Subsidy provided by Govt. not to be included in value of supply to arrive at taxable value: AAR

Case details: Authority for Advance Rulings, Gujarat Green brilliance Renewable Energy LLP, In re - [2021] 132 taxmann.com 77 (AAR - GUJARAT)

Judiciary and Counsel Details

• • Sanjay Saxena and Arun Richard, Member
  • Jay Patel for the Applicant.

Facts of the Case

The applicant was supplying photovoltaic panels and Solar EPC services and empanelled as channel partner to execute the solar rooftop system in Gujarat under the Surya Gujarat Yojna. As per the scheme, the beneficiaries have to pay channel partner amount after deducting subsidy portion from total system cost and after successful installation of solar system, channel partner has to apply to respective electricity distribution company (DISCOM) of region for subsidy and funds are released by respective DISCOM directly to channel partners. It filed an application for advance ruling to determine whether subsidy should be reduced for arriving at taxable value of solar system in order to collect GST on goods supplied to customer under rooftop solar project.

AAR Held

The Authority for Advance Ruling observed that applicant collected subsidy from Government and this subsidy amount would inclusive of GST. The DISCOM would be only a facilitator between Government and applicant (channel partner) of solar rooftop PV systems in disbursing subsidy. Therefore, subsidy portion provided by Government shall not be included in value of supply to arrive at taxable value, as per section 15(2) (e) of CGST Act, 2017. Thus, taxable value on tax invoice issued to customer shall be arrived after deducting subsidy from ‘System Cost’ and GST liability would be on taxable value.