Vikram Solar Limited Vs Commissioner of Central Tax (Andhra Pradesh High Court)
The Andhra Pradesh High Court allowed a writ petition challenging a GST assessment order relating to execution of contracts for supply, installation, and operation of solar power generating systems for the period April 2018 to March 2020. The petitioner, a registered GST assessee, contended that its contracts involved supply of solar power generating systems and related parts, which were taxable at a concessional rate of 5% under the relevant GST notification, treating the supply as a composite supply of goods and services.
The Assessing Authority rejected this contention and held that the contracts were works contracts relating to immovable property, taxable at 18%. The central dispute was whether the solar power generating systems installed by the petitioner constituted movable or immovable property.
Before the High Court, the petitioner relied on subsequent GST notifications, particularly Notification No. 24/2018 dated 31.12.2018, which introduced an explanation to Entry No. 234 of Schedule I to Notification No. 1/2017. The explanation provided that where solar power generating systems and related goods are supplied along with services, 70% of the gross consideration should be treated as supply of goods taxable at 5%, and the remaining 30% as supply of services taxable at 18%, resulting in an effective tax rate of 8.9% on the gross consideration.
