TaxTMI 
TaxTMI 
2021 (1) TMI 540
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.... other to generate electricity from sunlight and its storage. The description and function of each of the equipments is discussed herein under: a) Solar Panels (also known as "Photovoltaic / PV Panels") are made of solar cells (also known as "PV cells") which are connected to each other in series and parallel connection. Solar cells are made up of silicon semiconductor material which converts the energy generated from sunlight into electrical energy. The electrical energy generated by conversion of sunlight is known as Solar power. Solar PV modules/panels are to be positioned at proper inclination to collect maximum energy from the sunlight. Hence, these panels are generally installed on the slanting rooftops or slanting industrial sheds with the help of ruts and bolts so that it can perform its designated function i.e. to collect sunlight in efficient manner. However, where slanting base for mounting is not available, these panels are stationed on the module mounting structures erected in the fields / rooftops to collect maximum energy from the sunlight. These mounting structures are made of angles, channels, etc. and these are fixed on a concrete foundation. These struct....
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....pes of SPGS which are Solar Rooftop Plant and Ground Mounted Solar Power Plant (Grid Connected) on a turnkey basis whereby the Applicant will supply the abovementioned equipment and will undertake designing, erection, commissioning and installation of the same at the customer's site. (A) Solar Rooftop Plant: Solar Rooftop Plant is a Solar Photovoltaic system which generates electricity from solar panels mounted on the rooftop of a residential or commercial building or structure viz industrial shed. These are usually ranging from few Kilowatt (KW) to less than a Megawatt (MW). Since Solar PV modules/panels are to be positioned at proper inclination to collect maximum energy from the sunlight, these panels may be installed on the slanting rooftops / industrial sheds with the help of nuts and bolts or where slanting base for mounting is not available, these panels may be fixed on the module mounting structure by using nuts and bolts. The module mounting structure is made of standard GI/aluminium angle and fixed on rooftops with the help of concrete foundation. The Solar panels as well as the mounting structure can be easily unbolted, moved and installed at anothe....
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....al or grasslands, minimum civil work (base) is required to provide the stability to the angles/mounting structures holding the Modules/Panels. Such angles / structures can be fixed into the base which can be removed at any time depending on the requirement and re-fix in a different place. The remaining two essential parts of system viz. Solar PCU and Battery bank can be installed anywhere connected to the panels. 1.5 Apart from three essential components i.e. solar panels, solar PCU and battery bank, following components are also required in case of ground mounted solar power plant: (iv) Transformer: the power output of the inverter is at the low voltage and as there is high loss at the low voltage, transformer is used to step up the voltage at the higher level in order to minimize the cable losses. (v) HT Switchgear: this component consists of the relays and the circuit breaker that in turn are used to protect the system in case of any faults in the plant. Air Circuit Breaker, Vacuum Circuit Breaker and SF6 circuit breaker are normally used in the HT switchgears. (vi) Outgoing Switchyard: This consists of the power transformer, its protective relays a....
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....at the rate of 2.5%. Notification No. 35/ST-2 dated 30.06.2017 is the corresponding Notification issued under Haryana SGST Act. 4.2 Entry 234 of Notification 1/2017 has been reproduced below for the ease of reference: Schedule 1- 2.5% S.No. Chapter/Heading/Sub-heading/Tariff item Description of Goods 234 84, 85 or 94 Following renewable energy devices & parts for their manufacture a) Bio-gas plant b) Solar power based devices c) Solar power generating system d) Wind mills, Wind Operated Electricity Generator (WOEG) e) Waste to energy plants / devices f) Solar lantern / solar lamp g) Ocean waves/tidal waves energy devices/plants h) Photo voltaic cells, whether or not assembled in modules or made up into panels. 4.3 Keeping in view the above position of law during the relevant period, the Applicant sought an advance ruling from the Authority of Advance Ruling (GST), Haryana on the following issues: A. Whether the EPC contract for complete design, engineering, manufacture, procurement, testing, inspection and complete erection and commissioning of solar power generating system (....
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....ant. 4.7 To resolve the disputes, the Council recommended that in all such cases, the 70% of the gross value shall be deemed as the value of supply of said goods attracting 5% rate and the remaining portion (30%) of the aggregate value of such EPC contract shall be deemed as the value of supply of taxable service attracting standard GST rate. The council has also clarified that the exact formulation will be worked out in consultation with Ministry of Law. If different valuation methodology is determined by the Ministry of Law, then the specified formulation as notified under CGST/SGST Act 2017 will be applicable on the applicant. 4.8 The Govt., in exercise of the powers conferred by sub-section (1) of Section 9 and sub-section (5) of section 15 of the CGST Act, 2017 and on the recommendations of the Council, brought amendments in the Notification No.1/2017- Central Tax (Rate) dated 28.06.2017 by way of Notification No. 24/2018- Central Tax (Rate) dated 31.12.2018 (hereinafter referred to as goods rate note notification). In the said Notification, in Schedule-1-2.5% against Serial No. 234, in the entry in column (3), the following Explanation has been inserted in the end, name....
