TAX ON SALE OF POWER GENERATED THROUGH SOLAR POWER PLANT

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Bhawna Dubey (Querist)
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20 October 2019 Hi,
One of my client is engaged in the business of trading of Solar Panels. Now he's going to setup a Solar Power Plant in one of his client's premises on his own cost and supply & sale this generated electricity to that person.

Now I am confused in tax implications on this transaction. Which tax is applicable on this supply of generated electricity and how is this accounted??

Thanks

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)
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21 October 2019 Understood that, Mr X (your client ) will set up is plant at his client premises at his own cost and sell power to the client

Since there is no transfer of asset to the client, the solar power investment will be in the books of Mr X under fixed assets, accordingly he is claim claim the depreciation. We will raise invoice to the his client based on generation @ agreed Price per unit.

Since power is an exempted supply, Mr X should nor avail, if availed needs to reverse ITC availed on Solar Plant.