GST
TRT-2025-
Andra Pradesh High Court
Date:-10-01-25
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 10 January 2025
Parties: Sterling and Wilson Private Limited Vs Joint Commissioner (Commercial Taxes) and others
Facts –
- The Petitioner, Sterling and Wilson Private Limited, is engaged in setting up solar power plants and paying GST at 5% and applied for a refund for the input tax credit, for the period January–March 2018.
- This was denied, and the respondent initiated an inquiry regarding tax assessments for November 2017–September 2018. It was concluded that the petitioner’s activities qualify as a "works contract" under Section 2(119) of the GST Act, which attracts an 18% GST rate and raised a tax demand along with interest and penalty.
Issue –
- Whether the supply and installation of solar power generating systems is composite supply of goods or works contract involving immovable property?
Order –
- The Divisional Bench of Hon’ble High Court observed that the property, which is attached to a structure embedded in the earth, would also become immoveable property only when such attachment is for the permanent beneficial enjoyment of the structure, which is embedded in the earth. In this case, the civil foundation is embedded in the earth.
- However, the solar modules and the Solar Power Generating System have not been attached to the civil structure for the purpose of better enjoyment or beneficial enjoyment of the civil foundation. On the contrary, the civil foundation has been embedded on earth for better permanent and beneficial enjoyment of the Solar Power Generating Station.
- Applying the aforesaid test, it must be held that the property in question, viz., the Solar Power Generating System would not answer the description of immoveable property. The transaction in question would not fall within the meaning of ―works contract‖ as defined under Section 2(119) of the GST Act. Accordingly it was held that the supply of the Solar generating Power Station, is a composite supply, it would not amount to a works contract.
Download Case Law
