In re Jupiter Polar Power Ltd. (GST AAR Himachal Pradesh)
silicon wafer is the most important input for the manufacture of solar cells which is treated with the various chemicals during the different steps of texturization, diffusion, junction edge isolation, anti-reflection coating etc. The various chemicals used during the manufacturing process have been specified in Table-A from Sr. No. 2-13. These chemicals. though used in the process, yet get consumed & lose their independent identity. To qualify as being part of the product for the purpose of aforesaid notification, the item should maintain substantial independent physical identity as when it is used in the final product. All these items mentioned in Table-A from Sr. No. 2-13, instead of being treated as parts for the purpose of Entry 234 of the Notification No. 01/2017-IGST (Rate), can only be treated as inputs and do not qualify as parts for the manufacture of Photovoltaic/solar cells.
In the Customs Tariff Act, 1975, the Wafer has been shown as under:-
3819: 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
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.
Furthermore, along with some other inputs/items, silicon wafers, as specified at Sr. No. 1 of Table A, is the most important input for the manufacturing of Photovoltaic cells & makes up almost the whole of Photovoltaic cells. It is contained in the solar cell & visible in the solar cell. It is also clear that without the Silicon wafer, the functional value of the Photovoltaic cell is NIL as Silicon wafers help in creating electricity by absorbing photons from the sunlight. The close physical examination of the photovoltaic cell reveals that along with some other inputs/items it is made up of silicon wafer only which is treated with various chemicals in order to make it usable as photovoltaic/solar cell. In other words, the photovoltaic cell can be called as chemical treated ‘Silicon wafer’ along with other inputs/items. This is similar to a glass sheet which is coated/ treated with various chemicals & the final product comes out as ‘Mirror’. So, if we take out glass from the mirror, nothing remains as glass is the only component of mirror which has substantial & independent physical identity. Similarly, if we tale out Silicon wafer from the photovoltaic cell, nothing remains as such. ALIN’ manufactured product implies the use of raw materials, assemblies, components & parts in required quantity. So, in order to qualify as ‘Part of the whole’, something should remain after the part is taken out of the whole. So in the present case, though the Silicon wafer has substantial physical & independent identity, yet when it is taken out of the solar cell, nothing remains & secondly, it can not be used in another cell as it gets totally damaged. This fact has been Admitted by the Applicant also. A photovoltaic cell can at best be termed as chemical treated ‘Silicon wafer’ along with other items so as to infuse it with the properties of a solar cell’. That is why it can not be termed as the ‘Part of the Photovoltaic Cell’ for the purpose of Entry-234 of Schedule 1 of the aforesaid notification.
In view of the above observations, it is ruled that (1) 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 1 of Notification No. 01/2017-Integrated Tax(Rate) dated 28.6.2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING
PROCEEDINGS
(under section 98 of the CGST Act, 2017 & HPGST Act, 2017)
Present application has been filed u/s 97 of the Central Goods and Service Tax Act, 2017 & similar provisions under Himachal Pradesh Goods & Services Act, 2017 (herein after referred to as CGST Act, 2017 & HPGST Act, 2017). The Applicant M/s Jupiter Solar Power Ltd. Baddi is a registered tax payer & is engaged in manufacture of solar photovoltaic cells in its factory located at Baddi, Distt. Solan (H.P.).
For admission & hearing u/s 98 of the CGST Act, 2017/HPGST Act, 2017, notice was issued to the applicant on dated 10.07.2017 directing him to appear on 16.07.2017. However, on 16.07.2017, Mr. Daman Thakur, representative of the applicant appeared & requested for adjournment on the grounds that the counsel was unable to appear on that date due to prior engagements. Plea was accepted & hearing was adjourned for 19.07.2017. On 19.07.2018, Sh. Pramod Kumar Rai, Advocate for the Applicant along with Sh. Sandeep, Associate Vice-President of the applicant firm M/s Jupiter Solar Power Ltd. appeared. On scrutiny of the application, it was observed that the Applicant has deposited an amount of Rs. 10,000/-(i.e. Rs. 5000/- against lee under MST & Rs. 5000/- as fee against HPGST) vide CPIN No. 18040200044.723 dated 21.04.2018. Further, the Applicant in his application in Form GST ARA-oi has specified in Para 17 that the question raised in his application is neither pending in any proceedings nor decided in any proceedings in the Applicant’s case under any of the provision of the Act. Also, as per Para 13 of the application, the question on which the Advance Ruling is sought is in respect of ‘Applicability of Notification issued under the provisions of the Act’, which is specified under Sec. 97(2)b of the Act. So, in view of the above, the application of the Applicant was admitted. Thereafter, the arguments of the Applicant were heard & ruling was reserved which is released today i.e. on dated 25.07.2018.
Statements of facts
a) As per the Annexure-I appended to the application, the Applicant is engaged in manufacturing of Solar Photovoltaic cells. For the manufacture of solar photovoltaic cells, the Applicant procures (imported as well as indigenous) following items/parts/materials which are essential components of Solar Photovoltaic Cells. Out of these items Silicon Wafers is the most important item which absorbs the photons & in turn generates electricity.
Table A-List of inputs for manufacture of Solar Photovoltaic Cells:
