TMI Blog2020 (9) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of multiple solar cells - Chapter Note 9 of Chapter 85 states that for the classification of the articles defined in this Note, headings 8541 and 8542 shall take precedence over any other heading in this Schedule, except in the case of heading 8523. As such, the four digit HSN of Solar Power Generating System is 8541. What constitutes solar power generating system under chapter 85, what are the various components and technical requirements that together constitutes solar power generating system under chapter 85? - HELD THAT:- The Ministry of New and Renewable Energy (MNRE) in various instances has also approved entire BOQ consisting of various parts e.g. cables, module, monitoring structures, spares etc. as essentials of Solar Power Generating System - Solar Panel, Inverter, Controller and Battery are essential components of 'Solar Power Generating System'. But, we also hold that cable monitoring structures are supplementary components of 'Solar Power Generating System'. - UP ADRG 65/2020 - - - Dated:- 17-9-2020 - SHRI ABHISHEK CHAUHAN AND SHRI D.K. VERMA, MEMBER Represented by : Ms. Anupam Varshney (Proprietor), Mr. AbhayAgarwal (C.A.) ORD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents and technical requirements that together constitutes solar power generating system under chapter 85? 1.1 In this regard, it is submitted that the term Solar Power Generating System has not been defined under GST Act. However, it is learnt that the similar issue has been decided in the case of M/s Fermi Solar Farms Private Limited passed by AAR Maharashtra Order No.GST-ARA-03/2017/B-07 dated 03.03.2018 (available on http://gstcouncil .gov.in/rulings-by-advance-authority) where the Hon'ble AAR has stated the meaning of term Solar Power Generating System and applicability when all goods (including PV Modules) are supplied. It is noted in said ruling that: 1.2 Solar Power Generating System are the system which absorb sun light and Convert it into electricity which can be put to further use; 1.3 that Solar Power Generating System has been defined under solar power-Grid connected ground mounted and solar rooftop metering regulation 2014 issued by State of Goa. Solar Power Generating System as per the regulation means a grid connected solar generating station including the evacuation system upto the grid interconnection point. ; 1.4 that typically th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled for the benefit of exemption Notification and allowed the appeal with consequential relief; 1.9 that in M/s Phenix Construction Technology v/s Commissioner of Central Excise and Service tax Ahamadabad -II [ 2017-TIOL-3281-CESTAT-AHM] the question under consideration was whether the structure and the part of structure cleared for initial setting of solar power plant are eligible for the benefit of Notification No. 15/2010-CE. The point of dispute in the said case law was that whether the aforesaid goods qualify as component of the solar power plant. Hon'ble CESTAT has decided that the item required for initial setting up of the plant would be qualify as component; hence the benefit of exemption would extend to such item also as per Solar Power Generating System. ; 1.10 that in Jindal Strips Limited v/s Collector of Customs Bombay [2002-TIOL-347-CESTAT-Del-LB] CESTAT has observed that component means a constituent part or element. It was also observed that component means one of the parts or sub-assemblies, of which a manufactured product is made up and into which it may be resolved and includes an accessory (or attachment); 1.11 that Ministry of New a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inverter, Controller, Battery and panels would covered under Solar Power Generating System as a whole in terms of Sl No. 234 of Schedule-I of the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 when supplied for said purpose and applicable rate of GST on such supply will be 5% [2.5% CGST+2.5%SGST] and such supply will be treated as composite supply. In view of above, this office is of opinion that the combination of solar panel, solar battery and charge controller may qualify as Solar Power Generating System 3. Question No.2:- Under Chapter 85 what is the correct 4 digit HSN code classification for solar power generating system? 3.1 In this regard, it is submitted that, since, there is no specific heading available for Solar Power Generating System in HSN, therefore, the classification upto 4 digit is not readily available. Moreover, as per Notification No.1/2017-Central Tax (Rate) dated 28.06.2017 w.e.f 01.07.2017 the Solar Power Generating System has been mentioned along with other renewable energy devices under Chapter 84 or 85. 3.2 Regarding 4 digit HSN code it is submitted that as per Customs export data the 4 digit HSN code used for Solar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assembled in modules or panels ------------ 85414012- Solar cells, assembled in modules or made up into panels 10. As per Rule 2b of General Rules for interpretation of the first schedule (Import Tariff), any reference in a heading to a material / substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. As per Rule 3a of the said Rules of interpretation, the heading which provides the most specific description shall be preferred to heading having more general description. According to Rule 3b of the Rules of interpretation, in case Rule 3a is not applicable, the goods shall be classified as if they consisted of the material/ raw material which give their essential character. In the applicant's case, the essential character to Solar Power Generating System is Solar Panel consisting of multiple solar cells as also held by Advance Ruling Authority of Uttarakhand (supra) in case of M/s Eapro Global Limited, Roorkee. Further, Chapter Note 9 of Chapter 85 states that for the classification of the articles defined in this Note, headings 8541 and 8542 shall take precedence over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Battery are essential components of 'Solar Power Generating System'. But, we also hold that cable monitoring structures are supplementary components of 'Solar Power Generating System'. 14. In view of the above discussions, we, both the members unanimously rule as under; RULING 15. Question:- Under Chapter 85 what is the correct 4 digit HSN code classification for solar power generating system? Answer :- The 4 digit HSN code of 'Solar Power Generating System' is 8541. Question:- What constitutes solar power generating system under chapter 85, what are the various components and technical requirements that together constitutes solar power generating system under chapter 85? Answer :-- Solar Panel, Inverter, Controller and Battery are essential elements of 'Solar Power Generating System' and supply of aforesaid four items as a whole would cover under the 'Solar Power Generating System'. But, cable monitoring structures are also supplementary elements of 'Solar Power Generating System'. 16. This ruling is valid only within the jurisdiction of Authority for Advance Ruling Uttar Pradesh and subject to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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