TMI Blog2023 (3) TMI 1247X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Goa. As per this regulation Solar Power Generating System means a grid connected solar generating station including the evacuation system upto the grid inter connection point . A solar power plant produces electricity directly from sun by the interaction of sunlight with a solar panel made of semiconductor material. The power provided is direct current (DC) electricity. A solar power plant consists of an array of modules generating DC electricity, an inverter and sometimes battery storage back up. The applicable GST Rate for supply of equipment for a solar power generating system (composite supply) will be 12% (The value can be equivalent to 70 % of the plant cost). However, for installation and engineering services, EPC companies and installers will need to raise a separate works contract equivalent to 30 % of the overall bill with a GST rate of 18%. - HR/ARL/17/2021-22 - - - Dated:- 24-8-2022 - SUNDER LAL AND KUMUD SINGH, MEMBER 1. APPLICANT'S ELIGIBILITY FOR SEEKING AN ADVANCE RULING: 1.1 To file an application before the Authority of Advance Ruling, the applicant must satisfy the conditions prescribed under the Central Goods and Services Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oring solar power. A solar inverter or PV inverter is a type of electrical converter which converts the variable direct current (DC) output of a photovoltaic (PV) solar panel into a utility frequency alternating current (AC) that can be fed into a commercial electrical grid or used by a local, off-grid electrical network. It is a critical balance of system (BOS) component in a photovoltaic system, allowing the use of ordinary AC-powered equipment. Solar power inverters have special functions adapted for use with photovoltaic arrays, including maximum power point tracking and anti-islanding protection. Battery : That 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. B. The applicant has seeks an advance ruling from the Authority of Advance Ruling(GST), Haryana on the following issues :- Question -1. Whether the solar inverter manufactured by the applicant fall under entry no. 234 of Schedule -I of the Notification 1/2017 - Central t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r inverters have special functions adapted for use with photovoltaic arrays, including maximum power point tracking and anti-islanding protection. That the solar inverters are itself capable of generating solar power and is a solar power generating system in itself. The entry no 234 of the schedule I of the Notification No. 01/2017-Central Tax (Rate), dated 28-06-2017 covers the solar power generating system in its ambit. Accordingly the Solar inverters fall within the ambit of entry no 234 of the schedule I of the Notification No. 01/2017-Central Tax (Rate). It is submitted that in case of COMMISSIONER OF CUSTOMS, COCHIN VS. SOLGEN ENERGY PVT. LTD. 2018 (364) E.L.T. 678 (Tri. - Bang.) it has been held by the Hon'ble Tribunal that Solar inverter if exposed to sunlight, performing function of generating electricity covered within description 'Solar Power Generating System. Relevant extract of the judgment is reproduced below for ready reference: SI. No. 332 of the Notification grants the benefit to non-conventional energy devices or system specified in the list. From the list A, we find that SI. No. 10 of the list covers solar power generating system . The go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lead acid battery (iv) Compact fluorescent lamp. On a very careful consideration of the issue, we find that the exemption notification exempts from Central Excise duty the following items:- (i) Solar voltaic module (ii) Solar power generating system (iii) Solar lantern. In the present case, the appellants have claimed exemption in respect of inverter charger card as solar power generating system. The appellants actually manufactured SPV lantern. The above lantern required electricity for its working. It is possible to convert solar energy to electricity with the help of inverter charger manufactured by the appellants. The Dy. General Manager has certified that the inverter merger constitutes solar power generating system as it performs the function of generating the required high frequency AC power from Sun-light with, the help of SPV module and supplying it to the compact fluorescent lamp of a solar lantern. In view of the above, expert opinion, we hold that the impugned item can be considered as solar power generating system and is entitled for of the benefit of the exemption Notification. Therefore, we allow the appeal with consequential relief. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II. Section 7(1) defines the term supply to include transactions such as sale, lease, transfer, rental etc in the course or furtherance of business and to constitute supply the transaction must be for consideration. In present case, the given transaction shall qualify as supply. However, as the supply involves different components and therefore question arises whether the same shall constitute as single supply or together as composite supply or to be treated as individual supplies? The term 'Composite Supply' is defined under Section 2(30) of CGST Act. The term Composite Supply means combination of two or more supplies which are naturally bundled and supplied in conjunction with each other wherein one of the supplies is principle supply. Section 2(30) of CGST Act reads as follows: composite supply means a 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 natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /o SGST] and such supply will be treated as composite supply . (iii) The aforesaid findings are applicable for both manufacturers and traders engaged in said supply . In the another similar AAR ruling passed by Maharashtra Authority in case number GST-ARA-03/2017/B-07 dated 03.03.2018 it has been upheld that Supply of Solar Invertor, controller, Battery and panels would covered under Solar Power Generating Systems as whole in terms of Sr. 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. On perusal of above advance ruling it is clear that the solar panel, battery and solar inverter if supplied together shall qualify 'solar power generating system' and considered as composite supply. Accordingly, the same shall fall within the ambit of serial No. 234 of Schedule-I of the Notification No. 01/2017-Central Tax (Rate), dated 28-6-2017 and the applicable rate of GST on such supply will be 12% [6% CGST + 6% SGST]. In view of above submissions we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing tools and a monitoring system for the overall performance. The energy from the sun is collected by the panels that send the converted energy into the inverter from which one can utilize electricity. We find that there are four main components of a solar power generating system as under:- (i) Solar panels: The main part of a solar power generating system is the solar panel. Solar panels contain solar cells. Solar cells, sometimes called photovoltaic cells, convert the energy of the sun into electricity. They are made of solar cells and are connected in series. They are made of semiconductor material that converts sunlight into electrical energy. (ii) Inverters: The electricity produced in a solar panel is DC. Electricity we get from the grid supply is AC. So it is required to install an inverter to convert DC of solar system to AC of same level as grid supply. In off grid system the inverter is directly connected across the battery terminals so that DC coming from the batteries is first converted to AC then fed to the equipment. In grid tie system the solar panel is directly connected to inverter and this inverter then feeds the grid with same voltage and freque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable supplies of goods or services or both, or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; (ii) Section 2(74) of the Act ibid mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. (iii) Section 2(90) of the Act ibid principal supply means the Supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; (iv) Section 8 of the Act ibid: The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:- (a) 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; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. 6.4 T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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