TMI Blog2018 (11) TMI 1826X X X X Extracts X X X X X X X X Extracts X X X X ..... ts classification chapter heading 8479 and also qualifies as a solar power based device in terms of sub-clause (b) of Entry no, 234 of Notification no. 1/ 2017 integrated Tax (Rate) dated 28 June 2017 (as amended from time to time) liable to GST @ 5% - Apart from supply of robotic cleaning system the applicant Is also engaged in installation of same. Hence, the applicant has also raised the question as to whether the supply of RCS along with provision of ancillary services, erection and commissioning services) by the Applicant construes as a Composite supply as per Section 2(30) of the CGST Act. In the instant case, indeed there are two supplies. Firstly, there being a supply of goods, i.e. robotic cleaning systems which qualifies as solar power based device in terms of sub-clause (b) of Entry no, 234 of Notification no. 1/2017 integrated Tax (Rate) dated 28 June 2017 (as amended from time to time) liable to GST @ 5%. Secondly it is supply of service also, related to installation, erection commissioning services of the said robotic cleaning systems supplied by the applicant. Therefore, the same comprises of two supplies and one of which, that is supply of robotic cleani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical up-and-down movement, and one motor operating the rotation of the microfiber elements. To maintain a smooth sustainable upward and downward movement, the E4 robot uses a winch system with two coated silicon rubber wires that operate angularly from opposite sides of the winch cylinder to the centre point of the microfiber cylinder frame; 4. When not cleaning, robots are securely locked in their docking stations (which serves also as the charging station) outside of the solar PV row, protected from the elements and strong winds. Charging occurs during the day while the robots are docked, with a full battery charge typically supporting 3 sequential cleaning cycles - ensuring that the E4 will be available to clean even during extended cloudy periods or dust storms. Ecoppia s patented Eco-hybrid technology further increases the energy efficiency of the system by capturing potential energy of the robots during their descent on the solar panels and converting it to kinetic energy, decreasing lost energy and extending the useful battery life. Upon completion of a cleaning descent, the [4 robot performs a rapid auto-clean of the Micro fiber elements before ascending the panel again. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Tariff) reads as follows: Tariff Item Description of Goods 8479 MACHINES AND MECHANICAL APPLIANCES HAVING INDIVIDUAL FUNCTIONS/ NOT SPECIFIED OR INCLUDED ELSEWHERE IN THIS CHAPTER 8479 50 00 - Industrial robots, not elsewhere specified or included 84799090 --- Other Explanatory notes to Chapter 84 clearly states Subject to Note 2 to this Chapter and Note 3 to Section XVI, a machine, the principal purpose of which is not described in any heading or for which no one purpose is the principal purpose is, unless the context otherwise requires, to be classified in heading 8479. Further, Explanatory notes to HSN classification state as follows w.r.t Industrial robots: Industrial robots for multiple uses, industrial robots are automatic machines which can be programmed to carry out repeatedly a cycle of movements. By the use of sensors, industrial robots are able to acquire information about the field in which they operate and to analyse the information thus obtained to be able to ado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the sun; produced by the sun . Further the term device has been defined in the Law Lexicon Dictionary as that which is devised or formed by design; a contrivance; an artificial contrivance. So also the term has been variously defined as meaning an invention; a stratagem, a project, and artifice, also, used to denote hearing or emblematic representation or motto; Further, the scheme of the central Excise Tariff is based on Harmonised System of Nomenclature (for short HSN ) and the explanatory notes thereto Therefore HSN along with the explanatory notes provides a safe guide for interpretation of an entry Even under erstwhile regime solar power based devices have not been defined under any law. However, under erstwhile Excise law, various exemptions were extended to non-conventional energy devices which included Solar photovoltaic module and panel for water pumping and other applications - List 8 of Notification no. 12/2012- Central Excise, dated 17 March 2012. The intent of law seems to be clear to provide benefit to solar power based devices. Further, it is an accepted rule of interpretation that when an expression is not defined in the Act, natural and ordinary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , connected to it; Left and right wheel assemblies - The wheels enable the movement of the frame and the robotic unit horizontally alongside the array; iii. Rotational cleaning Cylinder assembly (Cleaning apparatus) - The cleaning apparatus consists of two rotational cylinders with microfiber fins. A motor drives the unit with a belt system and aluminum wheels. Cables drive the cleaning system upward and downward the main frame; iv. Winch Assembly it includes a drum cylinder which is connected to the cables that are rolled up upon it. A cable arrangement between the winch and the cleaning apparatus ensures an orderly rolling of the cables on the winch drum. The drum is driven by two motors-generators. When the cleaning apparatus moves upward, the motors operate as regular DC motors, when