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TMI Blog2021 (4) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... nd expected future similar orders, for supply of "Solar DC Cables", for use as Parts in the manufacture of Solar Power Generating System; that though these Solar DC Cables are universally classified under Tariff Heading No.8544, they are used as integral parts in Solar Power Generating System without which Solar Power Generating System cannot function and cannot be treated as complete in all respect and at the same time the same is capable of being separated for repairs and replacement; that, therefore, all the Solar Power Project authorities are claiming that these 'Solar DC Cables', will attract GST @5% in terms of Sr.No.234 of Schedule-I of the Notification No.01/2017-Integrated Tax(Rate) dated 28.06.2017; that Purchase Orders bearing No.4500328493 dated 03.07.2020 and No.4500327829 dated 17.06.2020 and related to the above Project Authorities, confirming the applicability of concessional rate of GST @5% is submitted; that while placing the above orders, the indenting project authority is claiming that applicable GST will be @5% on Solar DC Cables, since the same is forming an integral part in the manufacture of Solar Power Generating System and hence Sr.No.234 of Schedule-I to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same is used as Parts for the manufacture of Solar Power Generating System in terms of Notification No.1/2017-I.T.(Rate) dated 28.06.2017; that the said Notification No.1/2017-IT (Rate), do not impose any conditions, unlike pre-GST Notification (referred above), for claiming the benefit of concessional rate of GST Rate; that the Authority has issued a similar certificate for the use of goods supplied by the applicant for the intended purpose by the Solar Power Project Authority which clearly substantiates that the Cables supplied by them will be used as Parts in the manufacture of Solar Power Generating Projects. Entry at Sr.No.234 of Schedule-I of above Notification is reproduced as under: Schedule I - 5% Chapter /Heading / Sub-heading / Tariff item Description of Goods (2) (3) 84, 85 or 94 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 (h) Photo voltaic cells, whether or not assembled in mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by them for use as parts in the manufacture by the Solar Power projects, the benefit of concessional rate of GST @ 5% is clearly admissible to them; that they have verified from Purchase Order placed on them which is attached with their original Application for Advance Ruling that the goods will be used only in Solar Power Generating System and also obtained end user certificate as per Annexure-IV submitted by them. The applicant has stated that they rely on the following Advance Rulings to support their contention: (i) Order No.07/2018-19 dated 28.08.2018 passed by the Authority of Advance Ruling-Uttarakhand, in the case of M/s Eapro Global limited, Roorkee. (ii) Order No.15/2018-19 dated 23.01.2019 passed by AAR, Uttarakhand, in the case of M/s. Premier Solar Systems(P) ltd., Dehradun. (iii) Order No.Giriraj Renewables (P) ltd. - AAAR(146) AAR Karnataka (215). 5. They have concluded their submission by requesting that it be held that supply of "Solar DC Cables" to Solar Power Generating Projects for use as parts for their manufacture will be covered by Entry Sr.No.234 of the Schedule-I to Notification No.1/2017-Integrated Tax (Rate), and will attract concessional Rate at 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h are in the nature of evidence to prove it beyond doubt that the PO was accepted and that such PO was placed for DC cables to be used in Solar Power projects. DISCUSSION & FINDINGS: 8. We have considered the submissions made by the applicant in their application for advance ruling, submissions dated 22.12.2020, additional submission of the applicant(received in this office on 29.12.2020) as well as the arguments/discussions made by their representative Shri Amal Dave, Advocate at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 9. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act. However, since the present application submitted by the applicant deals with inter-state supply of goods, we will be required to make references to the IGST Act, 2017 as well as the Notifications of Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of goods specified in Schedule V, and (vi) 0.125 per cent. in respect of goods specified in Schedule VI Further, Explanation (iii) and (iv) of the said Notification reads, as under: (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 13. On going through the aforementioned notification, we find that there is an Entry No.234 which appears in Schedule-I of the said notification and reads as "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 (covering goods of Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w, the next issue to be dealt with is whether the DC cables manufactured by the applicant are being used as parts of Solar Power Generating System as submitted by the applicant. In order to find out whether the DC cables manufactured and supplied by the applicant indeed form integral parts of the Solar Power Generating System, we need to first know what a Solar Power Generating System is. As known in common parlance, Solar power generating systems generally is a system which absorbs sunlight and converts it into electricity which can be put to further use. A Solar Energy System is a renewable energy generating system that collects photovoltaic energy from the sun and converts it into usable electricity. A solar energy generating system relies on four main components: solar panels, inverter, controller and batteries and details are as under : (i) Solar panels : The main part of a solar power generating system is the solar panel. Solar panels contain solar cells. Solar cells, sometimes called photovoltaic cells, convert the energy of the sun into electricity. (ii) Inverters : The electricity produced in a solar panel is DC. Electricity we get from the grid supply is AC. So it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solar tracking system to improve the system's overall performance and include an integrated battery solution, as prices for storage devices are expected to decline. Strictly speaking, a solar array only encompasses the ensemble of solar panels, the visible part of the PV system, and does not include all the other hardware, often summarized as balance of system (BOS). The major components of a typical Solar project will look as below: Various Types of Cables used in Solar Power Generating system As can be observed, at each and every stage, suitable cables are required, the cables used are: a) Solar DC String Cables to interconnect the Solar Panels and are manufactured as per EN-50618:2014 b) DC application cables for use from Combiner Box to Inverter are XLPE Insulated and manufactured as per IS:7098(Part-I) c) AC application cables for use from Inverter to step up transformer are XLPE Insulated and manufactured as per IS:7098(Part-I) d) Medium Voltage 11-33 KV XLPE Cables used for Transformer to the grid / substation e) Communication Cables RS 485 and Fiber Optic Cables Solar DC String Cables: Solar DC String Cables are used to interconnect the Solar Panels, g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interconnecting cables, the components like Solar Panels and others cannot generate usable power." 