In Re : Dinesh Kumar Agrawal
GST
2018 (6) TMI 466 – AUTHORITY FOR ADVANCE RULINGS, ANDHRA PRADESH – 2018 (13) G. S. T. L. 474 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, ANDHRA PRADESH – AAR
Dated:- 8-5-2018
Ruling No. AAR\/AP\/3O(GST)\/2018 In Application No. AAR\/05(GST)\/2018
GST
MR. J. V. M. SARMA, JOINT COMMISSIONER (STATE TAXES), AUTHORITY ADVANCE RULING, ANDHRA PRADESH AND MR AMARESH KUMAR, JOINT COMMISSIONER (CENTRAL TAXES), AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH
\nFor The Present Applicant : Applicant himself attended
\nRULING
\nMr. Dinesh Kumar Agrawal, R\/o #501, ACME Regency, 5m floor, SV Road, Vile Parle (West), Mumbai, Maharashtra (hereinafter also referred as an applicant), is an unregistered taxpayer, is engaged in erection and supply of solar power generating system by making an agreement with his customers, has filed an application on 09,h February 2018. Vide acknowledgement number VPG736416, for seeking advance ruling for the tax rates applicab<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ty. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n is supply of 'solar power generating system' under Entry 234 of Schedule I of the Notification No. 1\/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1\/2017- Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the Notification No. 1\/2017- State Tax (Rate) dated 29 June 2017? = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n m etc. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n & erection = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n s = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ent is as per milestone or monthly depending on the % of goods delivered at site. Full payment is released on successful commissioning of the plant with stipulated power generation. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ing ditch for underground cabling = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n 1 (4) reads “In case of continuous supply of goods, where successive statements of accounts or successive payments are involved, the invoice shall be issued before or at the time each such statement is issued or, as the case may be, each such payment is received”. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n y the applicant, the scope of work in respect of “Turn key EPC Contract” and “Other EPC Contract” includes civil works, procurement of goods and erection and commissioning. Accordingly, “Turnkey EPC Contracts” and “Other EPC Contracts” are not getting covered under supply of 'solar power generating system' under Entry 234 of Schedule I of the Notification No. 1\/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1\/2017- Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the Notification No. 1\/2017- State Tax (Rate) dated 29 June 2017. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n -Central tax (Rate), dated 28th June, 2017. And the supply of service attracts at the rate specified thereon in Notification No. 11\/2017 -Central tax (Rate). = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n per the Entry 25 of 25 (Heading 9987) of Notification No. 11\/2017 – Central Tax (Rate), dated : 28th June 2017, and attracts 18% rate of tax. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re : Dinesh Kumar AgrawalGST2018 (6) TMI 466 – AUTHORITY FOR ADVANCE RULINGS, ANDHRA PRADESH – 2018 (13) G. S. T. L. 474 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULINGS, ANDHRA PRADESH – AARDated:- 8-5-2018Ruling No. AAR\/AP\/3O(GST)\/2018 In Application No. AAR\/05(GST)\/2018 GSTMR. J. V. M. SARMA, JOINT COMMISSIONER (STATE TAXES), AUTHORITY ADVANCE RULING, … Continue reading “In Re : Dinesh Kumar Agrawal”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-12116","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/12116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12116"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/12116\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n 1. The Issues raised by the applicant is as follows.,
\n Issue No. 1 Whether supply of solar power plant under 'Turnkey EPC Contract' is supply of 'solar power generating system' under Entry 234 of Schedule I of the Notification No. 1\/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1\/2017- Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the Notification No. 1\/2017-State Tax (Rate) dated 29 June 2017?
\n Issue No. 2 Whether supply of solar power plant under 'Other EPC Contract' is supply of 'solar power generating system' under Entry 234 of Schedule I of the Notification No. 1\/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1\/2017- Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the Notification No. 1\/2017- State Tax (Rate) dated 29 June 2017?
