In re Hero Solar Energy Pvt. Ltd. (GST AAR Haryana)
(i) The supply of Solar Power Generating System along with other goods and service of designing, erection, commissioning & installation of the same is classified under SI no. 234 of Notification No. 1/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification no. 24/2018-Central Tax (Rate) dated 31.12.2018 and SI no. 38 inserted in Notification no. 11/2017-Central Tax (Rate) dated 28.6.2017 vide Notification no. 27/2018-Central Tax (Rate) dated 31.12.2018.
(ii) The supply of goods along with service of designing, erection, commissioning & installation of Solar Power Generating System along with other goods is covered under SI No. 234 of Notification No.1/2017-Central Tax (Rate) dated 28.6.2017 as amended vide Notification No. 24/2018-Central Tax (Rate) dated 31.12.2018 and SI No. 38 inserted in Notification No. 11/2017- Central Tax (Rate) dated 28.6.2017 vide Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, HARYANA
1.1 Brief Facts of the Case:
1.1 Hero Solar Energy Private Limited (hereinafter referred to as “the Applicant”) is a company incorporated and registered under the Companies Act, 1956. It is also registered under the Goods and Services Tax Act, 2017 at (M/s Hero Solar Energy Pvt. Ltd., Ground Floor, 506/12, Jacubpura, Near Sadar Bazar, Gurugram) with GSTIN 06AADCH1476P1Z7. The Applicant has proposed to enter into the business of setting up of Solar Power Generating System (hereinafter referred to as ‘SPGS’) on a turnkey basis.
1.2 The SPGS is mainly used for generation and storage of electricity. SPGS comprises of mainly three equipments namely, Solar Panels, Solar Power Conditioning Unit (hereinafter referred to as “PCU”) and a Battery bank. These equipments work in tandem with each other to generate electricity from sunlight and its storage. The description and function of each of the equipments is discussed herein under:
a) Solar Panels (also known as “Photovoltaic / PV Panels”) are made of solar cells (also known as “PV cells”) which are connected to each other in series and parallel connection. Solar cells are made up of silicon semiconductor material which converts the energy generated from sunlight into electrical energy. The electrical energy generated by conversion of sunlight is known as Solar power. Solar PV modules/panels are to be positioned at p er inclination to collect maximum energy from the sunlight. Hence, these panels are generally installed on the slanting rooftops or slanting industrial sheds with the help of nuts and bolts so that it can perform its designated function i.e. to collect sunlight in efficient manner. However, where slanting base for mounting is not available, these panels are stationed on the module mounting structures erected in the fields / rooftops to collect maximum energy from the sunlight. These mounting structures are made of angles, channels, etc. and these are fixed on a concrete foundation. These structures can be detached from civil foundation and shifted to another location without damaging them.
b) Solar PCU (inverter) is an integration of Solar Charge Controller and DC-AC Inverter.
(i) Solar Charge Controller- Solar Charge Controller is technically known as a Charge controller. It determines how much power should be injected into the batteries for optimum performance. It measures the efficiency of the entire system as well as the operating life of the batteries. It also protects the battery bank from overcharging. Whenever a battery is used, a charge controller is also used to ensure longer battery life.
(ii) DC to AC Inverter- The electrical energy generated by the Solar Panels is in Direct Current (hereinafter referred to as “DC”) form. However, electrical appliances mostly function on Alternating Current (hereinafter referred to as “AC”) form of electrical energy. Accordingly, a DC to AC solar inverter (also known as ‘solar inverter’) is used which converts the electrical energy generated in DC into AC so that electrical energy can be used by such appliances. Such conversion takes place with a minimal time gap.
c) Battery Bank is an electro-chemical device containing Lead. It is a secondary battery used to store electrical energy by the means of oxidation- reduction (redox) reactions. Battery Bank can be charged both using Solar power or using regular power supply (also known as “mains”). If connected to mains, the Battery Bank is charged using mains when Solar power is not suffici to charge it. It provides power to the DC to AC Inverter so that connected appliances can run during power failure. Battery Bank is designed for sufficient capacity to run the stipulated load for specified duration.
1.3 Solar PCU and Battery bank can be installed anywhere connected to the panels. Further, depending upon the nature of SPGS, other equipment viz. MCBs, Energy load meters, LT panels and transformers are also required for the functioning of SPGS. These equipments are moveable but for wobble free working, these may be installed using nuts bolts in the civil structure. Also, ancillary items such as wires/cables are required for connecting equipment and nut bolts, mounting structure are required for mounting of Solar Panels.
1.4 The Applicant has proposed to enter into the business of setting up of two types of SPGS which are Solar Rooftop Plant and Ground Mounted Solar Power Plant (Grid Connected) on a turnkey basis whereby the Applicant will supply the abovementioned equipment and will undertake designing, erection, commissioning and installation of the same at the customer’s site.
