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TMI Blog2018 (11) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... rts for the purpose of Entry 234 of the Notification No. 1/2017-IGST (Rate), can only be treated as inputs and do not qualify as parts for the manufacture of Photovoltaic/ solar cells. Ruling:- The items used for manufacture of solar cells as listed in Table A, procured by the applicant do not qualify to be termed as 'Parts for the manufacture of Photovoltaic/ Solar cells' for the purpose of Entry 234 of Schedule-I of Notification No. 1/2017-lntegrated Tax (Rate), dated 28-6-2017. - Order No. EXN-JCSTE/ARA-PLP/2018-19-01-04 - - - Dated:- 25-7-2018 - Shri Hitesh Sharma, Member (SGST) And Dr. Ravindra Kumar, Member (CGST) ORDER Proceedings: Present application has been filed u/s 97 of the Central Goods Services Act, 2017 similar provisions under Himachal Pradesh Goods Services Act, 2017 (hereinafter referred to as CGST Act, 2017 HPGST Act, 2017). The Applicant M/s. Jupiter Solar Power Ltd. Baddi is a registered taxpayer is engaged in manufacture of solar photovoltaic cells in its factory located at Baddi, Distt. Solan (H.P.). 2 . For admission hearing u/s 98 of the CGST Act, 2017/HPGST Act, 2017, notice was issued to the applicant on dated 10-7-2017 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 ) 2804 69 00 5. Phosphorus oxychloride (POC1 3 ) 2812 12 00 6. High Purity Nitrogen(N 2 ) 2804 30 00 7. High purity Ammonia 2814 10 00 8. Nitric Acid (HNO 3 ) 2808 00 10 9. Printing screens for solar cells 8443 99 90 10. High purity oxygen 2804 40 90 11. Hydrochloric Acid(HCL) 2806 10 00 12. Potassium Hydroxide(KOH) 2815 20 00 13. Polycrystalline silicon Texturing Additive 3402 19 00 (b) All the above stated items when procured for their independent use, attract different rates of IGST. (c) Most important item is Silicon Wafers on which as per Entry No. 79 ot Schedule-II of the Notification No. 1/2017-Integrated (Rate), dated 28-6-2017 the rate of IGST is 12%. (d) However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be treated as parts in terms of Entry 234 of schedule-I of the said notification. (d) Further, accepting these items as parts is revenue neutral exercise because 100% credit is admissible to solar cell manufacturers on account of inverted tax structure. The manufacturers are eligible for refund of excess credit. Charging higher IGST on parts leads to blockage of working capital. (e) Therefore the applicant is of the view that the products mentioned in table A should be ruled as pail for the manufacture of Photovoltaic cells therefore shall be charged 5% of IGST on procurement. 6. Observation (1) Table A specifies various items which are procured for the manufacturing of Photovoltaic/ Solar cells. These items are used in the manufacturing process as under :- (a) During the process of manufacturing of solar cells, the Silicon wafers are cleaned with various chemicals (like Hydrofluoric Acid (HF)), Nitric Acid (HNO 3 ), Hydrochloric Acid (HCL), Potassium Hydroxide (KOH) Polycrystalline (Silicon Texturing Additive) through the process of texturization. (b) In the second step, the cleaned Silicon Wafers are treated through diffusion process for creating p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CHEMICAL ELEMENTS DOPED FOR USE IN ELECTRONICS, IN THE FORM OF DISCS, WAFERS OR SIMILAR FORMS; CHEMICAL COMPOUNDS DOPED FOR USE IN ELECTRONICS 3818 00 - Chemical elements doped for use in electronics, in the form of discs, wafers or similar forms; chemical compounds doped for use in electronics: 3818 00 10 - Undiffused silicon wafers (2.2) Further, Rule 3(a) of the general rules of interpretation (The Customs Tariff Act, 1975) states that heading which provides the most specific description shall be preferred to a heading providing a more general description. Here, silicon wafer falls 'specifically' in chapter Heading 3818, which is most specific entry whereas solar photovoltaic cell falls in chapter Heading 8541; moreover, machines and apparatus for the manufacture of wafers falls under chapter Heading 8486. In this case silicon wafer falls specifically in chapter heading 3818 that is why duty rate thereof will be applicable. (2.3) Furthermore, along with some other inputs/ items, silicon wafers, as specified at Sr. No. 1 of Tabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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