Value of Solar Power Generating Systems to be taxed under GST

In a decisive ruling on GST classification and valuation, the Court reaffirmed that solar power generating system contracts, being composite in nature, must be taxed in accordance with the statutory deeming fiction under Notifications 1/2017 and 11/2017. 

It rejected the Department’s attempt to treat supplies as separate merely due to invoicing structure and clarified that the 70:30 split (goods vs services) applies irrespective of billing methodology. 

The decision underscores that statutory fiction overrides factual fragmentation and that tax authorities cannot bypass prescribed valuation mechanisms to impose higher rates. The ruling also exposes mechanical assessments lacking factual analysis and reinforces adherence to notification-based taxation.