Waste-to-energy concession limited to actual plants or devices; biomass boilers and agro waste heaters fall outside the lower GST rate.

Entry 234(e) of Schedule I of Notification No. 1/2017-Central Tax (Rate) was interpreted as covering only specified renewable energy devices and parts for their manufacture, including waste-to-energy plants or devices in the statutory and policy sense. Biomass fired steam boilers and agro waste thermic fluid heaters were treated as boilers generating steam or thermal energy, not as waste-to-energy plants merely because they use biomass or agro waste as fuel. The analysis also notes that the related circular applies only where goods are used in the initial setting up of such plants with the required buyer documentation, and that the earlier excise exemption was not pari materia. The goods were therefore placed outside the concessional 5% entry and under the residual 18% GST rate.

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Issues: Whether biomass fired steam boilers and agro waste thermic fluid heaters are covered by Entry 234(e) of Schedule I of Notification No. 1/2017-Central Tax (Rate) as waste to energy plants or devices, and whether they instead fall under the general rate entry attracting 18% GST.

Analysis: Entry 234 of Schedule I grants concessional GST only to specified renewable energy devices and parts for their manufacture. The phrase "waste to energy plants/devices" was read as a complete class of renewable energy plant or device meant for recovery of energy from waste in the sense understood in the statutory and policy framework, and not merely any boiler using biomass or agro waste as fuel. The products in question were found to be boilers generating steam or thermal energy, not waste to energy plants of the kind contemplated by the notification. The circular on waste to energy plants was applied to reinforce that the concession is available only where the goods are used in the initial setting up of such plants and the necessary buyer documentation exists. The reliance on the earlier excise exemption was also rejected as the earlier entry was not pari materia with the GST notification.

Conclusion: The products are not covered by Entry 234(e) of Schedule I of Notification No. 1/2017-Central Tax (Rate) and do not qualify for the concessional rate of 5%.

Final Conclusion: The appeal fails and the ruling classifying the goods under the residual tariff entry attracting 18% GST stands confirmed.

Ratio Decidendi: A boiler or heater using biomass or agro waste does not fall within the concessional entry for "waste to energy plants/devices" unless it is itself a waste-to-energy plant or is demonstrably required for the initial setting up of such a plant under the notification.

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