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<p><span style="font-size:9.0pt">Being Muddled over GST rate imposition on contracts for supply of goods and services for a solar power plant, developers find themselves into turmoil. The Developers are in a confused state in honouring of existing EPC contracts.&nbsp;&nbsp; </span></p> <p><span style="font-size:9pt">Government must instantly provide clarification on GST rates, specifically on the issues grappling the sector as, nothing that causes uncertainty is good for the sector. The levy of 18% GST on installation would dwindle the country&#39;s target to have 100 gigawatts of solar capacity by 2022. Additional tax exposure of 13% (i.e. 18% less 5%) would not only marginalise the returns from such EPC contracts but may act as a deterrent to expansion of the renewable energy sector in India.</span></p> <p><span style="font-size:9pt">Such imposition is likely to increase project cost as no credit of tax so paid is available on account of end product that is solar power (electricity) being outside ambit of GST.</span></p>