2026-VIL-429-AP
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SGST High Court Cases

GST – Taxability of supply of solar power generating systems, issue of separate invoices for the supply of goods and services - Petitioner had been paying GST at an effective rate of 8.9% by applying the 70:30 mechanism set out in the relevant GST Rate notifications – Dept issued an assessment order demanding tax at 18% on the entire value, rejecting the petitioner's claim for the 70:30 mechanism - Whether the petitioner is entitled to pay GST on the supply of solar power generating systems and related services by applying the 70:30 mechanism as per the relevant GST notifications, or whether the higher rate of 18% can be levied on the entire value – HELD - A conjoint reading of the Entry 234 of Notification No. 1/2017 C.T (R), dated 28.06.2017 and Entry No.38 in Service rate Notification No.11/2017-C.T (R), dated 28.06.2017 and the explanations thereto clearly indicate that the 70:30 mechanism is applicable even if the petitioner has issued separate invoices for the supply of goods and services, as long as the supplies were made under a single contract - The respondent's contention that the 70:30 mechanism would not apply due to the issuance of separate invoices is rejected, as this does not negate the existence of an overall contract for the supply of solar power generating systems. Any supply of a Solar Power Generating System, or it’s parts as one supply or as separate parts would not make any difference, to the rate of tax. The view of the respondent to the contrary is incorrect – Further, the respondent failed to conduct a proper exercise to ascertain the value of goods and services separately and apply the appropriate rates of tax. The impugned order appears to be an attempt by the third respondent to simply raise revenue for the state without applying his mind to the facts - The impugned assessment order is set aside to the extent of the levy of differential rate of tax on the supply of goods and services of solar power generating systems and solar power-based devices – The writ petition is allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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