Solar EPC contracts are considered as Composite Supply. But the industry practice as well as GST circular states for 70% of contract value considered goods tax at 5% and 30% considered as service at 18%. Also I want to know the invoicing structure as mostly people give only minimal advance amount but we need to generate invoice on entire value for e way bill. So help me out to know right gst taxation and invoicing to optimize my tax.
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Invoicing and GST Taxability for a Solar EPC Business
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Solar EPC contracts have an effective GST rate of 8.9% (70% goods at 5%, 30% services at 18%). Issue a Receipt Voucher for the upfront money and pay GST only on that specific amount. Move your materials to the site using a Delivery Challan, not a Tax Invoice. Generate your E-way bill against the Delivery Challan to stay compliant on the road. Issue Tax Invoices progressively based on contract milestones to protect your working capital.
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