the cleaning apparatus moves downward, the two DC motors operate as DC generators that control the rate of the cleaning unit while using the generated electricity to charge the batteries The motors generators are connected to the drum through design belts speed reduction transmission; v. Horizontal drive assembly- Horizontal drive unit is assembled on the upper par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply Thus, in case of composite supply, the rate applicable on the principal supply applies on the entire bundle of taxable supplies. d. Section 2(119) of CGST Act defines Works contract as follows: a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. e. Schedule II clause 6 of GST law states as under: The following composite supplies shall be treated as a supply of services, namely:- (a) works contract as defined in clause (119) of section 2 ; Therefore, works contract has been deemed to be supply of service under GST. The general rate of GST on works contracts is 18%. 8.3. From the definition of composite supply in terms of Section 2(30) of the CGST Act, it follows that the essential conditions for a supply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Product }, pursuant to the milestones (each a Milestone and together the Milestones ) and the time schedule (the Schedule) attached as Annexe 2.1(B) hereto . 4. Delivery and Installation; Title Ecoppia agrees to sell, assign, install, convey, handover and transfer the Systems specified in Annexure 4.1 hereto ( the System ) to the Purchaser on a date (being the System installation Date) 4.6 Title to the Products shall pass to the Purchaser upon payment of the final Milestone set forth in the Schedule , Annexure 2.1 (B)- - The Milestones and the Schedule The Milestones for the payment for the Products are as follows: 1. 25% of the Contract Price at commissioning against payment of the ABG; SPY to transfer advance amount of 25% and issue LC for balance 75%, within 7 days of receipt of ABG2 3. 50% of the Contract Price on supply of the Products at the Site; SPV3 to transfer this amount within 7 days of receipt of invoice 4. 10% of the Contract Price at installation of all the Products; SPY to transfer this amount within 7 days of receipt of invoice and 5. 15% of the Contract Price at the time of issuance of PBG, post commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responsible for accurately setting out, assembly and installation of Robotic System inspection and quality control services required to ensure that all Work is performed in accordance with this Agreement. Supplier shall be safely responsible for all construction means methods techniques, sequences procedures, safety, and security programs in connection with the performance of the Work. 3.4.3 EPC-related Work. (a) General, Supplier shall be responsible for the following (the EPC-related Work ): (i) co-ordination with the EPC Contractor s for all interface related works until Robotic Acceptance with O M Contractor thereafter. (ii) the Supplier s obligations set forth in the scope matrix attached as Exhibit B hereto ............. 2. Payment Terms: 2.1 80% of the Contract Price on pro-rota basis for each batch of units delivered and shall be payable, on delivery of the Robotic Systems at the Site as per approved billing breakup. Supplier shall be paid within 30 days from the date of submission of the following: 2.2 10% of the Contract Price on pro rata basis for each lot of Robot System within 30 days of robot commissioning for each lot of 25MWd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solar power plants! panels. Hence the entire contract for supply of RCS and its erection, commissioning and installation (both goods and services) are naturally bundled and linked wherein the main intent is sale of RCS (i.e. goods) for cleaning of solar panels. In this regard, reliance has been placed on the case of T. V. Sundram Iyengar Sons v. The State of Madras [1975] 22 SCR 372 = 1974 (10) TMI 81 - SUPREME COURT 8.8. The applicant submitted that contracts entered into, by the Applicant do not constitute Works Contract in terms of the OT legislation; that works contract is also defined as a composite contract and includes a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract; that there is no civil works for erection and installation of the RCS and as such RCS does not become part and parcel of any immovable property . Instead the contracts are entered into for sale of robots fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solar parks. Elaborate working and functioning of the said systems have been discussed in the preceding paras, on the basis of submissions made by the applicant. From the submissions of the applicant, it is observed that the said product, is working on solar power and thus, the same merits classification chapter heading 8479 and also qualifies as a solar power based device in terms of sub-clause (b) of Entry no, 234 of Notification no. 1/ 2017 integrated Tax (Rate) dated 28 June 2017 (as amended from time to time) liable to GST @ 5%. 14. Apart from supply of robotic cleaning system the applicant Is also engaged in installation of same. Hence, the applicant has also raised the question as to whether the supply of RCS along with provision of ancillary services, erection and commissioning services) by the Applicant construes as a Composite supply as per Section 2(30) of the CGST Act. 15. In this regard, it is observed that Section 2(30) of the CGST Act defines Composite supply to mean supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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