Source: GST Sutra
Based on the review of the case the Karnataka Appellate Authority for Advance Rulings agrees with findings of AAR that supply of Photovoltaic (PV) module is a transaction originated and in distinct nature by itself and not to be construed as naturally bundled with supply of remaining components and parts of ‘solar power plant’; Notes that appellant has transformed the contract into two parts in the initial stage itself i.e. first a supply of Photovoltaic (PV) module which forms about 60-70% of the contract value and second for supply of remaining parts and components and services;
Observes that PV module is purchased overseas and transferred on High Sea Sale (HSS) basis to owner of project who then makes it available to applicant without a consideration at project site; “This supply without consideration is not within the fold of the definition of ‘supply’ as stated in Section 7 of the CGST Act…hence does not attract GST” states AAR while reviewing that contract itself mentions that term “equipment” does not cover “free issue equipment”; terms that supply of PV module is separated at both cases and never coupled with other items/services, while stating that intention in two transaction is different – on matter of PV module sold on High Sea Sales, it is sale and thereafter other transactions in goods and services are to follow;
Notifies that supply of balance components and parts and supply of services of Erection, Installation and Commissioning of the Solar Power Plant is ‘composite supply’ as supply is naturally bundled, accordingly, tax rate applicable to the dominant nature of supply shall prevail; hence in this issue whether concessional rate of 5% can be extended in respect of sub-contractor’s supplies, opines that, if supply by sub-contractor to Appellant is of goods which can be termed as ‘parts’ of Solar Power Generating System, then rate applicable will be 5% in terms of Sl. No. 234 or Notification No. 01/2017-Integrated Tax (Rate) dated June 28, 2017: Karnataka AAAR
The order was passed by Shri A.K. Jyotishi and Shri M.S. Srikar
In a landmark AAR ruling the Karnataka Appellate Authority for Advance Rulings (AAAR) upholds order of AAR which held that GST is leviable on the rent payable by a hospital supplying lifesaving services (cardiology and emergency services).
It clarifies that the appellant is providing health care services and the hospital is run on-premises taken on lease for which GST is paid by the appellant on the rental amount;
It further observes that healthcare services are exempted from GST by virtue of Sl. No. 74 of Notification No. 12/2017-Central Tax (Rate), while GST is leviable at 18% (CGST+SGST) on the rent payable for premises taken on lease for running the hospital in terms of Notification No. 11/2017-Central Tax (Rate);
As regards the appellant’s contention that ITC of GST paid on rent cannot be availed as output supply is not taxable, hence a refund should be allowed. It elucidates that said question was not raised before AAR and is raised for the first time in the appeal;
Consequently, Karnataka AAAR rules that, “there can be no appeal on issues on which no ruling was sought before the Authority for Advance Ruling” u/s 97 and dismisses the appeal of the appellant.
The order was passed by Shri A.K. Jyotishi and Shri M.S. Srikar.
Rajasthan AAR holds that “Supply, installation, Commissioning and maintenance of Solar Water Pumping systems” falls under the purview of ‘Works contract’ u/s 2(119) of CGST, taxable at 18% (CGST+SGST);
It clarified that such supplies are not taxable as the supply of “solar water generating system” falling under HSN 84 or 85 which are taxable at 5% vide Notification No. 1/2017-Central Tax (Rate);
It observed that Solar Photovoltaic (SPV) water pumping system has a permanent location at specified farmer’s field in Rajasthan as its work is undertaken on instructions of Rajasthan Horticulture Development Society under subsidy scheme, hence, such plant would have an inherent element of permanency;
It further said the system is tailor-made which cannot be shifted “as it is”, which observing that applicant has to supply a whole system which includes supply, installation, commissioning & maintenance for 10 years, which is neither a ‘Solar Power Generating System’ nor a ‘Solar Power Based Devices’;
It explained that it is a single Contract of supply, installation, commissioning and maintenance of Solar Water Pumping systems which cannot be split into 2 separate contracts, therefore separate bills of supply of goods and supply of services cannot be raised.
The order was passed by Shri. Nitin Wapa (Central Tax) and Shri. Sudhir Sharma (State Tax)
Rajasthan AAR allows withdrawal of application for determination of the applicability of clarification dated January 8, 2018, to “industrial canteen”;
Applicant engaged in business/activity of providing canteen services to various segments of business houses including Corporates and Universities submitted that they were charging GST at 18% classifying their services as an “outdoor caterer”.
The order was passed by Shri. Nitin Wapa (Central Tax) and Shri. Sudhir Sharma (State Tax).
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