By setting aside the ruling of the lower authority, the Karnataka Appellate Authority of Advance Ruling (AAAR) in its recent ruling held that On-street lightning activity under Energy Performance Contract GST at 18% rate 
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This comes in a matter where M/s Karnataka State Electronics Development Corporation Ltd. (KEONICS) is the applicant. It is a Karnataka State government body and engaged in providing street lighting services under an Energy Performance Contract to the Thane Municipal Corporation (TMC) for a period of 7 years.
Under the contract, the applicant has the responsibility to operate and maintain 12,000 street lighting fixtures and related feeder panels, including installation of LED fixtures, smart electric panels for automation, metering, and extensive maintenance.
KEONICS wants clarification on the issue that is their street lighting activities as per the Energy Performance Contract covered under the ambit of supply of goods or supply of service under the CGST/SGST Act 
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In the same matter previously AAR Karnataka came up with the decision that street lightning activities under such Energy Performance Contract amount to overall supply where principle supply is of goods. The applicant will have to pay GST at the rate of 12% and no exemption is allowed under entry 3 or 3A of notification no. 12/2017.
It comes after observing that the immediate transaction volume is for the overall supply, including the supply of goods which is the predominant supply in this matter, the issue concerning the time period of service has not been cleared here.
Thereafter, a two-member bench consisting of D.P. Nagendra Kumar and M.S. Srikar canceled the ruling of the lower authority and ruled that Under the Energy Performance Contract, street lighting activity is considered as a composite supply of goods and services 
In GST model Law separate provisions have been prescribed to determine the time of supply of goods and services. Liability for GST (Goods and Services Tax) will. Read more and is the predominant supply of service. Thus it comes under heading 999112.
The AAAR Authority also added in their ruling that On the above-stated supply tax at 9% CGST and 9% SGST will be applicable according to the entry Sl.No 29 of Notification No 11/2017 CT (R) released on June 28, 2017. The Appellant will also not get any benefits of exemption as stated in the entry 3 or 3A of exemption Notification No 12/2017 CT (R) released on June 28, 2017.
