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Solar Industry Awaits for Clarification on GST Rates

<p>Developers are muddled of imposition of GST on Solar Projects. Different views of states Authority for Advance Rulings (AAR) has created mis-understanding among developers as setting up solar projects usually involve two separate contracts with the developer &ndash; one for supply of goods, which includes solar panels and related equipment , and the other for setting up the plant, erecting civil works, connecting transmission lines, etc. Some states AAR&rsquo;s ruling, have concluded that GST rate for the first contract should be 5% and for the second, 18% and some state&#39;s AAR concluded that these contracts should invite GST at 18%. Developers are most concerned about GST imposition as, it jeopardizes economics/viability of the projects&nbsp;</p> <p>The problem has genesis in the fact that concessional GST rate of 5% applies to solar power generating system, but solar power generating systems (SPGS) are is not defined in the law.</p> <p>GST council should treat the matter as most urgent and address the issue at earliest, as the situation in impacting solar Industry. This would also deter objectives of Prime Minister Narendra Modi&rsquo;s plan for 100 gigawatts by 2022.</p>