In re M.N. Solar Co. (GST AAR Haryana)
AAR held that that the combination of solar panel, inverter, solar battery and charge controller may qualify as “Solar Power Generating System. If said items are supply in the assemble form, it will covered under ‘Solar Power Generating System’ and will be treated as composite supply. Accordingly rate prescribed in GST vide Notification no. 01 /2017Central tax (Rate) dated 27.01.2017 will be 12% for ‘Solar Power Generating System’ is applicable. However, if the said items are supplied individually and their value is also shown in the invoice individually, then the said supply will be treated as mixed supply.
As the combination of solar inverter & battery do not make ‘Solar Power Generating System’, thus the said supply will be treated as mixed supply and rate of GST will be 18%. The rate of GST does not alter whether the supply has been made by the manufacturer or trader.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, HARYANA
1. APPLICANT’S ELIGIBILITY FOR SEEKING AN ADVANCE RULING:
1.1 To file an application before the Authority of Advance Ruling, the applicant must satisfy the conditions prescribed under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act, 2017) and Haryana Goods and Services Tax Act, 2017 (hereinafter referred to as HGST Act, 2017). Since the provisions of both the Acts are parimateria, any reference to provisions of CGST Act, 2017 in this order should be construed as a reference to corresponding provisions in HGST Act, 2017 as well.
1.2 Sections 97(2) (a)(b)& (c) read with Section 95 of the CGST Act, 2017 prescribes that Advance Ruling may be sought inter alia on the question of (a) Classification of goods and/or services or both, (b) Applicability of a notification issue under the provisions of this Act. (e) Determination of the liability to pay tax on any goods or services or both, (g) Whether any particular thing done by the applicant with respect to any goods and/or services or both amounts to or results in a supply of goods and/or services or both, within the meaning of that term.
1.3 There is no bar on an applicant from seeking an Advance Ruling in terms of Section 98(2) of CGST Act, 2017 in as much as the questions raised by the applicant are neither pending nor decided in any proceedings in the ease of the applicant under the provisions of CGST/HGST Act, 2017. As per the declaration given by the applicant in form ARA-01 the issue raised by the applicant is neither pending nor decided in any proceeding under any of the provisions of the Act, against the applicant, therefore, he is eligible to seek an Advance Ruling under the above provisions. Besides the applicable fees in the matter has been paid by him so the case is being heard on merits.
2. BRIEF FACTS OF THE CASE:-
A. M/s M.N Solar Co., ward no. 5, House no. 298, Kot Mohalla, Ganaur Distt. Sonipat (herein after referred to as the applicant) is registered under the Act having state jurisdiction (GSTIN -06BEDPN4222D1ZO).The applicant proposes to be engaged in manufacturing of solar inverter and lead acid battery. Apart from that the applicant will procure solar panel and controller from the open market and there after sell the same as a composite unit to the consumer and to the dealer. He plans to sell this composite unit as solar power generating system. The description and function of each of the equipment as stated by the applicant is elaborated below:-
Solar Inverter: – That inverter which is itself a renewable energy device and capable of generating and storing solar power. A solar inverter or PV inverter is a type of electrical converter which converts the variable direct current (DC) output of a photovoltaic (PV) solar panel into a utility frequency alternating current (AC) that can be fed into a commercial electrical grid or used by a local, off-grid electrical network. It is a critical balance of system (BOS)-component in a photovoltaic system, allowing the use of ordinary AC-powered equipment. Solar power inverters have special functions adapted for use with photovoltaic arrays, including maximum power point tracking and anti-islanding protection.
Battery: That the battery is charged by solar electricity and this battery then feeds a load directly or through an inverter. In this way variation of power quality due to variation of sunlight intensity can be avoided in solar power system instead an uninterrupted uniform power supply is maintained.
B. The applicant has seeks an advance ruling from the Authority of Advance Ruling(GST), Haryana on the following issues :-
Question -1. Whether the solar inverter manufactured by the applicant fall under entry no. 234 of Schedule -I of the Notification 1/2017 – Central tax (rate) dated 28.06.2017?
Question-2. Whether Solar Batteries manufacture by the MNS and sold to the manufactures/trades who further use the same in Solar power plants shall qualify as parts of solar power plants and fall under entry no. 234 of Schedule-I of the Notification 1/2017 -Central tax (rate) dated 28.06.2017?
Question-3. In addition of the above, since we are supplying solar inverter along with solar battery and solar panel together in package, we also seek clarification / ruling that whether said supply in combination will fall under entry no. 234 of Schedule -I of the Notification 1/2017 – Central tax (rate) dated 28.06.2017?
C. STATEMENT CONTAINING THE APPLICANT’S INTERPRETATION OF LAW
The entry no 234 of the schedule I of the Notification No. 01/2017-Central Tax (Rate), dated 28-06-2017 provides the rate of GST on renewable energy devices & parts for their manufacture. Relevant extract of the same is reproduced below:-
Schedule I – 2.5%
