In re Apar Industries Limited (GST AAR Gujarat)
Question: Whether the applicability or determination of liability to pay Tax on supply of ‘Solar DC Cables’, for use as Parts in the manufacture of Solar Power Generating System at 5% GST rate is legally correct and in order in terms of Schedule-I of Notification No.01 / 201 7-Integrated Tax(Rate) dated 28.06.2017 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.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
The applicant M/s. Apar Industries ltd. located at Plot No.189/P1, GIDC Road, Tal.Umbergaon, Valsad (Dist.), Gujarat-396171 AND Survey No.82/2P,88,861/1, 862/1, 863/1, Khata No.1932, Manekpur Road, Khatalwada, Valsad-396120. (having correspondence address at 12/13, Jyoti Wire House, 23A, Shah Industrial Estate, Off.Veera Desai Road, Andheri(West), Mumbai) are manufacturers and suppliers of various goods such as Power/Electric cables, House wire cables, Marine/pressure tight cables and non-pressure tight cables, Solar DC cables, etc. falling under Chapter Heading No.8544 of the Customs Tariff Act.
2. The applicant vide their submissions dated 06.08.2020 and 22.12.2020 have submitted that they have received Purchase Order from Solar Power Generating Projects such as Adani Green Energy Limited, Adani’s Mundra Solar PV Limited, etc. and 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 / 201 7-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 the above notification will get attracted in their supply of Solar DC Cables; that they are internationally certified, approved and recognized manufacturer and supplier of said Solar DC Cables i.e. Photo-Voltaic (PV) Cables (the goods_) and being an applicant in the present application for Advance Ruling seeks immediate ruling/order about ‘Determination of Liability to pay Tax on the above goods’ to be supplied by them from Gujarat State to Solar Power Generating Projects, for use as essential parts in their manufacture. The applicant has requested to take up this matter on priority and out of turn as it involves the national interest and economic development of our country and the requirement of the goods by the project authority is also on priority to complete the project in time.
3. The applicant has submitted that these goods viz. “Solar DC Cables” were manufactured as per the type, size and specifications provided by the Project Authority of Solar Power Generating System and supplied directly to them/their site for use as Parts in the manufacture of Solar Power Generating System; that the Government of India (Ministry of Finance and Department of Revenue, CBIC) had issued a Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017 with 6 ‘Schedules’ specified therein with different GST Rate in respect of the Goods supplied. All goods falling in ‘Schedule-I’ attract 5% rate of IGST [or 2.5% each of CGST & SGST] and their said goods i.e. ‘Cables’ referred above manufactured and to be supplied to Solar Power Projects for use as Parts in their manufacture fall under Sr.No.234 of the Schedule-I to the said Notification and accordingly applicable rate of GST on their above supply will be @ 5%, in total [i.e. 2.5% each of CGST & SGST or 5% IGST); that during pre-GST Regime, “all goods” falling under ‘Any Chapter’, when supplied to Solar Power Projects, were fully exempted from payment of Central Excise Duty as per the Notification No.15/2010-C.E., dated 27.02.2010, based on the Certificate for the intended use, issued by the Project Authority and countersigned by the concerned Ministry of New and Renewable Energy (MNRE);that the Post-GST Notification/Law, however, do not give the full exemption from GST, but gives the concessional rate of 5% IGST [or 2.5% each of CGST & SGST] on the supply of ‘any goods or Parts, falling under chapter 84, 85 or 94’, if the 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-Integrated Tax (Rate) dated 28.06.2017, 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%
