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2019 (4) TMI 383 - AAAR - GSTClassification of goods - Rate of GST - turbine generator set to be supplied by the applicant to the buyer for use in waste-to-energy project - whether covered under St.No.234 of Schedule I of N/N. 1/2017-IGST(Rate) dated 28.06.2017 as Renewable energy devices and parts for the manufacture of waste to energy plants/devices ? - Held that - In the instant case, the impugned item is a Turbine Generator Set. The Appellant has secured a contract from Jindal Urban Waste Management (Guntur) Ltd (JUWML) for the complete design, engineering, manufacture and supply of Turbine generator Set. JUWML(Guntur) is a Company formed by the promoter M/s. JITF Urban Infrastructure Ltd to execute waste to energy project in Guntur The waste to energy project will be integrated facility for processing Municipal Solid Waste (MSW) delivered by Guntur Municipal Corporation. A waste to energy plant converts municipal and industrial solid waste by burning waste at very high temperatures and using the heat to generate steam, The steam so generated is used to drive the turbine that creates electricity. The waste to energy plant consists of many equipments/devices starting from the stage where the MSW is dumped in a pit, segregated and incarnated, to the final stage of generation of electricity which is uploaded to the grid. The turbine generator set is one such equipment/device in the entire process chain of a waste to energy plant - The Turbine Generator set by itself does not qualify as a waste to energy plant. The turbine generator set together with the boilers, air cooled condensers and a host of other parts, constitute a waste to energy plant. The Turbine Generator Set is an integral part in the process of converting waste to energy and hence the supply of Turbine Generator set for a waste to energy plant project will get covered in the description of item at .(e) in Col 3 of SI. No. 234 of Schedule I It is emphasized that a turbine per se will not be eligible for the concessional rate of 5% GST under Sl.No. 234 of Schedule I. It is only when the turbine is supplied for the setting up of the waste to energy plant that the same will be covered under the said Sl.No. 234. The CBIC in its Circular No 80/54/2018-GST dated 31.12.2018, at Para 11, has clarified that the concession of 5% rate as per entry SI No 234 of Notification No 01/2017 would be available only to such machinery, equipment, etc which fall under Chapter 84, 85 and 94 and used in the initial setting up of renewable energy plants and devices including Waste to Energy Plants. The supplier must satisfy himself that the goods falling under Chapter 84, 85 and 94, say a turbine or a boiler, are required in a waste to energy plant and would be used in a waste to energy plant - In the Appellants case, as can be seen from the terms of the contract and the project report, the Turbine Generator set is to be supplied to Jindal Urban Waste Management (Guntur) Ltd, a company formed to execute the waste to energy project awarded by the Government of Andhra Pradesh - thus, the said turbine generator set is eligible for the levy of 5% GST in terms of Sl.No 234 of Schedule I of Notification No 01/2017 IT (R) dated 28406.2017.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Classification of Turbine Generator Set under GST. 3. Applicability of 5% GST rate under Sl. No. 234 of Schedule I of Notification No. 01/2017-Integrated Tax (Rate) dated 28.06.2017. Condonation of Delay: The appellant sought condonation for a 13-day delay in filing the appeal, attributing it to non-receipt of necessary information and awaiting clarification from the CBIC. The appellate authority condoned the delay, finding the explanation satisfactory. Classification of Turbine Generator Set: The appellant manufactures and supplies steam turbines and sought a ruling on whether their turbine generator set for waste-to-energy projects qualifies under Sl. No. 234 of Schedule I of Notification No. 01/2017-Integrated Tax (Rate), attracting a 5% GST rate. The appellant argued that the turbine generator set falls under Chapter 84 of the Customs Tariff Act, 1975, and should be considered a part of waste-to-energy plants/devices. Applicability of 5% GST Rate: The appellant contended that their turbine generator set is integral to waste-to-energy plants, which convert municipal solid waste into electricity. They cited previous rulings where similar equipment used in waste-to-energy projects was granted the 5% GST rate. The appellant also referenced Circular No. 80/54/2018-GST, which clarifies that machinery used in the initial setup of renewable energy plants, including waste-to-energy plants, qualifies for the concessional rate. Discussion and Findings: The appellate authority examined the records and submissions, emphasizing that the turbine generator set is a crucial component in converting waste to energy. The authority disagreed with the AAR's interpretation that only devices directly converting waste to energy qualify for the 5% rate. The turbine generator set, being part of the waste-to-energy plant, falls under the description in Sl. No. 234 of Schedule I of Notification No. 01/2017. The authority also confirmed that the turbine generator set, classified under Chapter 84 of the Customs Tariff Act, 1975, meets the criteria for the concessional GST rate. The CBIC Circular No. 80/54/2018-GST supports this interpretation, stating that machinery used in setting up renewable energy plants, including waste-to-energy plants, qualifies for the 5% rate. Conclusion: The appellate authority set aside the AAR's ruling and held that the turbine generator set supplied by the appellant for use in waste-to-energy projects is covered under Sl. No. 234 of Schedule I of Notification No. 01/2017-Integrated Tax (Rate), attracting a 5% GST levy. The appeal was disposed of accordingly.
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