Solar pump with panel and controller treated as mixed supply under Section 2(74) CGST Act requiring highest GST rate

The AAR-UP ruled that supply of solar driven submersible pump consisting of solar panel, controller, and water pump constitutes mixed supply, not single or composite supply. Each component functions independently and can be supplied separately. No principal supply exists, and components are not bundled in ordinary course of business. Since the supply involves multiple independent goods sold together for single price without natural bundling, it qualifies as mixed supply under Section 2(74) CGST Act, 2017, attracting highest GST rate among the components.

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Issues Involved:
1. Applicable tax rate on the sale of solar-driven submersible pumps.
2. HSN code for solar-driven submersible pumps.

Summary:

Issue 1: Applicable Tax Rate on Sale of Solar-Driven Submersible Pump

The applicant, M/s Aastha Traders, sought an advance ruling on the GST rate applicable to solar-driven submersible pumps. The Authority for Advance Ruling (AAR) examined the components of the solar-driven submersible pump, which include solar panels, a controller, and a water pump. It was determined that each component has its own classification and corresponding GST rate:
- Solar Panels: Classified under Tariff heading 8541 43 00, chargeable to GST at 12% (6% CGST + 6% SGST).
- Controller: Classified under Chapter Heading 8504, chargeable to GST at 18% (9% CGST + 9% SGST).
- Water Pump: Classified under Tariff heading 8413, chargeable to GST at 18% (9% CGST + 9% SGST).

The AAR concluded that the supply of these components together does not constitute a "composite supply" but rather a "mixed supply" as defined under Section 2(74) of the CGST Act. Consequently, as per Section 8(b) of the GST Act, the highest rate of tax among the supplied goods applies. Therefore, the applicable tax rate on the sale of solar-driven submersible pumps is 18% (CGST@9% and SGST@9%).

Issue 2: HSN Code for Solar-Driven Submersible Pump

The applicant also sought an advance ruling on the HSN code for solar-driven submersible pumps. The AAR determined that since the supply involves different components (solar panels, controller, and water pump) that can function independently, it does not qualify as a "composite supply." Instead, it is treated as a "mixed supply." As a result, the highest rate of GST among the supplied goods applies. The specific HSN code for each component would be:
- Solar Panels: HSN 8541 43 00.
- Controller: HSN 8504.
- Water Pump: HSN 8413.

Therefore, the HSN code for the solar-driven submersible pump will be treated as a mixed supply, and the highest rate of GST will be applicable among the goods supplied by the applicant.

Ruling:

1. Applicable Tax Rate: 18% (CGST@9% and SGST@9%).
2. HSN Code: Treated as mixed supply, with the highest rate of GST applicable among the goods supplied.

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

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