GST on Wind mills and its parts -reg

[N Balachandran]

Sir,

1. Can u please clarify the GST rate applicable on parts and procured for Wind Mills ( Wind Electric generator ) Renewable energy device.

2. We are manufacturer of wind mills and the GST is applicable on Wind Mill is 5%. When we undertake supply and erection including civil works , DP yard etc., What will be rate of GST on the whole?

3. What is the GST rate if we undertake civil work including land?

Regards

N.Balachandran

[vk agarwal]

My comments are as follows:

1. Parts , which are designed for use solely with wind mills and are not covered under any other heading of chapter 84 or 85 will attract 5% rate under heading 8503. parts which are specifically classifiable under a particular heading of chapter 84 or 85 will remain classified in their respective heading and attract GST rate as applicable under the respective heading. For example, Gear box is specifically classifiable u/h 8483 which attracts 18% rate. This is because the rules for interpretation of customs tariff have been made applicable for the interpretation of notification under which rates of GST have been notified. Please refer to note 2(a) to section XVI of customs tariff as per which parts which are goods in themselves classifiable under a particular heading will be classified under that heading only

2. If you supply wind mill and erection with a separate price , then wind mill will attract 5% and erection will attract 18%. If you supply both under same invoice with a composite price, there is a possibility that the whole thing might be treated as a works contract and attract rate of 18% for the entire value including supply

3. The whole thing will attract 18%

AI Summary

GST classification for windmill parts determines reduced rate for dedicated parts while works contracts attract standard rate. Parts specifically classifiable under Chapters 84 or 85 retain their respective GST rates; parts designed solely for windmills attract the concessional windmill heading rate. Supply of windmills invoiced separately from erection results in the concessional rate for the goods and the standard rate for erection; a single composite price may be treated as a works contract and taxed at the standard rate, and civil works and land-related activities are taxable at the standard rate.