(A) Solar Rooftop Plant:
Solar Rooftop Plant is a Solar Photovoltaic system which generates electricity from solar panels mounted on the rooftop of a residential or commercial building or structure viz industrial shed. These are usually ranging from few Kilowatt (KW) to less than a Megawatt (MW). Since Solar PV modules/panels are to be positioned at proper inclination to collect maximum energy from the sunlight, these panels may be installed on the slanting rooftops / industrial sheds with the help of nuts and bolts or where slanting base for mounting is not available, these panels may be fixed on the module mounting structure by using nuts and bolts. The module mounting structure is made of standard Gl/aluminium angle and fixed on rooftops with the help of concrete foundation. The Solar panels as well as the mounting structure can be easily unbolted, moved and installed at another place. The remaining two parts of system i.e. Solar PCU and Battery bank are moveable and can be installed using nuts bolts in the civil structure, for wobble free operations.
Further, as a part of SPGS for roof top, cables, MCBs, energy load meters and LT panels are also installed and perform following functions:
(i) MCB/MCCBs are used as circuit breakers after the inverter for protection of plant and for operation and maintenance activities.
(ii) Energy meter is essential part of solar plant for energy measurement and billing purpose.
(iii) LT panel is required to connect & combine the inverter output power. Further, the energy meter and MCB/MCCB’s are installed in LT panel.
The aforementioned components are completely movable and connected with cables with each other for the operation of the entire SPGS. These can be installed using nuts bolts in the civil structure, for wobble free operations.
B Ground Mounted Solar Power Plant (Grid Connected):
Ground mounted Solar Power Plant is not different from relatively smaller Solar Rooftop Power Plant. They both generate solar power in a similar manner. The main difference between Solar Rooftop Plant and Ground Mounted Solar Power Plant lies in a way the solar power energy is consumed. As in the case of rooftop solar, the power generated is mostly consumed at the same site (say the house or the office/commercial building), with any small excess transmitted to the grid. However, in case of ground mounted solar power plant, the electricity is not used at the site, but instead, it is transmitted through electricity grid at different places.
The Ground mounted solar power plant is mounted on standard GI/aluminium module mounting structure to collect maximum energy from the sunlight. These mounting structures are fixed with the help of concrete foundation and hold the solar panels up at a fixed angle in order to achieve operational efficiencies. These structures don’t require drilling deep into the earth, and the bracings used in standard ground mount systems are lightweight and easy to remove. These can be erected on any type of geographical regions i.e. arid region, agricultural fields, open vast lands, etc. depending upon the availability of the land. For example, where the Solar PV Modules are to be erected on the agricultural or grasslands, minimum civil work (base) is required to provide the s bility to the angles/mounting structures holding the Modules/Panels. Such angles / structures can be fixed into the base which can be removed at any time depending on the requirement and re-fix in a different place. The remaining two essential parts of system viz. Solar PCU and Battery bank can be installed anywhere connected to the panels.
1.5 Apart from three essential components i.e. solar panels, solar PCU and battery bank, following components are also required in case of ground mounted solar power plant:
(iv) Transformer: the power output of the inverter is at the low voltage and as there is high loss at the low voltage, transformer is used to step up the voltage at the higher level in order to minimize the cable losses.
(v) HT Switchgear: this component consists of the relays and the circuit breaker that in turn are used to protect the system in case of any faults in the plant. Air Circuit Breaker, Vacuum Circuit Breaker and SF6 circuit breaker are normally used in the HT switchgears.
(vi) Outgoing Switchyard: This consists of the power transformer, its protective relays and switchgears, control and relay panels. Switchyard is the key portion which joins/integrates the solar power plant to the utility gird.
(vii) Energy Meters: Energy meters record the energy being produced and supplied to the grid. Based on the record the commercial billings are done for the solar power plant. Usually Main, Check and Standby i.e. 3 energy meters are installed in any utility solar power plant as per the CERC guidelines in India.
(viii) Utility Grid: The energy generated from the solar power plant is transmitted to the consumers through the transmission line network commonly known as utility grid. Various voltage level of the utility grid depending on the size of the plant like 11 kV, 33 kV, 66 kV, 110 kV, 132 kV, 220 kV, 400 kV, 765 kV, etc exists in India. Transmission line conductor with insulators and the transmission line towers combines together to form the utility grid.
(ix) Other components like energy meters, circuit breakers, cables etc. are also required to be connected for functioning of the entire system.
Overview of proposed contract structure for SPGS
2 The Applicant has proposed to enter into a turnkey contract for setting up of SPGS which includes supply of PV Modules, Inverters, Cables, Connectors, other ancillary goods as well as supply of designing, engineering, erection, installation and commissioning services of the equipment and material so supplied. Such turnkey contract is for lump sum price.
3 Further, a broad cost structure comprising of major goods and services to be supplied, is provided in the table below for the ease of reference:
