GST Council giving some breather to solar industry clarified that renewable energy devices and parts will be taxed at 5%, while the services will attract 18% GST.
Before this announcement which came on Saturday, tax officials asked the developers to pay 18% tax resulting to delay the projects.
With the clarity on the tax rate, certain disputes have also popped up. GST council said disputes regarding GST rates where specified goods attracting 5% GST are supplied along with services of construction etc and other goods for solar power plants.
In a bid to resolve such issues, the council recommends that in such cases 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate.
However, this is still lack of clarity in this Industry on the effective dates of the new rates.