2019 (10) TMI 1094 - AAR - GST

Classification of supply - rate of tax - local sale of used second hand Wind Turbine Generator (WTG) / (Wind Mill) with accessories - N/N. 10/2017 - Central Tax (Rate) dated 28.06.2017 - HELD THAT - This Notification is issued under Section 9(4) of the CGST act, 2017 and applies in situations where the supplier is an unregistered person and the registered recipient is required to discharge tax on reverse charge basis. In the instant case the applicant is the supplier and is a registered person. Therefore this Notification is not relevant to the transaction in hand. Wind Mills and accessories are proposed to be sold for a single price and hence it amounts to a composite supply with the supply of wind mills being the principal supply. Wind Mills are covered under entry 234 of Schedule I of Notification No. 1/2017 - Central Tax (Rate) dated 28.06.2017 and the supply of the same is liable to CGST at the rate of 2.5%. Similarly, the supply of wind mills is taxable at 2.5% under the Karnataka GST Act, 2017.

Summary

Issues:
- Applicability of GST on local sale of used second hand Wind Turbine Generator (WTG) with accessories.

Analysis:
1. The applicant, a Partnership firm, sought an advance ruling regarding the GST applicability on the local sale of used second hand Wind Turbine Generator (WTG) with accessories.

2. The applicant, engaged in generating electricity from Wind Mills, intended to sell 42 mills without dismantling them, limiting their role to the sale only.

3. The applicant referred to Notification No. 10/2017 - Central Tax (Rate) to support their claim of GST exemption on the transaction.

4. During the personal hearing, the authorized representative reiterated the application's facts and submitted relevant documents.

5. The Authority considered the submissions, facts, and relevant provisions of the CGST Act and the KGST Act.

6. It was noted that the applicant's primary activity was electricity generation, not dealing in second hand goods, as per the agreement with the buyer.

7. The Authority analyzed Rule 32(5) of the CGST Rules, 2017 and found it inapplicable to the applicant's transaction as they were not buying and selling second hand goods.

8. The Notification No. 10/2017 - Central Tax (Rate) was also deemed irrelevant as it pertained to unregistered suppliers, unlike the applicant who was a registered person.

9. The Authority classified the sale of Wind Mills as a composite supply with the principal supply being Wind Mills, taxable at 2.5% under both CGST Act, 2017 and KGST Act, 2017.

10. Consequently, the ruling declared that the supply of used Wind Turbine Generator (WTG) or Wind Mill with accessories is taxable at 2.5% under both CGST Act, 2017 and KGST Act, 2017.

This detailed analysis of the judgment thoroughly covers the issues involved and the Authority's decision based on the relevant legal provisions and facts presented by the applicant.