2019 (2) TMI 1003 - AAR - GST

Classification of supply - applicant is supplying WTE PLANT BOILER'S FLUE GAS CLEANING SYSTEM (to the customer's address at Andhra Pradesh) - whether classified under HSN Code 84051090? - rate of GST - Held that - The impugned product is classifiable under heading 8421 of the first schedule to the Customs Tariff Act, 1975, being filtering or purifying machinery and apparatus for gases. Rate of GST - Held that - From the working of impugned device, it can be inferred that this device can also be used as pollution control equipment in other power plants as well, which may be based on other fuel, such as fossil fuel, etc. Thus, this impugned item cannot be called as part of waste to energy plants/devices in generalized manner, as it would depend upon in its actual use - it emerges that the impugned item supplied by the applicant is pollution control device classifiable under chapter heading 8421 of the first schedule to the Customs Tariff Act, 1975 and when the same is supplied for being used in waste to energy plants/devices the same would be covered by Sr. No. 234 of schedule I of Notification No.01/2017-Central Tax (Rate) dt.28.06.2017 Notification No.35/ST-2 dt.30.06.2017, chargeable to CGST @ 2.5% and SGST @ 2.5%.

Summary

Issues: Classification and applicable rate of tax under GST on WTE plant boiler's flue gas cleaning system.

Classification Issue:
The applicant sought clarification on the HSN Code and applicable tax rate for the WTE plant boiler's flue gas cleaning system. The applicant argued that the system falls under Chapter 84 and should be taxed at 5% under Sr. No. 234 of the tax schedule. They provided supporting documents showing exemption of similar equipment from indirect taxes in the past. The applicant emphasized that the purchase order specified the system for a waste to energy project, justifying its classification under HSN Code 84051090 at 5% IGST.

Rate of Tax Issue:
The Authority analyzed the functioning of the waste to energy plant, highlighting the importance of pollution control devices like the flue gas cleaning system. The system was considered a pollution control device under chapter heading 8421 of the Customs Tariff Act, essential for waste to energy plants' operation. However, the ruling clarified that the classification as a part of "waste to energy plants/devices" would depend on its actual use. Consequently, the system was classified under chapter heading 8421 and covered by Sr. No. 234 of the notification, attracting CGST and SGST at 2.5%.

Judgment:
The Authority ruled that the pollution control device supplied by the applicant for use in waste to energy plants/devices is classifiable under chapter heading 8421 and falls under Sr. No. 234 of the notification, subject to CGST at 2.5% and SGST at 2.5%. The decision was made based on the specific use of the device in waste to energy projects, emphasizing the importance of pollution control in such plants. The ruling was ordered accordingly and to be communicated to the applicant.