The Applicant is engaged in generation of renewable energy power plants projects which includes solar power plants. The electricity generated through solar power plants is also distributed by the Applicant. The Applicant has contended that they enter into two sets of contracts with the buyers i.e. one for supply of goods relating solar power plant and the second for supply of services.

The Applicant has sought Advance Ruling on applicability of tax liability of supply of goods or services or both.

The agreement is for supply of an effectively running solar power plant which is nothing but work contract agreement. Work Contract has been defined under Section 2(119) of CGST Act, 2017. According to the definition, work contract does not end with erection of a building but is extended till successful testing and commissioning of the complete system. Splitting of the work into two parts will not change status of the contract. As per the definition of work contract given under above said legal provision the entire job would be assessed as one contract only which is a supply of service and not supply of goods. The said service is chargeable to GST @ 9% of CGST and 9% SGST under Notification No.1/2017-CT (R) dated 28.06.2017.

Crux Erection and commissioning of solar power plant is a work contract supply as per Section 2(119) of CGST Act and attracts tax @ 18%.