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Turnkey EPC contract is a "composite supply"

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Appellate Authority for Advance Ruling —– Solar Power Plant –Work Contract--The appellant executed ‘Engineering Procurement, and Commissioning’ - EPC contracts for Solar Power Generating Systems commonly known as ‘Solar Power Plants’. The appellant contracted to do end to end setting up of a solar power plant which includes supply of various goods as well as complete design, engineering and transportation, unloading, storage and site handling, installation and commissioning of all equipments and material, complete project management as well as civil works/construction related services for setting up of a functional Solar Power Plant. The Appellant sought an advance Ruling as to whether contract for Erection, Procurement and Commissioning of Solar Power Plant shall be classifiable as Supply of Goods or Supply of Services under the Act and their respective classification and rate of tax. The AAR held that the contract for Erection, Procurement and Commissioning of Solar Power Plant falls under the ambit “Works Contract Services” (SAC 9954) of Notification no. 11/2017 Central Tax (Rate) dated 28 June, 2017 and attracts 18% rate of tax. The appellant filed appeal the order of the AAR.
Held that:- The Hon’ble Appellate Authority for Advance Ruling held that the said Turnkey EPC contract is a ‘composite supply’ under section 2(30) of the Act and falls within the definition of Works contract under section 2(119) of the Act, (SAC9954) and attracts 18% rate of tax.—RFE Solar Private Limited, Jaipur, In Re… [2018] 06 TAXLOK.COM 087 (AAAR-Rajasthan)