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....te notification. A copy of the letter dated 26.04.2019 has been enclosed herewith as Annexure-5. 4.11 The Hon'ble Appellate authority for Advance Ruling for the State of Haryana vide its order dated 26.04.2019 = 2019 (4) TMI 1822 - APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA quashed the order dated 29.08.2018 passed by the Authority of Advance Ruling by holding that the advance ruling obtained by the Applicant was prior to the amendments made with effect from 01.01.2019 by the Govt. vide notifications dated 31.12.2018 under the CGST/HGST Act, 2017 in the respective entries. The Appellate Authority further held that there is a change in the rate of tax and the percentage of Goods and Services involved in SPGS, after Notification No.24/2018- Central Tax (Rate) dated 31.12.2018 and Notification No. 27/2018- Central Tax (Rate) dated 31.12.2018which have completely changed with effect from 01.01.2019. Accordingly, the advance ruling dated 29.08.2018 was quashed and the Applicant was permitted to approach the advance ruling authority for taking a decision afresh in accordance with law. A copy of the order dated 26.04.2019 passed by the Hon'ble Haryana Appellate Authority f....
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....nder SI no. 234 of Notification No.1/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no. 24/2018-Central Tax (Rate) dated 31.12.2018 and SI no. 38 inserted in Notification no. 11/2017- Central Tax (Rate) dated 28.6.2017 vide Notification no. 27/2018-Central Tax (Rate) dated 31.12.2018? (ii) Whether the supply of goods along with service of designing, erection, commissioning & installation of Solar Power Generating System along with other goods is covered under SI no. 234 of Notification No.1/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no. 24/2018-Central Tax (Rate) dated 31.12.2018 and SI no. 38 inserted in Notification no. 11/2017- Central Tax (Rate) dated 28.6.2017 vide Notification no. 27/2018-Central Tax (Rate) dated 31.12.2018? 6. Interpretation of the Applicant: 6.1 In the instant case, the Applicant is proposing to supply goods and services relating to designing, erection, commissioning and installation of SPGS at customer's site. 6.2 Thus, in order to be covered under SI no. 234 of Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no.24/2018-Central Tax (Rate) dated 31.12.201....
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.... the electricity from sunlight and its storage. 6.6 Solar Panel generates electrical energy using Sunlight, Solar PCU is used to convert the energy generated in DC form to AC form, and Battery Bank is used for storage of such electrical energy. MCB/MCCBs/HT Switchgear are used as circuit breakers after the inverter for protection of plant and for operation and maintenance activities. Energy meter is essential part of solar plant for energy measurement and billing purpose. LT panel is required to connect & combine the inverter output power. Further, the energy meter and MCB/MCCB's are installed in LT panel. Transformer is used to step up the voltage at the higher level in order to minimize the cable losses. Outgoing Switchyard which is used at Ground Mounted Solar Power Plant consists of the power transformer, its protective relays and switchgears, control and relay panels. Switchyard the key portion which joins/integrates the solar power plant to the utility gird. In that plant Utility Grid is also used, wherein, the energy generated from the solar power plant is transmitted to the consumers through the transmission line network commonly known as utility grid. Transmission l....
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....gning, erection, commissioning and installation is covered under SI No. 234. 6.13 If the goods supplied by the Applicant are covered under SI No. 234, then the services of designing, erection, commissioning and installation of the above goods will be covered under SI No. 38 inserted in Notification No. 11/2017- Central Tax (Rate) dated 28.6.2017 vide Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018. Explanation to both the entries, 243 and 38, clearly state that both the entries are to read together. 6.14 In the light of the above discussion the rate of rate shall be as follows: i. The supply of SPGS along with other goods will be taxable @ 5%. The value for such supply shall be deemed to be 70% of the gross consideration charged for all such supplies. ii. The supply of service of designing, erection, commissioning and installation for the above goods, shall be taxable @ 18%. The value for such supply shall be deemed to be 30% of the gross consideration charged for all such supplies. 7. Discussion and findings: 7.1 The applicant Hero Solar Energy Pvt. Ltd. is engaged in the business of setting up of Solar Power Generating System (SPGS) on t....
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....vance Ruling on 02.11.2018. 7.4 In the meantime, the Government of India came out with Notification No. 24/2018 (CT Rate) dated 31.12.2018, vide which the following explanation was inserted against entry in column (3) of Serial no. 234 of Notification No. 01/2017: "If the good specified in this entry are supplied, by a supplier, along with supplies of other goods and service, one of which being a taxable service specified in the entry at Serial No. 38 of the table mentioned in the Notification No. 11/2017- Central Tax (Rate), dated 28th June, 2017, the value of supply of goods for the purposes of this entry shall be deemed as seventy percent of the gross consideration charged for all such supplies, and the remaining thirty percent of the gross consideration charged shall be deemed as value of the said taxable service." 7.5 Further, vide Notification No. 27/2018 (CT Rate) dated 31.12.2018, Serial No. 38 was inserted which read:- (1) (2) (3) (4) (5) 38 9954 or 9983 or 9987 "Service by way of construction or engineering or installation or other technical services, provided in relation of setting up of following, (a) Bio-gas plant ....