2018 (11) TMI 446 - AAR - GST

Air-Cooled Condenser for Waste-to-Energy Project: GST Rate 5% - Integral Part of Plant

The ruling authority classified the Air-Cooled condenser supplied for the waste-to-energy project under Heading 234 of Notification 1/2017-Central Tax ... Classification of goods - Air-Cooled condenser to be supplied by the applicant to the buyer for use in the waste-to-energy project - whether classifiable as ‘parts for the manufacture of waste to energy plants/ devices’ attracting 5% IGST or 2.5% CGST and 2.5% APGST? - Held that:- Heading 8404 of the Customs Tariff covers “Auxiliary plant for use with boilers of heading 84.02 or 84.03 (for example, economizers, super-heaters, soot removers, gas recoverers); condensers for steam or other vapour power units” and Entry 840420 specifically covers Condensers for steam or other vapors power units - The equipment under consideration viz. ACC consists of finned tubes which condense steam with the help of a forced current of air is thus rightly classifiable under heading 8404. Therefore, the ACC is classifiable under the Heading 8404 - ACC is an integral part of Waste to Energy plants. Ruling:- Air - Cooled condenser is a part of the Waste to Energy plant, which falls under the entry 234 of Schedule I of Notification 1/2017-Central Tax (Rate) dated 28.06.2017 (similar notification for state tax and integrated tax) and is liable at a rate of 5% (2.5% CGST + 2.5% SGST or 5% IGST as the case may be). Issues:Classification of Air-Cooled condenser supplied for waste-to-energy project under GST.Analysis:The applicant, a private limited company, sought clarification on whether the Air-Cooled condenser supplied for a waste-to-energy project qualifies as 'parts for the manufacture of waste to energy plants/devices' attracting 5% IGST or 2.5% CGST and 2.5% APGST. The applicant's registration details showed they fall under the jurisdiction of the Superintendent of Central Tax, Sullurpet range. The jurisdictional officer confirmed no pending or passed proceedings on the raised issues. A personal hearing was scheduled, and the authorized representative presented the case.The applicant, engaged in designing, manufacturing, and supplying Air Cooled Condensers (ACC) for renewable energy devices, received an order for an ACC package for a waste-to-energy plant project. The waste-to-energy project involves processing Municipal solid waste (MSW) to generate steam from boilers, with the exhaust condensed in ACC. The applicant sought a ruling on the classification of the ACC system under relevant GST notifications.The ruling authority analyzed the relevant GST notifications, specifically Notification 1/2017-Central Tax (Rate), which includes 'Waste to energy plants/devices' under Heading 234, attracting 2.5% CGST and 2.5% SGST. The ACC, falling under Heading 8404 of the Customs Tariff, is considered an integral part of Waste to Energy plants. Therefore, the ACC supplied for the waste-to-energy project is classified under Heading 234, liable at a rate of 5% (2.5% CGST + 2.5% SGST or 5% IGST). The ruling concluded that the Air-Cooled condenser is indeed part of the Waste to Energy plant, as per the relevant GST notifications.In conclusion, the ruling determined that the Air-Cooled condenser supplied for the waste-to-energy project falls under the entry 234 of Schedule I of Notification 1/2017-Central Tax (Rate), attracting a GST rate of 5% (2.5% CGST + 2.5% SGST or 5% IGST).