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2022 (4) TMI 1333 - AAR - GSTClassification of goods - specially designed Transformers for Wind Operated Electricity Generators which are meant to perform dual function of Step Down and Step Up manufactured by Suzlon and supplied to the customers of Suzlon as a part of Wind Operated Electricity Generator - to be treated as part of Wind Operated Electricity Generator or not - falls under Sr.No. 234 in Schedule-I to Notification No. 01/2017-Central Tax (Rate) dated 28th June, 2017 read with Notification No. 1/2017- State Tax(Rate) dated 30th June, 2017 or not - liable to Central GST at the rate of 2.5% along with Gujarat State GST at the rate of 2.5% up to 30th September, 2021 and 6% each towards CGST and SGST with effect from 1st October, 2021? Whether Transformers are part of WOEG to determine entry at sr no 201A of schedule II of said Notification? - HELD THAT:- What is forthcoming is that Transformers connect/link the WOEG to distribution network. Nothing on record substantiates that Transformers are inalienable part of WOEG. Transformer could have been considered a part of WOEG if WOEG cannot function without it. But the fact is WOEG is able to generate electricity with the kinetic energy of the wind by itself. The very acronym WOEG stands for Wind operated electricity generator. Whereas, transformers for WOEG is installed on the ground adjoining to WOEG to make the electrical energy generated by WOEG usable for consumption or distribution purpose. It is noted that the transformers are neither placed in nacelle nor tower but on the ground beside the WOEG. Suzlon’s submission in this regard that transformers are placed in nacelle/ tower at para 6 is not correct. WOEG and transformer inclusive devices to form a wind power system/ wind generating system/ project. But WOEG per se is capable of generating electricity with wind. Now if a specially designed transformer with step down function is designed to rotate the blades/fan in WOEG that does not make it a part of WOEG, but makes the transformer per se a dual function transformer with step up and step down function - the word used in the said Notification is WOEG, which is generator per se. WOEG generates electricity per se and to include the aspects of transmission, distribution and supply of electricity for which Transformer is requisite is to add extra words ‘WOEG system’ to a clearly worded Notification with the words ‘WOEG’ and not ‘WOEG system’. GST Rate on Transformers - HELD THAT:- Suzlon, Vadodara ( the applicant) is supplying Transformers directly to recipients, on Principal to Principal basis and the invoices produced are not bill to ship with reference to Transformers supplied. Also that there is no tripartite agreement between Suzlon Daman, Suzlon Vadodara (applicant) and Malaiamman (recipient). Also that Suzlon Daman has no contract/ sub contract entered with the applicant for supply of transformers to Malaiamman. Further, the phrase ‘Bill to Ship to’ is misleading and incorrect with respect to Transformers, as the ‘bill to’ by ‘Suzlon the applicant’ was not to Suzlon Daman but to Mailaiamman at Erode and ‘Ship to’ was directly by ‘Suzlon the applicant’ to Malaiamman at Tuticorin. Transformers are not part of WOEG and are leviable to CGST @ 9% vide Sr. No. 375 of Schedule-III of Notification No. 1/2017-CT (Rate) dated 28-6-2017.
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