TMI Blog2021 (4) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... se, as can be seen from the wordings, the supply of DC cables by the applicant is to be accompanied by services such as packing and forwarding transportation alongwith transit Insurance. In the instant case, any decision on the issue cannot be taken, since the applicant has failed to provide the documents such as contract/agreement/tender. It is thus concluded that in view of non-submission of the documents such as contract/agreement/tender by the applicant and without going through the conditions/provisions envisaged in the documents, it will not be possible to take a decision in the matter. - GUJ/GAAR/R/02/2021 - - - Dated:- 20-1-2021 - SANJAY SAXENA AND MOHIT AGRAWAL, MEMBER Present for the applicant : Shri Amal Dave BRIEF FACTS 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 cable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. 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., dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as value of the said taxable service. 4. The applicant has further submitted that these Solar DC Cables are manufactured as per the design, specification and standard provided by the Solar Power Project Authority, and are supplied solely predominantly for use as Parts for the manufacture of said Solar Power Generating System; that these cables have no other intended use or multiple-use, other than for use as Parts in the manufacture of Solar Power Generating System ; that for manufacturing these quality cables of the international standard for use in Solar Power Projects, they have been accorded with the permission, certification and approval from the International Authority i.e. TuV to manufacture as per EN-50618:2014 specs which is exclusively for the Solar application products; that a detailed technical specification, standard and various Parameters of the subject cables that needs to be complied with is given in the Technical Write-up which is submitted; that CBIC/Board has already clarified vide Circular No.80/54/2018-GST dated 31.12.2018 at Para 11.2 thereof that the Notification specifically applies only to the goods falling under chapters 84, 85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the Applicant is accredited /approved / certified by the International Authority TuV , to manufacture as per EN-50618:2014 specs which is exclusively for the products for Solar Power applications, and said goods has no other intended use and application and hence the benefit of concessional rate of 5% must be given/allowed. 6. The applicant has asked the following question seeking Advance Ruling on the same: Whether the applicability or determination of liability to pay Tax on our said goods at 5% GST rate is legally correct and in order in terms of Schedule-I to the Notification No.01/2017-Integrated Tax(Rate) or not. 7. Further, in pursuance of the personal hearing held on 23.12.2020, the applicant vide their additional submission (submitted to this office on 29.12.2020) have stated that during the course of hearing held on 23.12.2020, they were requested to submit additional documents to show that the PO placed by M/s. Adani for DC cables was accepted; that a copy of the tender awarded to M/s. Adani for setting up solar power projects was also asked to be submitted within 3 days; that they have submitted copies of various e-mails exchanged in-between the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame is capable of being separated for repairs and replacement. They have also stated 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.01/2017-Integrated Tax(Rate) dated 28.06.2017. The applicant has submitted photocopies of Purchase Orders bearing No.4500328493 dated 03.07.2020 (involving supply of DC Cables worth ₹ 4,99,32,960/-inclusive of GST@5%)and No.4500327829 dated 17.06.2020 (involving supply of DC Cables worth ₹ 7,55,23,602/- inclusive of GST@5%) received from M/s. Adani Green Energy ltd., Rajasthan confirming the applicability of concessional rate of GST @5% . 11. Based on the submissions of the applicant, photocopies of the various documents submitted by them as well as the arguments/discussions made by the representative of the applicant during the course of personal hearing, we find that the main issue to be decided is whether the applicability or determination of liability to pay Tax on their goods namely DC cables that are used as integral parts in the Solar Power Generating System at 5% GST rate in terms of Sr.No.234 of Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants / devices (f) Solar lantern / solar lamp (g) Ocean waves/tidal waves energy devices/plants 14. On going through the provisions of the above entry, we find that it covers renewable energy devices as well as parts (covered under Chapters-84,85 and 94 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) for their manufacture and the list includes ( a) Bio-gas plant (b) Solar power based devices (c) Solar power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants / devices (f) Solar lantern / solar lamp (g) Ocean waves/tidal waves energy devices/plants. As per the submission of the applicant, the DC cables manufactured and supplied by them are to be used as parts in the manufacture of Solar Power Generating System. Thus, in order to avail the benefit of said notification entry as above, applicant has to satisfy two conditions namely, that the goods must be covered under Chapter Heading 84, 85 or 94 and secondly the goods shall satisfy the description renewable energy devic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stem the solar panel is directly connected to inverter and this inverter then feeds the grid with same voltage and frequency power. (iii) Controller : This is not desirable to overcharge and under discharge a lead acid battery. Both overcharging and under discharging can badly damage the battery system. To avoid these both situations a controller is required to attach with the system to maintain flow of current to and fro the batteries. (iv) Battery : The battery is charged by solar electricity and this battery then feeds a load directly or through an inverter. In this way variation of power quality due to variation of sunlight intensity can be avoided in solar power system instead an uninterrupted uniform power supply is maintained. 