Solar pump controllers classified under CTH 8504 40 90 as static converters, GST rate 12%

The AAR Tamil Nadu classified solar pump controllers under CTH 8504 40 90 as static converters rather than other headings. The product converts DC power from solar panels to AC power for submersible pumps, incorporating MPPT technology and voltage regulation features. The Authority determined this constitutes a standalone converter device that optimizes and delivers power to pumps. The applicable GST rate was set at 12% total (CGST 6% + SGST 6%) effective from October 1, 2021, under the amended tax notification schedules for solar power equipment integration.

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Issues Involved:
1. Tax rate for HSN code 85044090
2. HSN code for solar pump controller

Detailed Analysis:

Issue 1: Tax Rate for HSN Code 85044090

The applicant, a manufacturer of a Solar Pump Controller, sought clarification on the applicable GST rate for HSN code 85044090. The applicant initially assessed the GST rate at 18% but faced customer concerns suggesting a 5% rate. The Authority examined the classification and tax rate applicable to the product.

The product, Versa Solar Pump Drive, designed for agricultural and other uses, converts solar power to drive submersible pumps. It includes features like Maximum Power Point Tracking (MPPT), remote monitoring, and compatibility with various motor types.

The Authority reviewed the relevant Customs Tariff and Explanatory Notes, determining that the product falls under CTH 8504, specifically under CTH 85044090 as a static converter. This classification was based on the product’s function of converting electrical energy for further use, incorporating auxiliary circuits for voltage regulation.

The applicable GST rate was initially specified under Sl.No. 234 of Schedule I of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, which listed renewable energy devices at 5%. Effective 01.10.2021, this entry was omitted, and the applicable rate is now under Sl.No. 201A of Schedule II of the same notification, as amended by Notification No. 08/2021 dated 30.09.2021, specifying a 12% GST rate (6% CGST and 6% SGST).

Issue 2: HSN Code for Solar Pump Controller

The applicant sought the correct HSN code for their Solar Pump Controller. The Authority examined the product’s specifications and functions, concluding that it is a static converter. The product converts DC power from solar panels to AC power for submersible pumps, optimizing performance with MPPT and other features.

The Authority determined that the product falls under CTH 8504, specifically under CTH 85044090. This classification aligns with the product’s function as a static converter, incorporating auxiliary circuits for voltage regulation, as described in the Explanatory Notes to HSN.

Ruling:

1. The product "Versa Solar Pump Drive" is classifiable under CTH 8504, more precisely under CTH 85044090.
2. The applicable rate of tax on the product, when supplied for integration with solar panels and AC submersible pumps, effective from 01.10.2021, is CGST @ 6% and SGST @ 6%, as per Sl. No. 201A of Schedule II of Notification No. 01/2017-CT (Rate) dated 28.06.2017, as amended by Notification No. 08/2021-Central Tax (Rate) dated 30.09.2021.

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