9911796707
Advanced Search 
TMI Blog2018 (12) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... bine generator set to be supplied by the applicant to the buyer for use in waste-to-energy project is covered under Sl.No.234 of Schedule 1 of Notification 1/2017 - IGST (Rate) dated 28.06.2017 as "Renewable energy devices and parts for the manufacture of waste to plants/ devices", attracting 5% levy?" 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant states that he is in the business of manufacturing and supply of steam turbine solutions for Industrial Captive and Renewable Power. The applicant manufactures steam turbines upto 100 MW. It was demerged company from its parent company, Triveni Engineering and Industries Limited which holds 21.82% equity capital of the applicant company, in 2010, to emerge as a pure play turbine manufacturer. b. The applicant is a manufacturer of steam turbines for providing renewable power solutions specifically for Biomass, Sugar and Process co-generation, Waste-to-energy and District Heating. Apart from manufacturing, the applicant also provides aftermarket services to its customers as well as turbine users of other manufacturers supported by its customer care support, which operates through a network of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achate, further drying would take place in the storage pits. Manual and mechanical segregation of inert and hazardous material would be carried out before delivery of processes MSW feedstock to buffer storage pits for boiler feeding. The MSW would be used as fuel in the boiler for generating steam. In this process, the combustion present in the MSW is transformed to steam, The steam is made to expand in the turbine and the heat energy in the steam is converted into work. i.e., Kinetic energy. The rotating movement of the rotor is transferred to a generator through a coupling and power is produced. The very intention of the waste to energy project is to use MSW as an input and generate electrical energy' as the output. The steam turbine used in the MSW based power projects are specifically designed and tailor made for these projects. These turbines, once manufactured for Waste-to-energy' projects cannot be used for the normal power projects. 4. The applicant has filed the present application under section 97(1) of the Karnataka Goods and Services Tax Act, 2017 read with Rule 104(1) of the Karnataka Goods and Services Tax Rules, 2017. Section 97(2)(b) of the KGST Act provides that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant submits that Schedule I of the Notification No. 1/2017-Integrated Tax (Rate) provides the list of goods that attract IGST at the rate of 5%. Sl.No.234 of the Notification reads as below: 234 84 or 85 or 94 Following renewable energy devices and 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 devices / plants As per the entry, supplies of the specific renewable devices falling under Chapter heading 84, 85 or 94 and parts for their manufacture shall attract IGST at the rate of 5%. The renewable energy devices include "Waste to energy plants/ devices". The applicant submitted that the steam turbines and other goods supplied to the Waste-to-energy projects of the Government of Andhra Pradesh are to be used in the manufacture of the waste-to-energy' plant falls within the scope of entry 234 of Schedule I and therefore attracts IGST at the rate of 5%. 8. A waste-to-energy ("WTE") plant is a waste management facility that combusts wastes to produce e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Air System (Control from Local with status monitoring at DCS) * Fire Alarm and detection System (At Fire House and Repeat Alarm at CCR) * Cooling Water System (Operation, Control and Monitoring from DCS at CCR) * The I&C System will be configured to perform the following basic functions. (Emphasis supplied) 10. Schedule I of the Notification No. 1/2017 dated 28.06.2017 in Sl.No.234 includes renewable energy devices including waste to energy' plants and parts for their manufacture. From the above, the applicant submits that the Steam Turbine Generator sets that are to be supplied by the applicant to the waste to project forms a part of "waste-to-energy plant". Therefore, the applicant states that as per his understanding, the product "Steam Turbine Generator Sets" to be supplied by the applicant falls under Sl.No.234 of the Notification No. 01/2017 IGST (Rate) dated 28.06.2017 and consequently, is liable to IGST at the rate of 5%. 11. The applicant has brought to the notice of the Authority the judgement of the CESTAT in the case of Triveni Engineering and Industries Ltd. v. CCE, Bangalore reported in 2004 (172) ELT 353 (Tri.-Bang) = 2004 (6) TMI 128 - CESTAT, BANGALO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/devices". The text of the entry itself shows a clear departure from the exemption notification in the Central Excise regime inasmuch as the entry is not limited to 'waste conversion device producing energy' only but includes 'waste to energy plants / devices? in its entirety and also includes parts used for the manufacture of the waste to plants / devices. This entry does not specify that the device or parts are required to either 'produce' or 'convert' energy. Therefore, the present IGST Notification not only includes the boilers used in conversion of waste to 'heat energy" but also includes all the equipment falling under Chapter headings 84, 85 or 95 of the Customs Tariff Act, 1975 used in the entire process of converting waste to energy from the dumping pit to electricity generator. 13. Therefore, the applicant submits that the rationale of the Hon'ble CESTAT in the aforementioned case in the context of Central Excise Notification does not apply to interpret the present notification and therefore that the Turbine Generator set to be supplied by the applicant for use as a part of the Waste to Energy Plant falls under Sl.No.234 of Schedule I of Notification No. 1/ 2017-Integra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that extracts thermal energy from pressurized steam and uses it to do mechanical work on a rotating output shaft. Therefore a Turbine" is not a device that converts waste to. In fact in the instant case the waste is used to generate steam and the steam runs the turbine to generate electric power. Turbine itself does not work on waste but converts steam into energy. The conversion of waste into energy is done, only at the stage of combustion. The concessional rate of 5% of IGST is available to only such devices which convert waste into but not for the devices that converts energy from one form to the other form. 14.8 In view of the above, we are of the opinion that turbine is not a renewable energy device because the turbine at no stage acquires the nature of a device which converts waste to energy. The waste has already been converted into heat energy' through the process of the burning/combustion which in turn is utilized to convert water into steam and the said steam runs the turbine to generate electric power. The turbine runs on steam irrespective of whether the steam is obtained by combustion of waste or any other means. Therefore the fact that in this particular case the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