15.1 The applicant is supplying DC cables to be used as parts in the Solar Power Generating System. The use/function of the DC cables in a Solar Power Generating System is as under: They are connected on DC side of the system. Cables used for connecting individual PV modules in a string to form a PV generator are called as string cables, and all strings in parallel are connected to generator junction box. The main DC cable connec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V for 25 years working life. As most of the solar plants are set up where Sunlight is having good intensity, these cables can be used in high ambient temperature of up to 60 Deg C and can operate to maximum operating temperature of 120 Deg C. These cables can also be used in cold conditions as low as - 40 Deg C. All Solar projects have to use such cables that are TuV certified to make them bankable with the financing bodies. The EN: 50618 specs is exclusively for the Solar application. These Solar DC cables are printed on its surface mentioning Solar Cables as per EN: 50618 and its size. These cables are exclusively used for Solar application and do not have any other use. Low Voltage DC XLPE Cables The XLPE cables are used on DC side from Combiner box to Inverters. These cables as per IS: 7098 (Part-I) are generally Single core cables with Aluminium or steel strip/wire armouring. The commonly used sizes of these single core cables are 240/300/400 sqmm. These cables are also having an expected life of 25 years. Low Voltage AC XLPE Cables The XLPE cables are used from Inverters to step up Transformer. These cables as per IS: 7098 (Part-I) are generally Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. In this regard, while discussing the issue regarding Waste to Energy Plant and the scope of entry No.234 of Schedule-I of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017, the Board clarified as under: 11. Applicability of GST on supply of Waste to Energy Plant: 11.1. Representations have been received regarding applicable GST rate on the goods used in the setting up of Waste to Energy plants (WTEP) in term of Sr. No. 234 of Schedule I of Notification No 1/2017-Central Tax (Rates) dated 28th June, 2018. The said entry 234 prescribes 5% rate on the following renewable energy devices parts for their manufacture: (a) Bio-gas plant (b) Solar power based devices (c) Solar power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants / devices (f) Solar lantern / solar lamp (g) Ocean waves/tidal waves energy devices/plant (h) Photo voltaic cells, whether or not assembled in modules or made up into panels. 11.2 The notification specifically applies only the goods falling under chapters 84, 85 and 94 of the Tariff. Therefore, this concession would be available only to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use no.3.0 of General Conditions of Contract , of Tender Document shall read as: 1.1 The scope of Work under this Contract broadly covers complete Supply of DC Cable including packing and forwarding transportation with transit Insurance on F.O.R. Site basis for the above mentioned subject Project. 1.2 The detailed Scope of Supply shall be as per, Technical Specification , subsequent Clarifications issued on Tender Document(if any) various correspondences exchanges as referred above. In case of any ambiguity in the documents, the later document shall prevail. 1.3 The Seller shall, unless specifically excluded in the Contract, shall perform all such work and/or supply, all such items and materials not specifically mentioned in the Contract but that can be reasonably inferred from the Contract as being required for attaining completion of the Works/Facilities as if such work and/or items and materials were expressly mentioned in the Contract. 17.1 On going through the above, we find that in point 1.1 mentioned above, there is a specific mention of the word Contract whereas in point 1.2 above, it is specifically mentioned that the detailed Scope of Supply is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove and in the event of non-submission of the aforementioned documents by the applicant, it would not be possible for us to take a decision in the matter since the issue in hand covers supply of goods such as cables for the Solar Power Generating System and after going through the details mentioned in points 1.1 to 1.3 above, there appears to be a distinct possibility of supply of services being involved in the instant case, along with the supply of goods and in such an eventuality, the nature of the transaction as well as the aspect of GST liability thereon are likely to be completely different. There is also every likelihood of such supply of goods i.e. DC cables for Solar Power Generating System being accompanied by services such as assembly, installation of the cables with all fittings and accessories etc. Even otherwise, as can be seen from the wordings in point 1.1. above, the supply of DC cables by the applicant is to be accompanied by services such as packing and forwarding transportation alongwith transit Insurance. 17.2 In this context, we would like to refer to the amendment made to Entry No.234 of Schedule-I of Notification No. 01/2017-Integrated Tax (Rate) dated 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ystem (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants/devices (f) Ocean waves/tidal waves energy devices/plants Explanation :- This entry shall be read in conjunction with Serial Number 234 of Schedule I of the Notification No. 1/2017-Integrated Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i), dated 28th June, 2017 vide GSR Number 666(E), dated 28th June, 2017. 18 The explanation to the entry provides that the changes have to be read in conjunction with Serial Number 234 of Schedule-I of Notification No.1/2017-Integrated Tax (Rate) dated 28.06.2017. 17.3 A conjoint reading of the two aforementioned notifications requires that after 1-1-2019 the supply is taxable on the values worked out separately for goods and services under both Entry No.38 of Notification No.8/2017-Integrated Tax (Rate), dated 28-6-2017 (as amended by Notification No. 28/2018-Integrated Tax (Rate), dated 31-12-2018) and Entry No. 234 of Schedule I of Notification No. 1/2017-Integrated Tax (Rate), dated 28-6-2017 (as amended by Notifica ..... 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