AAR declines ruling on GST liability for solar cables due to insufficient contract documentation to determine transaction scope

AAR Gujarat declined to rule on GST liability for solar cables supplied by the applicant. The authority held that without submission of contract/agreement/tender documents, it could not determine whether the transaction involved only supply of goods or included services like assembly, installation, packing, and transportation. The ruling emphasized that the nature of GST liability would differ significantly if services were involved alongside goods supply. The application was rejected due to insufficient documentation to assess the complete scope of the transaction and applicable tax rates.

---

---

Issues Involved:
1. Applicability of concessional GST rate on Solar DC Cables.
2. Classification of Solar DC Cables under appropriate tariff heading.
3. Determination of whether Solar DC Cables are integral parts of Solar Power Generating Systems.
4. Requirement of documentation to substantiate the claim for concessional GST rate.

Issue-wise Detailed Analysis:

1. Applicability of Concessional GST Rate on Solar DC Cables:
The applicant sought an advance ruling on whether the supply of Solar DC Cables to Solar Power Generating Projects would attract a concessional GST rate of 5% as per Sr.No.234 of Schedule-I of Notification No.01/2017-Integrated Tax (Rate) dated 28.06.2017. The applicant argued that these cables are essential parts of Solar Power Generating Systems, and thus should be taxed at the concessional rate.

2. Classification of Solar DC Cables under Appropriate Tariff Heading:
The applicant contended that Solar DC Cables fall under Chapter Heading No.8544 of the Customs Tariff Act, which includes insulated wires and cables. The judgment confirmed that the cables are indeed covered under Sub-heading 8544 of Chapter-85, thereby satisfying the first condition for concessional GST rate eligibility.

3. Determination of Whether Solar DC Cables are Integral Parts of Solar Power Generating Systems:
The judgment examined whether Solar DC Cables are integral to Solar Power Generating Systems. It was noted that these cables connect solar panels to a combiner box and then to an inverter, converting DC to AC. The technical specifications provided by the applicant indicated that these cables are designed for solar applications and are essential for the system's operation. However, the judgment emphasized the necessity of verifying whether these cables are indeed used as parts of the Solar Power Generating System in the applicant's specific case.

4. Requirement of Documentation to Substantiate the Claim for Concessional GST Rate:
The judgment highlighted the importance of documentation, such as supply contracts, technical specifications, and agreements, to substantiate the claim for the concessional GST rate. Despite requests, the applicant failed to provide the necessary documents, including contracts, tenders, and detailed technical specifications. The judgment referenced Circular No.80/54/2018-GST, which clarifies that suppliers must ensure goods are used in renewable energy projects by obtaining relevant documents from buyers.

Conclusion:
Due to the non-submission of critical documents by the applicant, the judgment could not conclusively determine the applicability of the concessional GST rate on Solar DC Cables. The ruling emphasized that without detailed contracts, technical specifications, and other relevant documents, it is impossible to make a definitive decision on the matter. Therefore, the application for an advance ruling was dismissed, and no decision was provided on the GST rate applicability for the Solar DC Cables supplied by the applicant.

---