AAR Clarifies Registration Requirements and Tax Treatment for Inter-State Solar Project Supplies

The applicant, M/s Safety Controls & Devices Limited (SCDL), is a Lucknow-based company that was awarded a contract by NTPC for the installation and commissioning of a solar PV project in Bikaner, Rajasthan. The contract involved the supply of goods and services, including civil works and electrical installations.

The applicant sought an advance ruling to determine if they were legally required to obtain a separate GST registration in Rajasthan to execute the project or if they could continue to operate as an unregistered person in Rajasthan by making interstate supplies from their Uttar Pradesh office.

Main Issue: Whether the applicant is required to obtain GST registration in Rajasthan for the execution of a solar project or can make interstate supplies from its registered office in Lucknow. What is the correct tax treatment for inward supplies received at the project site in Rajasthan?

AAR’s Decision: The Authority for Advance Ruling (AAR) ruled that the applicant is not required to take a separate registration in Rajasthan, provided they do not have a “fixed establishment” or “place of business” in the state. The Authority observed that the supply of goods and services for the solar project can be treated as an inter-state supply from the Uttar Pradesh office to the client in Rajasthan, attracting IGST.

The RAAR clarified that for goods/services sourced from UP and shipped to the Rajasthan site, IGST would apply. However, for goods or services procured from local vendors within Rajasthan for delivery at the Rajasthan site, the transaction would be intra-state (CGST + SGST), and the applicant could use the “Bill To-Ship To” model to manage the tax flow.

To Read Full Judgment, Download PDF Given Below