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2022 (4) TMI 1136 - AAR - GSTClassification of goods - rate of GST - HSN Code - solar pump controller - to be classified under CTH 8504 or not - HELD THAT - As per Chapter Note 2 to Chapter 85, Heading 8501 to 8504 do not apply to goods described in Headings 8511, 8512, 8540, 8541 or 8542. On perusal of the Headings 8511, 8512, 8540, 8541 and 8542, it is clear that the product in hand do not fall under these Headings and the product being a Convertor, is likely covered under CTH 8504 above, more specifically under CTH 8504 40 90. It is further seen from the Explanatory notes, that the apparatus of this group are those used to convert electrical energy in order to adopt it for further use. In the present case, it is seen form the product overview that the applicant's product is designed and manufactured exclusively for pumps (ACIM/PMSM). Their product is an electronic controller connected between the solar submersible pump which is submerged into the bore well and the solar panels. It takes power from the solar panel which is a DC power and drives the ACIM/PMSM pumps. The built in Maximum power point tracking (MPPT) algorithm optimizes the performance of the pump by utilizing the maximum power from the solar panel and also regulates the voltage and current coming from the solar panel - Thus, it is evident from the facts and the explanatory notes to CTH 8504 that the applicant's product merits classification under Chapter 85 in CTH 8504 and more specifically under CTH 8504 40 90- as Static converters(others); in as much as the Explanatory notes has specifically stated that incorporation of auxiliary circuits to regulate the voltage of the emerging current does not affect their classification in this group. Rate of Tax - HELD THAT - In the case at hand, it is seen that the product solar pump convertor drive is to be placed between the solar panel and the submersible pump and the power from the solar panels are converted by this device when connected between the panels and pump; maximise the power availability to the Load, i.e., the submersible pumps. Further, the drive provides for remote monitoring support and is compatible and may be upgraded as an USPC Universal Solar Pump Controller - In the instant case, the product has MPPT, IP(65) protection, dry run protection and such other features as stipulated in the above specifications, which shows that the product is a stand-alone device and when connected to solar panel converts the solar power into AC, optimizes the power and delivers it to the load, i.e., the submersible pump making such pump as solar power driven pump. The applicable rate of tax on the above said product, when supplied for integration with solar panels and AC submersible pumps, as discussed at para 8 above, as effective from 01.10.2021, is CGST @ 6% as per Si. No. 201 A of Schedule II of Notification 01/2017-CT (Rate) dated 28.06.2017 as amended vide Notification No.8/2021- Central Tax (Rate) dated 30.09.2021 and SGST @ 6% as per Sl. No 201 A of Schedule-II of Notification No. II (2)/ CTR/532(d-4) (G.O. Ms. No 62, CTR dated 29.06.2017) as amended vide Notification G.O.Ms. No 121(TN) dated 04.10.2021 w.e.f. 01.10.2021.
Issues Involved:
1. Tax rate for HSN code 85044090 2. HSN code for solar pump controller Detailed Analysis: Issue 1: Tax Rate for HSN Code 85044090 The applicant, a manufacturer of a Solar Pump Controller, sought clarification on the applicable GST rate for HSN code 85044090. The applicant initially assessed the GST rate at 18% but faced customer concerns suggesting a 5% rate. The Authority examined the classification and tax rate applicable to the product. The product, Versa Solar Pump Drive, designed for agricultural and other uses, converts solar power to drive submersible pumps. It includes features like Maximum Power Point Tracking (MPPT), remote monitoring, and compatibility with various motor types. The Authority reviewed the relevant Customs Tariff and Explanatory Notes, determining that the product falls under CTH 8504, specifically under CTH 85044090 as a static converter. This classification was based on the product’s function of converting electrical energy for further use, incorporating auxiliary circuits for voltage regulation. The applicable GST rate was initially specified under Sl.No. 234 of Schedule I of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, which listed renewable energy devices at 5%. Effective 01.10.2021, this entry was omitted, and the applicable rate is now under Sl.No. 201A of Schedule II of the same notification, as amended by Notification No. 08/2021 dated 30.09.2021, specifying a 12% GST rate (6% CGST and 6% SGST). Issue 2: HSN Code for Solar Pump Controller The applicant sought the correct HSN code for their Solar Pump Controller. The Authority examined the product’s specifications and functions, concluding that it is a static converter. The product converts DC power from solar panels to AC power for submersible pumps, optimizing performance with MPPT and other features. The Authority determined that the product falls under CTH 8504, specifically under CTH 85044090. This classification aligns with the product’s function as a static converter, incorporating auxiliary circuits for voltage regulation, as described in the Explanatory Notes to HSN. Ruling: 1. The product "Versa Solar Pump Drive" is classifiable under CTH 8504, more precisely under CTH 85044090. 2. The applicable rate of tax on the product, when supplied for integration with solar panels and AC submersible pumps, effective from 01.10.2021, is CGST @ 6% and SGST @ 6%, as per Sl. No. 201A of Schedule II of Notification No. 01/2017-CT (Rate) dated 28.06.2017, as amended by Notification No. 08/2021-Central Tax (Rate) dated 30.09.2021.
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