2021 (12) TMI 114 - AAR - GST

Classification of goods - Rate of Tax - Waste to Energy plants (WTEP) i.e. Renewable Energy Boilers - HELD THAT - As Per technical literature provided by the applicant, the Fuel varieties in the said 5 boilers are Argo waste/ Industrial waste/ / plastic waste/ municipal waste/ bricket of biomass - Sample Indemnity cum Undertaking by Buyers of these Boilers reads that that the buyers use Waste as fuel in these Boilers. The applicant s contention is agreed upon that heat energy produced from these fuels biomass/ waste used in the boilers categorise the said Boilers under Waste to Energy Devices . The said 5 Boilers are leviable to i. 5% GST CGST 2.5% SGST 2.5% up to 30-9-21. ii. 12% GST with effect from 1-10-21.

Summary

Issues:
Rate of Tax on Waste to Energy plants (WTEP) i.e. Renewable Energy Boilers manufactured by the applicant.

Analysis:
The applicant, engaged in manufacturing and supplying Agro Waste Boilers, sought clarification on the GST rate for Waste to Energy plants. The applicant highlighted the Circular No 80/54/2018-GST issued by CBIC, specifying the applicable GST rate on renewable energy devices. The applicant collects an Indemnity Bond and declaration from customers to confirm the use of Agro Waste as fuel in the Boilers supplied. The applicant submitted technical specifications and fuel details for various boilers, emphasizing the use of biomass fuels and excluding coal, lignite, and pet coke. The applicant clarified that Hybrid Boilers consist of both Fire tubes and Water Tubes, with distinct combustion equipment and fuel feeding systems compared to conventional coal fuel-based boilers.

The Authority for Advance Ruling examined the facts presented by the applicant, confirming the use of Agro waste fuels in the 5 Boilers and excluding coal, lignite, and pet coke as fuels. The Authority agreed with the applicant's classification of the Boilers under 'Waste to Energy Devices' based on the heat energy produced from biomass/waste fuels. The Boilers were classified under HSN 8402, specifically 84021990, as steam generating boilers. Referring to Notification No. 1/2017-CT (R) and Notification No. 8/2021-CT (R), the Authority ruled that the 5 Boilers are subject to 5% GST until 30-9-21 and 12% GST from 1-10-21 onwards.

The ruling provided clarity on the applicable GST rates for Waste to Energy plants manufactured by the applicant, emphasizing the use of renewable energy sources and the exclusion of conventional fuels like coal, lignite, and pet coke. The technical specifications and fuel details submitted by the applicant supported the classification of the Boilers under 'Waste to Energy Devices,' leading to the determination of the specific GST rates based on the notifications mentioned. The ruling ensures consistency in tax treatment for renewable energy Boilers and aligns with the regulatory framework governing renewable energy devices.