AAR Grants Relief on GST Registration for Interstate Solar Power Supply

M/s. Evolve Green Power Private Limited, engaged in developing solar power projects, entered into a Power Purchase Agreement (PPA) with M/s. Shyam Sel & Power Limited for setting up a rooftop solar power plant at the latter’s factory in West Bengal.

The solar plant, though installed at the off-taker’s premises, remained the asset of the applicant during the 25 year contract period. The applicant agreed to generate and supply electricity for captive consumption, billing monthly based on units consumed. The applicant sought clarity on GST liability, the requirement of registration in West Bengal, and the applicability of the ruling across similar transactions.

Central Issue: Whether the supply of electricity under the PPA attracts GST, whether the applicant is required to obtain GST registration (including in another state), and whether the ruling applies PAN India?

Tribunal Decided: The Authority held that electrical energy is classified as goods but is wholly exempt from GST under Notification No. 02/2017-CT (Rate). Since the applicant is exclusively engaged in supplying exempt goods, no GST is payable on such supply. Consequently, as per Section 23 of the CGST Act, the applicant is not required to obtain GST registration, including in West Bengal, so long as it deals only in exempt electricity supply.

However, if the applicant undertakes any taxable supply or crosses the prescribed threshold, registration requirements would apply. The AAR further clarified that its ruling is binding only on the applicant and jurisdictional authorities, and applicability to other transactions depends on identical facts and legal position.

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