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TMI Blog2018 (6) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... ate) dated 29 June 2017. Supply Contract - supply of ‘solar power generating system - the assembly, erection, and commissioning of the solar power plant is undertaken by the Applicant under a separate contract - Held that:- It depends upon the terms and conditions of the agreements as to whether the split of contract is an artificial and colourable device to avoid the legitimate tax or the requirement of the contractee demands separation of contract for better execution. In case the contract is an artificial split, the Clarification for Issue 2 (two) is applicable. In other case the rate of tax applicable for the supply of goods subject to condition of eligibility of being “device and parts” of the solar power generating system attracts 5% rate of tax as per Entry 234 of Schedule I of Notification No 1/2017 -Central tax (Rate), dated 28th June, 2017. And the supply of service attracts at the rate specified thereon in Notification No. 11/2017 -Central tax (Rate). Supply Contract - the assembly, erection, and ‘commissioning of the solar power plant is undertaken by a third party contractor - Held that:- In this scenario, the goods are supplied by one contractor, and the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is engaged in erection and supply of solar power generating system by making an agreement with his customers, has filed an application on 09,h February 2018. Vide acknowledgement number VPG736416, for seeking advance ruling for the tax rates applicable to the supplies made by him. On scrutiny of the application, it is noticed that the applicant is an unregistered person, he paid ₹ 10,000/-( 5000/- against fee under CGST and ₹ 5000/- against fee under SGST) vide CPIN Number 18013700040367, dated; 12-01-2018, and found the payment paid by the applicant is genuine as per common portal. As the applicant is an unregistered person, the application is not forwarded to any jurisdictional authority. To admit and to pronounce advance ruling on this application, this authority feels it is necessary to hear the applicant. Accordingly a personal hearing fixed on 04th April 2018, requested the applicant to attend with all relevant data. The applicant attended himself before this authority on 04th April, 2018 and made oral submissions on the issue, where advance ruling sought by him. On perusal of application, oral submissions made by the applicant, and read with the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17? Issue No.6 If the Clarification to Issue No. 5 is negative, what would be nature of supply i.e. composite supply or mixed supply? Issue No.7 Whether contract for assembly, erection, and commissioning of the plant undertaken by the Applicant under a separate contract would be a service contract liable to be taxed under Service heading 9954? Issue No.8 Whether the time of supply of power plant shall be determined under Section 31 (4) of the CGST Act/SGST Act read with Section 12(2) thereof? The Issues raised by the applicant is fit to pronounce advance ruling as they falls ambit of the Section 97(2) (a), (b) and (c), they are as given under (a) Classification of any goods or services or both; (b) Applicability of a notification issued under the provisions of this Act; (c) Determination of time and value of supply of goods or services or both Further, the applicant being a unregistered person, as per the declaration given by him in Form ARA-01, the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Basing on the above observations, the application is admitted , to pronounce advance ruling. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smission tower xv. Steel/plastic tubes pipes xvi. Pre-fabricated shelter xvii. SCADA Software d. Assembly erection i. Assembly erection ii. Supply of nut, bolts, fasteners and other miscellaneous materials e. Test Commissioning B. Equipment and components are delivered at project site and stored at the risk of the Applicant C. Ownership is transferred on successful commissioning of the plant D. Payment is as per milestone or monthly depending on the % of goods delivered at site E. Full payment is released on successful commissioning of the plant with stipulated power generation. F. Cost: a. In the case of Ground Base Solar Project: 20% Civil Erection 80% Supply. Roof Top Base Solar Project: 10% Civil Erection 90% Supply. For Issue number 2, the statement of facts are as follows... The scope of supply includes: a. Detailed designing of power project b. Procurement and supply at project site i. Solar photovoltaic modules/panels/array ii. Panel mounting structure iii. Solar tracker iv. Meteorological equipment v. Cables vi. Combiner box vii. Solar power conditioning unit viii. Inverter ix. Is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract + Erection contract. For Issue number 4, the statement of facts is as follows.... A. Scope of supply includes procurement and supply at project site i. Solar photovoltaic modules/panels/array ii. Panel mounting structure f iii. Solar tracker iv. Meteorological equipment v. Cables vi. Combiner box vii. Solar power conditioning unit viii. Inverter ix. Isolator x. Transformer xi. Switchbox xii. Conductor xiii. Battery xiv. Transmission tower xv. Steel/plastic tubes pipes xvi. SCADA Software B. Equipment and components are delivered at project site and risk is transferred to the customer C. Payment is as per milestone or monthly depending on the % of goods delivered at site. Full payment is released on successful commissioning of the plant with stipulated power generation. For Issue number 5, the statement of facts is as follows.... A. The scope of supply includes: a. Civil works i. leveling of ground ii. Wall boundary iii. internal roads iv. concrete foundations for mounting of panel mounting structures v. digging ditch for underground cabling vi. Concrete flooring for inverter/transformer/b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, rules, and notifications released from time to time, it is to note Entry number 234 of Schedule I ( which are taxable @ 2.5% ) of notification 01/2017 -Central Tax ( Rate), dated :28 h June 2017, is relevant to the Issues raised by apolicant. Entry 234 reads as... S. No. Chapter/Heading/ Sub-heading/Tariff item Description of Goods 234 84 or 85 Following renewable energy devices parts for their manufacture (a) Bio-gas plant (b) Solar power based devices (c) Solar power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants/devices (f) Solar lantern/solar lamp (g) Ocean waves/tidal waves energy devices/plants (II) Further, as per Explanation (iii) of the said Rate Notification, chapter heading shall mean chapter heading as specified under the First Schedule to the Customs Tariff Act, 1975.Chapter Heading 8501 includes Electric motors and generators. As per HSN Explanatory notes to heading 8501, the heading covers photovoltaic generators consisting of panels of photoce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er generating system under Entry 234 of Schedule I of the Notification No. 1/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1/2017- Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the Notification No. 1/2017- State Tax (Rate) dated 29 June 2017. Issue No.3 : Whether supply of solar power plant under Supply Contract is supply of solar power generating system under Entry 234 of Schedule I of the Notification No. 1/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1/2017-intergrated Tax (Rate), Entry 234 of Schedule I of the Notification 1/2017-Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the Notification No. 1/2017- State Tax (Rate) dated 29 June 2017 where the assembly, erraction, and commissioning of the solar power plant is undertaken by the Applicant under a separate contract? Ruling : The applicant sought a clarification on the liability of division of contract into two, one is supply of material and other one is erection, commission and there on., in this regard it is opined that, it depends upon the terms and conditions of the agreements as to whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds supplied are in conjuction with the services provided. Hence the rate of.: tax applicable in such transaction is liable at the rate as per the Entry 25 of 25 (Heading 9987) of Notification No. 11/2017 - Central Tax (Rate), dated : 28th June 2017, and attracts 18% rate of tax. Issue No.6 : If the Clarification to Issue No. 5 is negative, what would be nature of supply i.e. composite supply or mixed supply? Ruling : Ruling covered under clarification in issue number 5 (five) Issue No.7 : Whether contract for assembly, erection, and commissioning of the plant undertaken by the Applicant under a separate contract would be a service contract liable to be taxed under Service heading 9954? Ruling : The referred contract doesn t fall under the ambit of SAC 9954, but falls under the Entry 25 of 25 (Heading 9987) of Notification No.11/2017 -Central Tax (Rate), dated: 28th June 2017, and attracts 18% rate of tax. Issue No.8 Whether the time of supply of power plant shall be determined under Section 31 (4) of the CGST Act/SGST Act read with Section 12(2) thereof? Ruling: Yes Note: All the above rulings are valid, till the amendments have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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