TaxTMI 
TaxTMI 
2021 (4) TMI 617
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....mited, etc. and expected future similar orders, for supply of "Solar HT XLPE & LT XLPE Cables", for use as Parts in the manufacture of Solar Power Generating System; that though these cables are universally classified under Tariff Heading No.8544, they are used as integral parts in Solar Power Generating System without which Solar Power Generating System cannot function and cannot be treated as complete in all respect and at the same time the same is capable of being separated for repairs and replacement; that, therefore, all the Solar Power Project authorities are claiming that these cables will attract GST @5% in terms of Sr.No.234 of Schedule-I of the Notification No.01/2017-Integrated Tax(Rate) dated 28.06.2017; that amendment to original Purchase Order bearing No.4500293305 dated 25.12.2018 (amended as on 16.02.2019) related to the above Project Authorities, confirming the applicability of concessional rate of GST @5% is submitted; that while placing the above orders, the indenting project authority is claiming that applicable GST will be @5% on these cables, since the same is forming an integral part in the manufacture of Solar Power Generating System and hence Sr.No.234 of S....
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.... 85 or 94', if the same is used as Parts for the manufacture of Solar Power Generating System in terms of Notification No.1/2017-I.T.(Rate) dated 28.06.2017; that the said Notification No.1/2017-IT (Rate), do not impose any conditions, unlike pre-GST Notification (referred above), for claiming the benefit of concessional rate of GST Rate; that the Authority has issued a similar certificate for the use of goods supplied by the applicant for the intended purpose by the Solar Power Project Authority which clearly substantiates that the Cables supplied by them will be used as Parts in the manufacture of Solar Power Generating Projects. Entry at Sr.No.234 of Schedule-I of above Notification is reproduced as under: Schedule I - 5% Chapter /Heading /Sub-heading /Tariff item Description of Goods (2) (3) 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 ....
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.... said Notification; that they are of the view that since the goods i.e. HT XLPE & LT XLPE Cables, manufactured and designed by them for use as parts in the manufacture by the Solar Power projects, the benefit of concessional rate of GST @ 5% is clearly admissible to them; that they have verified from Purchase Order placed on them which is attached with their original Application for Advance Ruling that the goods will be used only in Solar Power Generating System and also obtained end user certificate as per Annexure-IV submitted by them. The applicant has stated that they rely on the following Advance Rulings to support their contention: (i) Order No. 07/2018-19 dated 28.08.2018 passed by the Authority of Advance Ruling-Uttarakhand, in the case of M/s Eapro Global limited, Roorkee. (ii) Order No. 15/2018-19 dated 23.01.2019 passed by AAR, Uttarakhand, in the case of M/s. Premier Solar Systems(P) ltd., Dehradun. (iii) Order No. Giriraj Renewables (P) ltd. - AAAR(146) AAR Karnataka (215). 5. They have concluded their submission by requesting that it be held that supply of "HT XLPE & LT XLPE Cables" to Solar Power Generating Projects for use as parts for ....
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....they are trying to get a copy of the said tender at the earliest and the same shall be submitted as and when received; that in the meanwhile these documents may be taken on record, which are in the nature of evidence to prove it beyond doubt that the PO was accepted and that such PO was placed for DC cables to be used in Solar Power projects. DISCUSSION & FINDINGS: 8. We have considered the submissions made by the applicant in their application for advance ruling, submissions dated 22.12.2020, additional submission of the applicant(received in this office on 29.12.2020) as well as the arguments/discussions made by their representative Shri Amal Dave, Advocate at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 9. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act. However, sin....
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....pecified in Schedule I, (ii) 6 per cent. in respect of goods specified in Schedule II, (iii) 9 per cent. in respect of goods specified in Schedule III, (iv) 14 per cent. in respect of goods specified in Schedule IV, (v) 1.5 per cent. in respect of goods specified in Schedule V, and (vi) 0.125 per cent. in respect of goods specified in Schedule VI Further, Explanation (iii) and (iv) of the said Notification reads, as under: (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 13. On going through the aforementioned notification, we find that there is an Entry No.234 which appears in Schedule-I of the said notification and reads as "Following renewable energy devices & parts for their man....
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....cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors" On going through the above, we are convinced that cables are indeed covered under the Sub-heading 8544 of Chapter-85 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975) as submitted by the applicant and therefore the first condition has been satisfied. 15. Now, the next issue to be dealt with is whether the XLPE cables manufactured by the applicant are being used as parts of Solar Power Generating System as submitted by the applicant. In order to find out whether the XLPE cables manufactured and supplied by the applicant indeed form integral parts of the Solar Power Generating System, we need to first know what a Solar Power Generating System is. As known in common parlance, Solar power generating systems generally is a system which absorbs sunlight and converts it into electricity which can be put to further use. A Solar Energy System is a renewable energy generating system that collects photovoltaic energy from the sun and converts it into usable electricity. A solar energy generating system relies on four main components: solar panels,....
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....t the output from DC to AC, as well as Panel mounting structure, Conduits and other electrical accessories to set up a working system. It may also use a solar tracking system to improve the system's overall performance and include an integrated battery solution, as prices for storage devices are expected to decline. Strictly speaking, a solar array only encompasses the ensemble of solar panels, the visible part of the PV system, and does not include all the other hardware, often summarized as balance of system (BOS). The major components of a typical Solar project will look as below: Various Types of Cables used in Solar Power Generating system As can be observed, at each and every stage, suitable cables are required, the cables used are: a) Solar DC String Cables to interconnect the Solar Panels and are manufactured as per EN-50618:2014 b) DC application cables for use from Combiner Box to Inverter are XLPE Insulated and manufactured as per IS:7098(Part-I) c) AC application cables for use from Inverter to step up transformer are XLPE Insulated and manufactured as per IS:7098(Part-I) d) Medium Voltage 11-33 KV XLPE Cables us....
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....sition (SCADA) and remote monitoring application. It monitors the overall system performance. CABLES: An Integral Part of the Solar Power Generating System As can be seen above, all these cables are an integral part of the Solar Power Generating System. Without these interconnecting cables, the components like Solar Panels and others cannot generate usable power." 16. We have gone through the aforementioned details of the Solar Power Generating System, the uses of cables therein as well as the technical write-up submitted by the applicant. We find that XLPE cables do form an integral part of the Solar Power Generating System as they connect the transformer to the transmission line or substation or are used from Inverters to step up Transformer as mentioned in the write-up. However, in order to confirm as to whether the XLPE cables manufactured and supplied by the applicant in the instant case are covered under Sr.No.234 of Schedule-I of Notification No.01/2017-Integrated Tax(Rate) dated 28.06.2017 or otherwise, it is necessary to confirm that the XLPE cables are indeed used as parts of Solar Power Generating System or otherwise in the instant case. For this pur....
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.... them are used in the Waste to Energy Plant' (WTEP) or otherwise, he needs to satisfy himself with the requisite document from the buyer such as supply contracts/order for WTEP from the concerned authorities before supplying goods claiming concession under Entry 234. Comparing the said clarification with the issue in hand, we find the applicant has not provided/submitted copies of the supply contracts or orders for the Solar Power Generating System from the buyer regarding supply of parts for the same as required in the above circular. Further, they have not submitted the copy of the original purchase order bearing No. 4500293305 dated 25.12.2018 issued to them by their buyer M/s.Adani Green Energy ltd., Rajasthan but have submitted only a copy of the amendment of the said purchase order issued on 16.02.2019. Further, we would like to emphasise here that purchase orders do not have any binding on both the parties as it is not a legal document in case any dispute arises and matter goes to the court of law. However, since the applicant has submitted only the amendment to the aforementioned Purchase order, with regard to the transactions in the instant case, we need to go through the ....
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....cts mentioned above and in the event of non-submission of the aforementioned documents by the applicant, it would not be possible for us to take a decision in the matter since the issue in hand covers supply of goods such as cables for the Solar Power Generating System and after going through the subject portion mentioned in the amendment of the original purchase order dated 25.12.2018, there appears to be a distinct possibility of supply of services being involved in the instant case, along with the supply of goods and in such an eventuality, the nature of the transaction as well as the aspect of GST liability thereon are likely to be completely different. There is also every likelihood of such supply of goods i.e. XLPE cables for Solar Power Generating System being accompanied by services such as assembly, installation of the cables with all fittings and accessories etc. Even otherwise, as can be seen from the details mentioned in the subject portion of the amendment to the aforementioned purchase order dated 25.12.2018 that the subject portion itself mentions about various services such as Design, engineering, manufacture, assembly, inspection and testing at works, supply, packi....
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....devices (f) Ocean waves/tidal waves energy devices/plants Explanation :- This entry shall be read in conjunction with Serial Number 234 of Schedule I of the Notification No. 1/2017-Integrated Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i), dated 28th June, 2017 vide GSR Number 666(E), dated 28th June, 2017. 18 The explanation to the entry provides that the changes have to be read in conjunction with Serial Number 234 of Schedule-I of Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017. 17.3 A conjoint reading of the two aforementioned notifications requires that after 1-1-2019 the supply is taxable on the values worked out separately for goods and services under both Entry No.38 of Notification No.8/2017-Integrated Tax (Rate), dated 28-6-2017 (as amended by Notification No. 28/2018-Integrated Tax (Rate), dated 31-12-2018) and Entry No. 234 of Schedule I of Notification No. 1/2017-Integrated Tax (Rate), dated 28-6-2017 (as amended by Notification No.25/2018-Integrated Tax (Rate), dated 31-12-2018) and the values must be as per the explanation provided therein. The very purpose of insertion of deeme....