\n Issue No.3 Whether supply of solar power plant under 'Supply Contract' is supply of 'solar power generating system' under Entry 234<\/p>\n
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\n Issue No.6 If the Clarification to Issue No. 5 is negative, what would be nature of supply i.e. composite supply or mixed supply?
\n Issue No.7 Whether contract for assembly, erection, and commissioning of the plant undertaken by the Applicant under a separate contract would be a service contract liable to be taxed under Service heading 9954?
\n Issue No.8 Whether the time of supply of power plant shall be determined under Section 31 (4) of the CGST Act\/SGST Act read with Section 12(2) thereof?
\nThe Issues raised by the applicant is fit to pronounce advance ruling as they falls ambit of the Section 97(2) (a), (b) and (c), they are as given under
\n (a) Classification<\/p>\n
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\n (ii) Designing, procurement and supply of all equipment\/components for the power plant
\n (iii) Assembly, erection, and commissioning
\n (iv) Operations and Maintenance of the plant between 2 to 15 years
\nIn Other EPC Contract, the Applicant is required undertake all activities of turnkey projects except civil work. The scope of work typically involves:
\n (i) Designing, procurement and supply of all equipment\/components for the || power plant
\n (ii) Assembly, erection, and commissioning
\nIn Supply Contract, the Applicant is required to supply the power plant on complete knocked down condition in piecemeal at project site. Customer engages a third party contractor or the Applicant for assembly, erection, and commissioning of the plant under a separate contract.
\nIn Balance of Plant Supply Contract, the Applicant is required to supply goods and services stated above, except solar panels. Solar panels procured by the customer are made available by the customer to the Applicant for <\/p>\n
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\n ii. Supply of nut, bolts, fasteners and other miscellaneous materials
\ne. Test & Commissioning
\nB. Equipment and components are delivered at project site and stored at the risk of the Applicant
\nC. Ownership is transferred on successful commissioning of the plant
\nD. Payment is as per milestone or monthly depending on the % of goods delivered at site
\nE. Full payment is released on successful commissioning of the plant with stipulated power generation.
\nF. Cost:
\na. In the case of Ground Base Solar Project: 20% Civil & Erection & 80% Supply. Roof Top Base Solar Project: 10% Civil & Erection & 90% Supply.
\nFor Issue number 2, the statement of facts are as follows…
\nThe scope of supply includes:
\n a. Detailed designing of power project
\n b. Procurement and supply at project site
\n i. Solar photovoltaic modules\/panels\/array
\n ii. Panel mounting structure
\n iii. Solar tracker
\n iv. Meteorological equipment
\n v. Cables
\n vi. Combiner box
\n vii. Solar power conditioning unit\n<\/p>\n
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\n vi. Combiner box
\n vii. Solar power conditioning unit
\n viii. Inverter
\n ix. Isolator
\n x. Transformer
\n xi. Switchbox
\n xii. Conductor
\n xiii. Battery
\n xiv. Transmission tower
\n xv. Steel\/plastic tubes & pipes
\n xvi. SCADA Software
\n b. Equipment and components are delivered at project site and risk is transferred to the customer
\n c. Payment is as per milestone or monthly depending on the % of goods delivered at site
\n d. Full payment is released on successful commissioning of the plant with stipulated power generation.
\nA. Scope of Erection Contract includes:
\na. Assembly & erection
\n i. Assembly & erection
\n ii. Supply of nut, bolts, fasteners and other miscellaneous materials
\nb. Test & Commissioning
\nB. Risk of Equipment and components are acquired by the Applicant during erection till successful handover of the plant to the customer
\nC. Payment is as per milestone or monthly depending on the % of goods delivered at site
\nD. Full payment is released on successful commissioni<\/p>\n
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\nFor Issue number 5, the statement of facts is as follows….
\nA. The scope of supply includes:
\na. Civil works
\n i. leveling of ground
\n ii. Wall boundary
\n iii. internal roads
\n iv. concrete foundations for mounting of panel mounting structures
\n v. digging ditch for underground cabling
\n vi. Concrete flooring for inverter\/transformer\/battery pack,
\n vii. Control room etc.
