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July 21, 2022

Solar DC cables supplied for solar power generation system is liable to be taxed at 12% GST

by CA Shivam Jaiswal in GST

Solar DC cables supplied for solar power generation system is liable to be taxed at 12% GST

Facts and Issues of the case

The appellant has submitted that they are manufacturer and supplier of various
goods such as Power/Electric cables, House w. cables, Marine/pressure tight cables and non-pressure tight cables, Solar DC cables, XLPE (H cables etc. falling under
Chapter Heading 8544 of the Customs Tariff Act and that they received purchase orders from Solar Power Generating Projects such as Mis Mani Green Energy Ltd, Adani’s Mundra Solar PV Ltd etc. for supply of “Solar DC Cables” for use as parts in the manufacture of Solar Power Generating System.

The appellant has submitted that Entry at Sr.No. 234 of Schedule-I of Notification
No. 01/2017- Integrated Tax (Rate) provides that goods, falling under Chapter 84, 85 or 94, if used as Parts for the manufacture of renewable energy devices such as Solar Power Generating System, will attract concessional rate of 5% of IGST [or 2.5% each of CGST & SGST]. The appellant further submitted that CBIC clarified that the notification specifically applies only to the goods falling under chapters 84, 85 and 94 of the Tariff: that the goods Solar DC Cables, manufactured and designed by them for use as parts in the manufacture by Solar Power Projects falls under Chapter 85 which is covered under Sr.No. 234 of Notification No. 01/2017- Integrated Tax (Rate) and benefit of concessional rate of GST at 5% is admissible to them.

Observations by the Court

The Court has carefully gone through and considered the appeal and written submissions filed by the appellant, submissions made at the time of personal hearing, Advance Ruling given by the GAAR and other material available on record.

It is clearly expressed that (0 GST is self -assessed which means if a taxpayer/supplier is claiming exemption/concession under any notification issued under GST Act, he has to satisfy himself that he fulfills the mandatory conditions for claiming the same, onus to prove that he is eligible for such exemption/concession lies on that taxpayer, Therefore, we find that it cannot be construed to include only `supply contracts/order’ but it will include all such documents which can satisfy the supplier regarding usage of their goods by their buyers. In the present case we find that appellant has received purchase orders No. 4500328493 from Mundra Solar PV Limited and No.4500327829from Mis. Adani Green Energy Ltd., for supply of Solar DC Cables. They have accepted the said purchase orders and as discussed above the said purchase orders are a valid contract based on which the appellant can claim exemption/concession for their supplies under referred entry no.234.

Further we find that the Entry No. 234 appearing under Schedule-I which provides applicable rate of GST at 5% on supplies of renewable energy devices & parts for their manufacture viz. Solar power generating system, falling under Chapter 84.85 or 94, was omitted which provides for applicable rate of GST at 12%. The description of renewable energy devices & parts for their manufacture viz. ‘Solar power generating system’ appearing at entry No. 234 of schedule-I now stands amended as ‘Solar power generator’ under Entry No. 201A of schedule-II.

 Therefore we find that the product in question viz. Solar DC Cables supplied for Solar Power Generating System, classified under Chapter 85, forms integral part of Solar Power Generating System is eligible for benefit of entry at Sr.No. 234 appearing under Schedule-I to Notification No.01/2017- Integrated Tax (Rate) and liable to be taxed @ 5% GST. Thereafter the same will be covered under entry Sr.No. 201A appearing under Schedule-II and liable to be taxed @12% GST. The product Solar DC Cables to be used in the manufacture of Solar Power Generating System/ Solar Power Generator is eligible for benefit of Entry at Sr.No. 234 under Schedule-1 of Notification No.01/2017- Integrated Tax (Rate) and liable to be taxed at 5% GST and thereafter under Entry at Sr.No.201A of Schedule-II of Notification No.01/2017-IT (Rate) amended vide Notification No. 08/2021-IT (Rate) and liable to be taxed at 12% GST.

Conclusion

The DC solar cables supplied for solar power generating system is liable to be taxed at 12% GST

In-re-Apar-Industries-Limited-GST-AAAR-Gujarat-Advance-Ruling

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