The applicant, M/s Evolve Green Power Private Limited, is a Chennai-based company that entered into a Power Purchase Agreement to install and operate a 2.3 MW solar plant on the rooftop of M/s Shyam Sel & Power Limited’s factory in West Bengal. Under this 25-year agreement, the solar plant remains a fixed asset owned and maintained by the applicant, while the off-taker provides the roof space for free and consumes the electricity generated.

The applicant bills the off-taker monthly based on the actual units of electrical energy produced, even though the applicant does not currently have a branch office or a separate GST registration in West Bengal.

Issues involved in the case

1. Whether they are required to obtain a new GST registration in West Bengal to supply electricity to the client there.

2. Whether the delivery of electrical energy should be treated as an intra-state or inter-state supply and if GST must be collected?

3. Would this ruling be applicable to all future similar orders across India (PAN India level)?

Decision of the AAR

The Authority for Advance Ruling (AAR) held that the applicant is not required to obtain GST registration in West Bengal because they are engaged exclusively in the supply of electrical energy, which is classified under Tariff Heading 2716 00 00 and is wholly exempt from GST under Notification No. 02/2017-Central Tax (Rate). Under Section 23 of the Act, persons supplying only exempt goods are not liable for registration.

Furthermore, the authority determined that no tax liability arises for the construction and erection of the solar plant since the applicant is constructing it for themselves as a fixed asset on the off-taker’s rooftop. Finally, it was ruled that while this decision is binding on the applicant and the jurisdictional officer per Section 103, its applicability to future orders at a PAN India level depends on the law, facts, and circumstances remaining identical to those presented in this application.