\n b. Detailed designing of power project
\n c. Procurement and supply at project site
\n i. Panel mounting structure
\n ii. Solar tracker
\n iii. Meteorological equipment
\n iv. Cables
\n v. Combiner box
\n vi. Solar power conditioning unit
\n vii. Isolator
\n viii. Transformer
\n ix. Switchbox
\n ix. Conductor
\n xi. Battery
\n xii. Transmission tower
\n xiii. Steel\/plastic tubes & pipes
\n xiv. Pre-fabricated shelter
\n xv. SCADA Software
\nd. Assembl<\/p>\n
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\n vi. Concrete flooring for inverter\/transformer\/battery pack,
\n vii. Building of control room etc.
\nb. Assembly and Erection
\n i. Assembly & erection
\n ii. Supply of nut, bolts, fasteners and other miscellaneous materials
\n iii. Test & Commissioning
\nA. Risk of Equipment and components are acquired by the Applicant during erection successful handover of the plant to the customer.
\nB. Payment is as per milestone or monthly depending on the % of goods delivered at site Full payment is released on successful commissioning of the plant with stipulated power generation.
\nAnd for Issue number 8, the statement of facts is as follows…
\nThe contract stipulated successive payment against successive statements depending on the milestone stipulated in the contract.
\nOn analyzing the Issues, with respect to the CGST\/SGST Act, rules, and notifications released from time to time, it is to note Entry number 234 of Schedule I ( which are taxable @ 2.5% ) of notifica<\/p>\n
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\n(IV) section 12(2, reads “The time of supply of goods shall be the earlier of the following dates,” namely:-
\n (a) the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply; or
\n (b) the date on which the supplier receives the payment with respect to the supply:
\n Provided that where the supplier of taxable goods receives an amount up to one thousand rupees in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess amount shall, at the option of the said supplier, be the date of issue of invoice in respect of such excess amount.
\nOn plain reading of the above facts along<\/p>\n
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\nIssue No.3: Whether supply of solar power plant under 'Supply Contract' is supply of 'solar power generating system' under Entry 234 of Schedule I of the Notification No. 1\/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1\/2017-intergrated Tax (Rate), Entry 234 of Schedule I of the Notification 1\/2017-Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the <\/p>\n
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\nIssue No.4: Whether supply of solar power plant under 'Supply Contract' is supply of 'solar power generating system' under Entry 234 of Schedule I of the Notification No. 1\/2017- Integrated Tax (Rate), Entry 234 of Schedule I of the Notification No. 1\/2017- Central Tax (Rate) both dated 28 June 2017 and Entry 234 of Schedule I of the Notification No. 1\/2017- State Tax (Rate) dated 29 June 2017 where the assembly, erection, and ' commissioning of the solar power plant is undertaken by a third party contractor?
\nRuling : In this scenario, the goods are supplied by one contractor, and the services were supplied by the other contractor. Therefore the rate of tax applicable for supply of goods as long as it satisfies the condition of being ” device and parts” of the solar power generating system attracts 5% rate of tax as per Entry 23<\/p>\n
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\nIssue No.6: If the Clarification to Issue No. 5 is negative, what would be nature of supply i.e. composite supply or mixed supply?
\nRuling : Ruling covered under clarification in issue number 5 (five)
\nIssue No.7: Whether contract for assembly, erection, and commissioning of the plant undertaken by the Applicant under a separate contract would be a service contract liable to be taxed under Service heading 9954?
\nRuling : The referred contract doesn't fall under the ambit of SAC 9954, but falls under the Entry 25 of 25 (Heading 9987) of Notification No.11\/2017 -Central Tax (Rate), dated: 28th June 2017, and attracts 18% rate of tax.
\nIssue No.8 Whether the time of supply of power plant shall be determined under Section 31 (4) of the CGST Act\/SGST Act read with Section 12(2) thereof?
\nRuling: &<\/p>\n
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