited formally known as M/ s. Shyam Metalics Flat Products Private Limited? Or
And
ii. Whether on the basis of the facts the applicant can collect and pay Goods and Services Tax (GST) on interstate delivery of electrical energy on the basis of the above agreement? From its registered office at No.371, SIDCO Industrial Estate, Ambattur, Chennai, Tamil Nadu. Since, we don’t have our branch office situated in Jamuria, West Bengal?
As per the facts, the applicant is not required to get GST registration in terms of Section 23 of the Act, as they are engaged in the exclusive supply of exempted goods, namely, ‘Electrical Energy’.
iii. Will the outcome of this Advance Ruling will be applicable for all upcoming orders involved in similar transaction of sale of Electrical Energy at PAN India Level.
As per Section 103 of the Act, this Advance Ruling decision is applicable if the law, facts/circumstances contained in this application on the queries raised in any matter referred to in sub-section (2) of Section 97 of the Act, is same.
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