In re Sapna Gupta (M/s. Utsav Corporation) (GST AAR Rajasthan)
Q. What should be the classification and GST rate on Supply of Solar water pumping system as a whole comprising of goods (Solar Panel + Solar Controller + Solar Pump + Structure) along with the installation of Solar water pumping system for drinking water application?
Ans The proposed supply comprising of Solar Panel. Solar Controller. Solar Pump, Structure along with the installation shall attract GST @18% under S. No. 3 of Heading 9954 (ii) of Notification no. 11/2017-Central tax (rate).
Read AAAR Order:- GST on supply of Solar water pumping system alongwith installation
FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, RAJASTHAN
Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order.
> At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST Act tire 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 the same provision under the RGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / RGST Act would be mentioned as being under the “GST Act”.
> The issue raised by Sapna Gupta M/s Utsav Corporation, Plot No. 15. S-l, Gurjar Ki Thadi, Shyam Nagar, Jaipur, Raj. -302019 (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (a) given as under:-
(a) Classification of any goods or services or both:
Further, the applicant being a registered person (GSTIN is 08BXFPG0701B1ZA) as per the declaration given by him in Form (ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling.
A. SUBMISSION AND INTERPRETATION OF THE APPLICANT;
STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE QUESTIONS RAISED
1. M/s Utsav Corporation (hereinafter referred to as “applicant”) is a proprietorship concern engaged in providing products and services in energy conservation, renewable energy sources, water infrastructure and water treatment project management. The applicant is engaged in supply of solar energy based products under various contracts , and on the basis of purchase orders from customers with or without installation service.
2. That the applicant is registered under GST as per the provisions of the GST law bearing GSTIN 08BXFPG0701B1ZA in the state of Rajasthan.
3. That in relation to the contracts/orders of pure sale of solar energy devices, the applicant is willing to seek an advance ruling for classification and GST rate on supply of solar energy products as Solar Water pumping system as a whole, sale of one of the products on standalone basis, and sale of the products under various combinations to be undertaken by them.
4. That this Advance Ruling is sought from the Authority for Advance Ruling. Rajasthan in respect of the following question:-
1) What should be the classification and GST rate on sale of following goods or combination of goods;
a) Solar Pump
b) Controller
c) Structure
d) Solar Water Pumping System (comprising of Solar panel + Controller + Solar Pump + Structure)
e) Solar panel + Solar Controller + Solar Pump
f) Solar Pump + Solar Panel
g) Solar Pump + Controller
h) Solar Panel + Controller
2) What should be the classification and GST rate on Supply of Solar water pumping system as a whole comprising of goods (Solar Panel + Solar Controller + Solar Pump 4 Structure) along with the installation of Solar water pumping system for drinking water application?
Annexure-2
STATEMENT CONTAINING INTERPRETATION OF LAW & FACTS, IN RESPECT OF THE AFORESAID QUESTIONS
I. APPLICANT’S ELIGIBILITY TO FILE PRESENT ADVANCE RULING APPLICATION
1. That sub section (c) of section 95 of CGST Act 2017 defines the term ‘applicant’ as under:
(c) “applicant” means any person registered or desirous of obtaining registration under this Act.
2. In the present matter, the applicant is registered under the GST regime and hence covered under the definition of the term “applicant” for the purpose of presenting the application before the Advance Ruling Authority under the GST Regime. Copy of GST Registration certificate for the state of Rajasthan is enclosed as Annexure-13.
3. Further section 97(2) of the CGST Act specifies the issues for which an advance ruling can be sought. Section 97 of the said act reads as under.
(1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such fee as may be prescribed, slating the question on which the advance ruling is sought.
(2) The question on which the advance ruling is sought under this Act. shall be 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 lax paid or deemed to have been paid;
(e) determination of the liability to pay lax on any goods or services or both:
(f) whether 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. Thus, as per the said section, advance ruling may be sought by the applicant on the questions concerning classification of goods or services and determination of the liability to pay tax on goods or service. The applicant submits that the questions for determination in the instant advance ruling application concern (a) classification of goods or services and (b) determination of the liability to pay tax on goods or services.
5. Therefore, in the instant case the applicant is eligible to file the present advance ruling before the Authority for Advance Ruling.
II. APPLICANT’S INTERPRETATION
Legal Provisions and Interpretation in light of Facts of the Case
1. The charging section for GST i.e. Section 9 of the Central Goods and Services Tax Act 2017 provides as under
9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and al such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.
2. Notification No. 01/2017 – Central Tax (Rate) dated 28.06.2017 has been issued by Central Government for notifying GST rates for goods and respective notifications have been issued under Rajasthan GST and IGST Acts.
3 It is imperative for the purpose of interpretation of this notification to refer the Explanation thereto which states 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.
(iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act. 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.
4. Therefore, to understand the classification and GST rates for the products and combinations thereof in question, it is important to have an understanding about the products.
Sale of products on standalone basis
1. Solar Panels
Solar panels are those devices which are used to absorb the sun’s rays and convert them into electricity. A solar panel is actually a collection of solar for photovoltaic) cells, which can be used to generate electricity through photovoltaic effect. The solar panels used in solar water pump systems produce electricity by using the photovoltaic effect. These solar panels absorb the sun’s photons and convert them into energy.
Classification of Solar panels in Customs tariff is under Heading 8541 which is as below:
