Subsidy paid by Government is deductible for arriving at taxable value for chargeability of GST

Last updated: 30 August 2021

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The Gujarat Authority of Advance Ruling has determined that government subsidies provided under schemes like Surya Gujarat Yojna are deductible when calculating the taxable value for GST. This means GST is charged on the price after subtracting the subsidy, not the full system cost. The ruling also clarifies that this deduction does not affect the implications of Section 17(2) of the CGST Act regarding GST Input Tax Credit (ITC) reversal, as the supply remains taxable.

Court :
Gujarat Authority of Advance Ruling (GAAR)

Brief :
In M/s. Greenbrilliance Renewable Energy LLP [ADVANCE RULING NO. GUJ/GAAR/R/34/2021 dated July 30, 2021] M/s. Greenbrilliance Renewable Energy LLP ("the Applicant") is a channel partner to execute the solar rooftop system in Gujarat under the Surya Gujarat Yojna ("SGY Scheme"), and has submitted that under SGY Scheme, beneficiaries can avail benefits of 40% subsidy on solar system cost upto 3KW and 20% subsidy of solar system cost for systems from 3KW-10KW.

Citation :
ADVANCE RULING NO. GUJ/GAAR/R/34/2021 dated July 30, 2021

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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