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TMI Blog2022 (6) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 liable to CGST at 2.5%? OR b) Entry number 395 of Schedule III of Notification No. 1/2017- Central Tax (Rate) (as amended) dated 28 June 2017 liable to CGST at 9%? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT 2.1 M/s Leoni Cable Solutions India Pvt. Ltd. ('applicant' or 'Company'), a subsidiary of LEONI kabel GmbH (formerly, LEONI Kabel Holding GmbH) ('group Company'), manufactures & supplies solar cables commonly known as photo-voltaic DC cables ('PVDC cables') under various brand names. 2.2 The said cables are made from copper conductor with Cross-linked Polyolefin (XLPO) insulation & are used between solar modules & inverters in a photovoltaic system. The most relevant heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) of Entry number 234, the goods must be covered by Chapter Heading 84, 85 or 94; and secondly, the goods should satisfy the description "renewable energy devices" & parts for their manufacture in the instant case parts for manufacture of SPGS. There is no doubt that the subject cables are covered under Chapter 85 but whether the impugned solar cables can be termed as a part for manufacturing of SPGS/EPC Company setting up a solar power plant. 2.8 The term 'Power' is not defined in the GST Acts/Chapter Section Notes of CTA. Therefore, reliance is placed on "The Electricity Act' 2003" which defines the term 'Power system" as under: "Power System' means all aspects of generation, transmission, distribution and supply of electricity and includes one or more of the following namely:- a) Generating stations; b) Transmission or main transmission lines; c) Sub-stations; d) Tie-lines; e) Load dispatch activities; f) Mains or distribution mains; g) Electric supply - lines; h) Overhead lines; i) Service lines; and j) Works; Thus, the term 'Power' means electricity and therefore the term 'Solar Power' means the electricity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EPC Company setting up a solar power plant. Hence, it is can be said that PV DC cables are used for connecting & transferring energy between solar panels/ array & inverters. It is pertinent to note that if cables are not connected within the system then there would be no flow/ transfer of power from one point to another. Thus, these cables construe as an integral part of system without which the whole system cannot function and operate. 2.15 It is submitted that the word 'cables' should be understood in the same sense as it is understood by Common man & which is used to connect modules & inverter without which the whole system would be inactive. Therefore, considering cables as an integral part of SPGS, the second condition for classifying under Entry number 234 is also satisfied. 2.16 Therefore, the term 'Solar Power Generating System' would subsume all devices and parts used in its manufacturing. Therefore, the PV DC cables being parts of SPGS would be classified as per Entry number 234 of Schedule I of Notification No. 1/2017 CTR liable to CGST at 2.5%. 2.17 Applicant submits that the Purchase Order ('PO') received from its Customers clearly mentions & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onounced by Uttarakhand AAR, In case of Eapro Global Limited d) Advance Ruling pronounced by Haryana AAR, in case of M/s. Boldrocchi India Pvt. Ltd. e) Andhra Pradesh AAR, in case of M/s. Enexio Power Cooling Solutions India Pvt. 2.23 Judicial Precedent Reliance is also placed on judgement of Madhya Pradesh - High Court in the case of Belectric Photovoltaic India P. Ltd (2018) which pertains to VAT exemption under erstwhile Madhya Pradesh VAT Regulations. The concerned VAT exemption entry is similar to entry number 234 mentioned in the GST tariff. 2.24 Applicant further submits that it is settled principle that in case of two independent tariff entries, assessee can adopt beneficial interpretation unless proved otherwise. In this regard, reliance is placed on the judgment in case of CCE v. Minwool Rock Fibres (2012 (278) E.L. T. 581 (S.C.)] 2.25 Hence, applicant is of the view that the impugned PVDC Cables would be classified under Entry No. 234 of Schedule I of Notification No. 1/2017-CTR dtd 28.06.2017, liable to CGSTat2.5%. 03. CONTENTION - AS PER THE CONCERNED OFFICER: As on the date of passing of this order, the jurisdictional officer has not made any written submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 395. The first relevant Entry is Entry No 234 to Schedule I of the said Notification and the second relevant Entry is Entry No. 39 of Schedule III to the said Notification. Thus, the specific question has been raised by the applicant. 5.5 The applicant has submitted that the impugned cables fall under Chapter Heading 85.44 of the Tariff and we are in agreement with the applicant's submissions on this aspect. Further as per Explanatory Notes to CTH 85.44, provided they are insulated, the heading 85.44 covers electric wire, cable and other conductors used as conductors in electrical machinery, apparatus or installations. We now take up the applicability of Sr. Nos 234 or 395 of the Notification No 1/2017 CTR dated 28 June 2017 (as amended). 5.6 Sr. No. 234 (Schedule - I taxable @ 5% CGST) of the above mentioned notification as amended by Corrigendum dated 27.07.2017 and Notification No.24/2018-Central Tax (Rate) dated 31.11.2018 is reproduced as under:- Sr.No. Chapter / Heading / Sub-heading / Tariff item Description of Goods 234 84 or 85 Following renewable energy devices & parts for their manufacture (a) Bio-gas plant (b) Solar power based devices (c) Solar power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hoto Voltaic Systems are used to generate electricity from sunlight which can be further used as electrical energy. The submissions made by the applicant clearly show that the impugned cables are connected between the SGPS and Inverters. In other words, the applicant is clearly stating that the impugned cables are not a part of the SGPS i.e. the actual System which generates electricity from Sunlight. The impugned cables as per the application have no part to play in the generation of Solar Power which is the function of SGPS. These cables only transfer the electrical energy generated by the SGPS, to the Inverters where such electrical energy is stored for further use. 5.6.5 In houses and offices, etc. ceiling fans are used for providing breeze in such spaces. The fan is operated by way of electrical energy which is transferred to the said fans by way of electric wires, from the electrical switches. Just because the wires are used to transfer electrical energy to operate the fans, they are not considered either as parts of fans or as part of the switches from where electricity is received to be transferred to the fans. In a similar way as per the submissions made, the impugned cab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors." 5.7.3 From a reading of para nos 5.7, 5.7.1 and 5.7.2 we observe that the description of goods in Sr. No. 395 exactly tallies with the Tariff Entry 85.44 which goes to show the intention of the government to classify the impugned goods under Sr. No. 395 of Schedule III of Notification No. 01/2017 CTR dated 28.06.2017 as amended from time to time. 5.7.4 However, Notification No. 41/2017 - CTR dated 14.11.2017 is effective from 14.11.2017. Prior to this date Sr.No. 395 of Notification No. 01/2017 - CTR dated 28.06.2017 covered only Winding wires; coaxial cables; Optical Fiber (Chapter 85.44) and there was another Heading at Sr. No. 161 of Notification on No. 01/2017 - CTR dated 28.06.2017 which covered the impugned cables. The relevant Sr. Nos are reproduced as under:- Schedule III-18% GST Sr. No. Chapter / Heading / Sub-heading / Tariff item Description of Goods 395 8544 Winding Wires; Coaxial cables; Optical Fiber Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X
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