16. We have gone through the aforementioned details of the Solar Power Generating System, the uses of cables therein as well as the technical write-up submitted by the applicant. We find that DC cables do form an integral part of the Solar Power Generating System as they interconnect the Solar Panels to collect the generated power into a combiner box, interconnect cables from Combiner Box to a solar inverter to convert the output from DC to AC etc. as mentioned in the write-up. We also find that the DC cables have to be manufactured as per certain specifications as mentioned in the write-up so as to enable them to withstand extremely high as well as extremely low temperatures. However, in order to confirm as to whether the DC cables manufactured and supplied by the applicant in the instant case are covered under Sr.No.234 of Schedule-I of Notification No.01/2017-Integrated Tax(Rate) dated 28.06.2017 or otherwise, it is necessary to confirm that the DC cables are indeed used as parts of Solar Power Generating System or otherwise in the instant case. For this purpose, we find it necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite document from the buyer such as supply contracts/order for WTEP from the concerned authorities before supplying goods claiming concession under Entry 234. Comparing the said clarification with the issue in hand, we find the applicant has not provided/submitted copies of the supply contracts or orders for the Solar Power Generating System from the buyer regarding supply of parts for the same as required in the above circular. However, they have submitted copies of two purchase orders bearing No.4500328493 dated 03.07.2020 and No.4500327829 dated 17.06.2020 issued to them by their buyer M/s.Adani Green Energy ltd., Rajasthan. Further, we would like to emphasise here that purchase orders do not have any binding on both the parties as it is not a legal document in case any dispute arises and matter goes to the court of law. However, since this is the only document submitted by the applicant with regard to the transactions in the instant case, we need to go through the same thoroughly. After going through the aforementioned purchase orders, our attention was drawn to the details mentioned under the head "1.0. SCOPE OF WORK/FACILITIES", which raises certain questions regarding the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e copy of Contract/agreement alongwith their submission. Although the representative of the applicant was requested to submit the copies of contract/agreement/tender etc. during the course of personal hearing, they have not submitted the same neither during the course of personal hearing, nor thereafter. In view of the above discussions, it can very easily be inferred that both the Contract/agreement as well as the Technical Specification' referred to above are extremely important documents and without going through the 'Technical Specification' which contains the detailed scope of supply and the Contract/agreement signed by the applicant with the buyer, it would be impossible for us to arrive at a conclusive decision in the instant case. The applicant has also not submitted/provided copies of the tender awarded to their buyer M/s.Adani Green Energy ltd., Rajasthan in the instant case, although the representative of the applicant was specifically asked to provide the same during the course of personal hearing. Also, in their additional submission (which was received in this office on 29.12.2020), they have stated that they are not in possession of the same but will submit it as and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation charged for all such supplies, and the remaining thirty per cent. of the gross consideration charged shall be deemed as value of the said taxable service. Simultaneously, Notification No.28/2018-Integrated Tax (Rate), dated 31-12-2018 amended Notification No.8/2017-Integrated Tax (Rate), dated 28-6-2017(w.e.f. 01.01.2019) vide which Serial No.38 was inserted in Notification No.8/2017-Integrated Tax (Rate), dated 28-6-2017 in respect of services related to setting up of solar power plants. The entry at Serial No.38 reads as under : Sl. No. Chapter, Section or Heading Description of Service Rate (%) Condition 38 9954 or 9983 or 9987 Service by way of construction or engineering or installation or other technical services, provided in relation of setting up of following, - (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) Ocean waves/tidal waves energy devices/plants Explanation :- This entry shall be read in conjunction with Serial Number 234 of Schedule I of the Notification No. 1/2017-Integrated Tax (Rate), published in the Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support their contention. In this context, we have to emphasise here that decisions of Advance Ruling Authorities cannot be relied upon by the applicant, since, as per the provisions of Section 103 of the CGST Act, 2017, the Advance Ruling pronounced by the Advance Ruling Authority or the Appellate Authority shall be binding only on the applicant who had sought it in respect of any matter referred to in sub-section(2) of Section 97 for Advance Ruling and the concerned officer or the jurisdictional officer in respect of the applicant.
19. In light of the above circumstances, we rule, as under -
R U L I N G
Question: Whether the applicability or determination of liability to pay Tax on our said goods at 5% GST rate is legally correct and in order in terms of Schedule-I of Notification No.1/2017-Integrated Tax(Rate) or not?"
Answer: In view of non-submission of copies of contract/agreement/tender/ technical specifications as mentioned above, by the applicant M/s. Apar Industries ltd., Plot No.189/P1, GIDC Road, Tal. Umbergaon, Valsad, it would not be possible for us to give a decision in the matter for the reasons discussed hereinabove. X X X X Extracts X X X X X X X X Extracts X X X X
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