Solar energy sold to customers exempt from GST under notification entry 104, electricity classified as goods under customs tariff heading 2716.

AAR Kerala ruled that electricity produced from solar panels and sold to customers is exempt from GST under entry 104 of Notification No. 02/2017, as electrical energy is classified as goods under Customs Tariff Heading 2716 00 00. However, the Authority declined to rule on GST liability for wheeling, transmission, distribution and carrying charges by KSEB, holding that such questions regarding services provided to the applicant fall outside the scope of advance ruling provisions under Section 103 of CGST Act.

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Issues Involved:
1. Applicability of GST on the electricity produced from solar panels installed by the applicant when sold to customers.
2. Applicability of GST on various charges billed by Kerala State Electricity Board (KSEB) to the applicant for the distribution of electricity.

Summary:

Issue 1: Applicability of GST on the electricity produced from solar panels installed by the applicant when sold to customers.

The applicant, M/s YIS Power Solutions Private Ltd, sought an advance ruling on whether GST is payable on the electricity produced from solar panels and sold to customers. The Authority for Advance Ruling examined the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act) and relevant notifications. The applicant argued that electricity is classified as "goods" under Heading 2716 00 00 of the Customs Tariff Act and is exempt from GST as per entry at serial No. 104 of Notification No. 02/2017-CT (Rate) dated 28.06.2017. The Authority confirmed that electricity generated from solar panels is indeed classified as goods and is exempt from GST under the specified notification.

Ruling for Issue 1:
The supply of electricity generated from solar panels by the applicant is a supply of goods falling under Customs Tariff Heading 2716 00 00 and is exempt from GST as per entry at SI No. 104 of Notification No. 02/2017-Central Tax (Rate) dated 28.06.2017.

Issue 2: Applicability of GST on various charges billed by KSEB to the applicant for the distribution of electricity.

The applicant also sought an advance ruling on whether KSEB is liable to levy GST on wheeling charges, transmission and distribution charges, and carrying charges billed to the applicant. The Authority noted that the applicant is the recipient of these services and not the supplier. According to Section 103 of the CGST Act, an advance ruling is binding only on the applicant and their jurisdictional officer. Therefore, the ruling on the taxability of services provided to the applicant by KSEB does not fall within the purview of advance ruling as it pertains to inward supplies received by the applicant.

Ruling for Issue 2:
No ruling can be given since the question is not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.

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