Seeking Clarification for Tax rate and reversal of ITC claimed on Ground Mount Solar Plant
This query is : Resolved
Quick Summary
07 February 2026
Sir / Madam,
Our Company has owned one Ground Mounted Solar Plant and get commissioned the plant in the year 2023. While procurement GST rate was 70% of project cost @12% tax and 30% of project cost @18%. And we claimed and utilized the ITC. We are utilizing the full power units generation to our textile unit(Group Captive). Now we propose to sell the entire plant. Kindly advise us what is the correct GST tax rate
Query No 1:
whether 70% of the project cost @5% ( present solar modules tax rate is reduced to 5%) and remaining project cost (30% )@ 18% or
for entire project @ 5% tax rate as it is used and old.
Query No 2:
Kindly advise us whether our understanding is correct or not. While selling the plant we should have to reverse the ITC proportion distributed to 60 months as we are going to sell the plant within 5 years.
Kindly clarify that
whether we have to reverse the ITC proportion or no need to reverse the ITC we claimed on the project.
A lot of Thanks in advance,
With warm regards,
Bazeer L
Our Company has owned one Ground Mounted Solar Plant and get commissioned the plant in the year 2023. While procurement GST rate was 70% of project cost @12% tax and 30% of project cost @18%. And we claimed and utilized the ITC. We are utilizing the full power units generation to our textile unit(Group Captive). Now we propose to sell the entire plant. Kindly advise us what is the correct GST tax rate
Query No 1:
whether 70% of the project cost @5% ( present solar modules tax rate is reduced to 5%) and remaining project cost (30% )@ 18% or
for entire project @ 5% tax rate as it is used and old.
Query No 2:
Kindly advise us whether our understanding is correct or not. While selling the plant we should have to reverse the ITC proportion distributed to 60 months as we are going to sell the plant within 5 years.
Kindly clarify that
whether we have to reverse the ITC proportion or no need to reverse the ITC we claimed on the project.
A lot of Thanks in advance,
With warm regards,
Bazeer L
08 February 2026
Sale of commissioned solar plant attracts 12% GST on transaction value.
ITC reversal is not automatic — you must pay higher of GST on sale value or ITC attributable to remaining useful life (out of 60 months).
ITC reversal is not automatic — you must pay higher of GST on sale value or ITC attributable to remaining useful life (out of 60 months).
Message likes :
1 times
09 February 2026
Thank you very Much,Sir for your guidance / advice.
09 February 2026
Thank you very Much,Sir for your guidance / advice.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CG Tax On residential property
- Post Office RD Interest
- Applicable TDS for Purchase of Flat from NRI
- Eway bill for machinery reparing
- Claiming exemption of perquisite for employee-owned car under New Tax Regime in ITR-2
- Under construction property in ITR
- Gift of mutual fund units to daughter
- Upload Level ValidationITR3Category of Defect B/D
- NRI ITR2 account in 2025-26 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,.
- Reporting of STCG on Property in ITR
- ITR-4 vs ITR 5
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
