Solar Home Lighting Systems classified under HSN 94055040 attracting 12% GST rate under General Rules interpretation

AAR UP ruled that Solar Home Lighting Systems should be classified under HSN heading 94055040 and attract 12% GST. The authority applied General Rules for interpretation of import tariff, determining that when goods cannot be classified by specific description or essential character criteria, they should be classified under the heading occurring last in numerical order among equally meritorious options. The ruling clarified GST rate applicability for solar power-based devices under the relevant notification provisions.

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Issues Involved:
1. Classification of Solar Home Lighting System under 'Solar power based devices'.
2. Applicable GST rate and HSN code for the Solar Home Lighting System.

Summary:

Issue 1: Classification of Solar Home Lighting System under 'Solar power based devices'

The applicant, M/s R2V2 TECHNOLOGIES PRIVATE LIMITED, sought clarification on whether their Solar Home Lighting System falls under 'Solar power based devices' as mentioned in Entry No. 201A of Schedule II of Notification No. 1/2017-CENTRAL TAX (RATE), dated 28-6-2017, as amended by Notification No. 8/2021-CENTRAL TAX (RATE) dated 30-9-2021.

The applicant described the Solar Home Lighting System as an integrated system comprising Solar Photo-Voltaic Modules, Lithium Ferro Phosphate battery, Solar Charge Controller, LED Lights, Solar DC Fan, Module Mounting structure, Subscriber end visual display / Tablet, AC-DC Adapter, and Conduit items like cable, PVC Pipes, and PVC Fittings. The system is designed to provide green energy for lighting and charging devices in a house.

The Authority examined the applicant's submission and the relevant notifications. It was determined that the Solar Home Lighting System is covered under 'Solar power based devices' as per Entry No. 201A of Schedule II of the said notification.

Issue 2: Applicable GST rate and HSN code for the Solar Home Lighting System

The applicant also sought clarification on the applicable GST rate and the HSN code for the Solar Home Lighting System. The Authority referred to the relevant HSN codes and the General Rules for the Interpretation of Import Tariff. It was concluded that the Solar Home Lighting System should be classified under heading 94055040.

The applicable GST rate for the Solar Home Lighting System was determined to be 12% (CGST @ 6% and SGST @ 6%).

Ruling:

1. The supply of Solar Home Lighting System is covered under 'Solar power based devices' as per Entry No. 201A of Schedule II of Notification No. 1/2017-CENTRAL TAX (RATE), dated 28-6-2017, as amended by Notification No. 8/2021-CENTRAL TAX (RATE) dated 30-9-2021.
2. The Solar Home Lighting System is to be classified under heading 94055040 and is taxable at a GST rate of 12% (CGST @ 6% and SGST @ 6%).
3. The third question is not applicable as the first question was answered in the affirmative.

This ruling is valid only within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh and subject to the provisions under Section 103(2) of the CGST Act 2017 until and unless declared void under Section 104(1) of the Act.

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