2026-VIL-374-AP
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SGST High Court Cases

GST – Applicable rate on supply of Solar Power Generating Systems - Assessment order seeking to tax supply of Solar Power Generating Systems at the rate of 5% for 70% of the turnover and 18% for 30% of the turnover, based on an explanation inserted in Notification No. 24/2018 to Sl.No. 234 of Notification No. 1/2017-Central Tax (Rate) - Whether the explanation inserted in Notification No. 24/2018, which deemed the supply of goods and services in relation to Solar Power Generating Systems as 70% supply of goods and 30% supply of services for the purposes of levy of GST, is valid and mandatory – HELD - The view of the Deputy Commissioner, that the explanation inserted in Notification No. 24/2018 created a mandatory legal fiction, resulting in higher taxation on the petitioner, is incorrect. The explanation was added to aid the suppliers of the goods mentioned in Sl.No. 234 of Notification No. 1/2017-Central Tax (Rate), and cannot be treated as a mandatory provision that would compel the suppliers to pay a higher rate of tax - The adjudicating authority had not gone into the question of whether the supplies made by the petitioner had resulted in the creation of immovable property, in which case the provisions of Section 8 of the CGST Act read with the rate of tax stipulated under Sl.No. 234 of Notification No. 1/2017 would be applicable. The authorities have not considered the petitioner's contention that the explanation introduced by Notification No. 24/2018 would only be applicable from 01.01.2019, and not retrospectively – Further, the Circular No. 163/19/2021-GST dated 06.10.2021 only extended the applicability of the explanation at the option of the taxpayer, and not as an absolute retrospective application of the explanation, which was brought into effect from 01.01.2019 - The impugned assessment order is set aside and matter is remanded back to the Deputy Commissioner to pass a fresh order of assessment, after considering the nature of the petitioner's supplies and the applicability of the explanation introduced by Notification No. 24/2018 - The writ petition is disposed of
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