Question:A Ltd is engaged in the business of installation of Residential Solar Panels. Cost of Solar Panel is, say Rs. 1000. The Government is giving subsidy (say e.g. of Rs. 200) to A Ltd for every installation done by him. In this case, what amount should he bill to his customer? 1000 Rs. or 800 Rs.? (1000 – 200 Subsidy)
section 2(31) Definition of Consideration specifically excludes subsidy received from Govt. Considering that the subsidy amount should be excluded?
Answer: As rightly pointed by your good self, Consideration excludes subsidy received from Central State Government. In case this subsidy provided by the government is directly linked to the price of the supply, the amount of subsidy shall not be included in the value of supply of service who receives the subsidy. In such cases the person will be required to issue invoices under GST without including the value of subsidy.
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