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.
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.
Thankyou for the reply. So from your opinion we can issue multiple invoices based on milestone to a single customer. And each invoice should be split in 70:30 ratio right.
One things also if I do this, the gst liability will occur in the same month. As usually the installation takes 5 days max. It can work when we received any advance at the last week of any month.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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