2018 (9) TMI 1526 - AAR - GST

Supply of goods - Rate of GST - Classification of goods - Composite/mixed supply - supply of solar inverter (8504), controller (8504), battery (8507) and panels (8541) under “Solar Power Generating System” (8543) as a whole & whether the such supply be called as ‘composite supply or mix supply’ - whether supply of solar inverter & solar panels together will fall under the definition of “Solar Power Generating System” or it will be a ‘mix supply’ and the applicability of GST rate on supply of solar inverter & solar panels together - applicability of advance ruling clarification - Whether manufacturer or trader will have any significance on the clarification?

Whether the supply of solar inverter, controller, battery and panels are covered under “Solar Power Generating System” as a whole and can be called as ‘composite supply or mix supply’ & what will be the rate of GST on such supply? - Held that:- “Solar Power Generating System” has not been defined in GST law - In erstwhile Central Excise regime, though exemption to said “Solar Power Generating System’ was granted vide serial ho. 332 of Notification No. 12/12-CE dated 17.03.2012 but the same has also not been defined in the said regime.

Supply of solar inverter, controller, battery and panels would be covered under “Solar Power Generating System” as a whole when the said goods are supply for the said specified purpose and accordingly as per serial no. 234 of Schedule-I of the Notification No. 01/2017-CentraI Tax (Rate) dated 28.06.2017, the applicable rate of GST on such supply will be 5% as on today [2.5% CGST + 2.5% SGST] - in the present case, the supply of the said items are intended for “Solar Power Generating System”, hence the entire supply would fall under composite supply in as much as “Solar Power Generating System”, is predominant element in composite supply and it takes the character of the principal supply therefore all the goods should be taxable @ 5% as “Solar Power Generating System”.

Reliance placed in the CESTAT judgment Rajasthan Electronics & Instruments Ltd. Vs CCE [2004 (7) TMI 259 - CESTAT, NEW DELHI], where it was held that Solar Photovoltaic Module is a Solar Power Generating System. Other parts are only panel housing consisting of controllers and switches. Hence the whole system is a Solar Power Generating System and is entitled for the benefit of notification. Therefore, the denial of benefit of notification by the adjudicating authority is not sustainable.

The items which are used in connection with generation of power from sunlight are covered under the definition of “Solar Power Generating System”. Accordingly solar inverter & solar panel used for specified purpose i.e. generation of power from sunlight, will be covered under serial no. 234 of Schedule-I of the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017, the applicable rate of GST on such supply will be 5% [2.5% CGST + 2.5% SGST]. In this context also, the supply will be treated as “composite supply’.

Ruling:- Supply of solar inverter, controller, battery and panels would covered under “Solar Power Generating System” as a whole in terms of serial no. 234 of Schedule-I of the Notification No. 01/2017 -Central Tax (Rate) dated 28.06.2017 when supplied for said purpose and the applicable rate of GST on such supply will be 5% as on today [2.5% CGST + 2.5% SGST] and such supply will be treated as “composite supply”.

Supply of solar inverter & solar panels together will fall under the definition of “Solar Power Generating System” (if the same are used for said specified purpose) in terms of serial no. 234 of Schedule-I of the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 and the applicable rate of GST on such supply will be 5% as on today [2.5% CGST + 2.5% SGST] and such supply will be treated as “composite supply”.

The aforesaid findings are applicable for both manufactures and traders engaged in said supply.