TaxTMI 
TaxTMI 
2021 (4) TMI 617
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....rders, 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 Schedule-I to the above notification will ....
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....r 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 waves energy devices/plants (h) Photo voltaic cells, whether or not assembled in modules or made up into....
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....signed 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 their manufacture will be covered by Entry Sr.No.234 of the Schedule-I to Notification No.1/2017-Integrated Tax (Rate), and will attract con....
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....ments 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, since the present application submitted by the applicant deals with inter-state supply of goods, we will be required to make references to the IGST Act, 2017 as....
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....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 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 ....
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....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, inverter, controller and batteries and details are as under : (i) Solar panels : The main part of a solar power generating system is the solar panel. Solar panels contain solar cells. Solar cells, sometimes called photovoltaic cells, convert the energy of the sun into electricity. (ii) Inverters : The ....
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.... 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 used for Transformer to the grid / substation e) Communication Cables RS 485 and Fiber Optic Cables Solar DC String Cables: Solar DC String Cables are used to interconnect the Solar Panels, generally of size 4 /6/10 sqmm. These cables are manufactured as per EN-50618:2014 and are suitable for its use in harsh environment openly exposed to ultraviolet sunlight for entire day and tested, cer....
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.... 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 purpose, we find it necessary to refer to Circular No.80/54/2018-GST dated 31.12.2018 issued by the CBIC/Board containing clarification regarding GST rates and classification of various goods. In this regard, while discussing the issue regarding Waste to Energy Plant and the scope of entry No.234 of Schedule-I of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017, the Board clarified as under: "11. Applicability of GST on supply of Waste to Energy Plant: 11.1. Representations....
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....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 same thoroughly. After going through the same, we find that the subject portion of the amendment to the aforementioned purchase order reads as under: "Amendment-01 to Purchase Order (PO) No.4500293305 dated 25.12.2018 for -Design, engineering, manufacture, assembly, inspection and testing at works, supply, packing and forwarding, transportation and transit insurance on F.O.R. Site basis for HT cable Package for 200 MW MSEDCL, Rajasthan, NSM Solar Project in Village: Rawra, Taluka: Bap, District: Jodhpur, State: Rajasthan, India." 17.1 On going through the above, we ....
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....ell 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, packing and forwarding, transportation and transit insurance on F.O.R. site basis, alongwith the supply of XLPE cables. 17.2 In this context, we would like to refer to the amendment made to Entry No.234 of Schedule-I of Notification No. 01/2017-Integrated Tax (Rate) dated 28.06.2017 vide Notification No.25/2018-Integrated tax(Rate) dated 31.12.2018 wherein an explanation to Entry No.234 was inserted w.e.f. 01.01.2019. The amended Notification No. 01/2017-IT (Rate) dated 28.06.2017 reads as under: S. No. Chapter/ Heading/ Sub-heading/ Tariff item Description of Goods (1) (2) (....
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.... 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 deemed bifurcation of value of goods and service in the Entry No.38 of Notification No.08/2017-IT (Rate) dated 28.06.2017 was to remove the anomaly in cases where the supplier supplies the goods and services both for setting up of Solar Power Generating System. It therefore follows, that in similar circumstances involving supply of services along with supply of goods(classifiable under Sr.No.234 of Schedule-I of Notification No.01/2017-Integrated Tax(Rate) dated 28.06.2017(as amended from time to time)), out of the gross value of the supply, 70% shall be deemed to be on account of goods on which GST payable would be 5% whereas the remaining value of 30% sha....