In re M/s Premier Solar Systems (P) Limited (GST AAR Uttarakhand)
(a) Whether the supply of solar rooftop power plant along with design, erection, commissioning & installation is a ‘composite supply’ and the applicability of GST rate’.
Supply in question would covered under “Solar Power Generating System” as a whole in terms of serial no. 234 of Schedule-I of the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.
(b) Whether the supply of solar irrigation water pumping systems along with design, erection, commissioning & installation is a ‘composite supply’ and the applicability of GST rate’
Supply in question would be treated as “composite supply”.
70% of the gross value of supply in question shall be the value of supply of said goods falling under chapter 84, 85 or 94 of the Tariff only would attract 5% GST rate and the remaining portion (30%) of the aggregate value shall be the value of supply of taxable service attracting 18% GST rate in terms of Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018. Other goods used in these plants attract applicable GST rate.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING,UTTARAKHAND
Note:- Under Section 100(1) of the Uttarakhand Goods and Services Tax Act, 2017, an appeal against this ruling lies before the appellate authority for advance ruling constituted under section 99 of the Uttarakhand Goods and Services Tax Act, 2017, within a period of 30 days from the date of service of this order.
1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 (herein after referred to as Act) and the rules made thereunder filed by M/s Premier Solar Systems (P) Limited, Buliding No-4, Edwards 25/1, Rajpur Road, Dehradun, Uttarakhand seeking an advance ruling on following issues:
(a) Whether the supply of solar rooftop power plant along with design, erection, commissioning & installation is a ‘composite supply’ and the applicability of GST rate’.
(b) Whether the supply of solar irrigation water pumping systems along with design, erection, commissioning & installation is a ‘composite supply’ and the applicability of GST rate’
2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub section (2) of section 97 or sub section (1) of section 100 in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
3. As per the said subsection (2) of Section 97 of the Act advance ruling can be sought by an applicant in respect of:
(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,
(d) Admissibility of input tax credit of tax paid or deemed to have been paid
(e) Determination of the liability to pay tax on any goods or services or both
(f) Whether the applicant is required to be registered
(g) Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both within the meaning of that term
4. In the present case applicant has sought advance ruling on applicability of GST rate on said supply and whether the same falls under “composite supply”. Therefore, in terms of said Section 97(2)(e) & (g) of Act, the present application is hereby admitted.
5. The Joint Commissioner, SGST, Dehradun vide letter dated 20.12.2018 forwarded the report of Assistant Commissioner, SGST, Khand-1, Dehradun (here-in-after called as said officer) in this regard wherein the said officer has submitted that the service portion of erection, commissioning & installation of “solar rooftop power plant” and solar irrigation water pumping system” is less than 10% of whole cost of the said plant/system and since the components/parts of “solar rooftop power plant” and solar irrigation water pumping system” form the “principal supply”, thus the contract for the supply in question will be treated as “composite supply” and the GST rate on the same will be 5% in terms of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.
6. Accordingly opportunity of personal hearing was granted to the applicant on 29.11.2018. Mrs. Revathi Rohini, Vice President of applicant appeared for personal hearing on the said date and submitted documents describing therein exact nature of work being undertaken. Jurisdiction officers of SGST and CGST were not present during the personal hearing, however the concerned officer Mrs. Preeti Manral, Deputy Commission, SGST-Dehradun was present during the proceedings.
7. From the documents submitted by the applicant we find that applicant is registered in Uttarakhand with GSTIN bearing no. 05AABCP8800D1ZU. The applicant has submitted the nature of the work proposed to be undertaken in respect of supply in question and the same is summarized as under:
(i) Solar Roof Top Power Plant: It is a compact solar system which can be installed on the house roof for fulfilling the electricity requirement. The contents of the same are as under:
a. SPV modules: The main part of a solar power generating system is the solar photovoltaic modules. Solar Modules contain photovoltaic cells which convert the sun light into electricity and transmitted the produced electricity to inverters through cables and electrical connectors.
b. Inverters: The electricity produced in a solar panel is DC. Electricity we get from the grid supply is AC. So it is required to install an inverter to convert DC of solar system to AC of same level as grid supply. In off grid system the inverter is directly connected across the battery terminals so that DC coming from the batteries is first converted to AC then fed to the equipment. In grid tie system the solar panel is directly connected to inverter and this inverter then feeds the grid with same voltage and frequency power.
c. Controller: It is not desirable to overcharge and under discharge a lead acid battery. Both overcharging and under discharging can badly damage the battery system. To avoid these both situations a controller is required to attach with the system to maintain flow of current to and fro the batteries.
d. Cable: Electrical cables are required to connect the roof top module and the inverters and to grid meter.
(ii) Solar Irrigation Water Pumping Systems: It is a compact and indigenous system can be set up at agriculture field where grid based electricity is not possible or expensive to establish. The contents of the same are as under:
a. SPV modules: The main part of a solar power generating system is the solar photovoltaic modules. Solar Modules contain photovoltaic cells which convert the sun light into electricity and transmitted the produced electricity to inverters through cables and electrical connectors.
b. VFD (Variable Frequency Drive) or Pump Controllers: This device converts the DC power to AC power and control the frequency of power to run the Svater pump’.
c. Submersible Pump or Surface Pump: Pumps are set up to draw water from ground and bore wells. In case where the ground water level is low, submersible pumps are used and where water levels are adequate, upper surface pumps are installed.
d. Pipes & Connectors: Pipes & Connectors are used to connect pumps and draw water from bore well and thereon connected to tanks for storage and directed to fields.
8. In the present case we are not deciding any wider question but restricting our conclusion to the facts and circumstances which was filed for our consideration in the application. Now we proceed as under:
8.1 Whether the supply in question is covered under “Solar Power Generating System” as a whole and can be called as ‘composite supply or mix supply’ & what will be the rate of GST on such supply. To appreciate the law position in this regard we reproduce the relevant portion of the Act as under:
(i) Section 2(30) of the Act ibid “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;
(ii) Section 2(74) of the Act ibid “mixed supply” means two or more individual supplies of goods or services, or any combination thereof made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.
(iii) Section 2(90) of the Act ibid “principal supply” means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary;
(iv) Section 8 of the Act ibid: The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:-
(a) a composite supply comprising two or more supplies, one oj which is a principal supply, shall be treated as a supply of such principal supply; and
(b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.
8.2 We find that Solar Power Generating System” has not been defined in GST. We also find that in erstwhile Central Excise regime, though exemption to said “Solar Power Generating System” was granted vide serial no. 332 of Notification No. 12/12-CE dated 17.03.2012 but the same has also not been defined in the said regime. The relevant portion Notification No. 12/12-CE dated 17.03.2012 is reproduce as under:
Comments are closed.