Builder selling electricity through solar panels

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Rakesh Bandal (Querist)
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05 January 2018 Respected Sir / Madam
A Builder engaged in the business of construction of residential complex after completing the building assessee has installed Solar panel and sales electricity generated to MSEDCL

What is the nature of transaction and changeability of tax for electricity generation activity
is additional depreciation can be claimed by assessee for generation activity, if additional depreciation can be claimed then what will be the rate of normal depreciation

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 January 2018 GST not applicable on sale of electricity. 80% depreciation can be claimed in the first year of installation.

Rakesh Bandal

Rakesh Bandal (Querist)
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05 January 2018 Sir what about Additional depreciation

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 January 2018 Yes additional depreciation can also be claimed and make it 100% depreciation in case of assets used for more than 180 days.

Rakesh Bandal

Rakesh Bandal (Querist)
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06 January 2018 Sir
1. as per amendment in section 32 by finance Act 2016 maximum depreciation can be claimed is 40%
2. but for Charging depreciation for Generation and distribution of power rate of depreciation is different
3. as additional depreciation can be claimed (because as per amendment production of electricity is also considered as manufacturing a thing) then rate of normal depreciation should not be 80% or 40% it should be as per Appendix IA of the section 32
sir please solve my doubt

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 January 2018 See the link.
https://www.google.co.in/url?sa=t&source=web&rct=j&url=https://www.energetica-india.net/download.php%3Fseccion%3Darticles%26archivo%3DOaz68bDAqQ1GbjXRx9gXtdaKNnQRvBtbh6X00YoOOupxH7kEc8x6W8.pdf&ved=0ahUKEwjm5-yM6cLYAhWFOI8KHf43A0YQFggkMAA&usg=AOvVaw03Iy14EVFbbq6GQqy2lgXn

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 January 2018 Agreed with you only 40% depreciation can be claimed.
See the link.
https://www.google.co.in/amp/wap.business-standard.com/article-amp/pti-stories/solar-power-tariffs-may-rise-as-depreciation-benefit-capped-116022901043_1.html

Rakesh Bandal

Rakesh Bandal (Querist)
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08 January 2018 Sir thanks for sharing valuable information

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