In Re: M\/s. Triveni Turbines Limited
GST
2018 (12) TMI 475 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – 2019 (20) G. S. T. L. 174 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – AAR
Dated:- 17-11-2018
AAR No. KAR ADRG 28\/2018
GST
SRI. HARISH DHARNIA, AND DR. RAVI PRASAD M.P. MEMBER
\nRepresented by Sri Shivadas Advocate, M\/s. Lakshmikumaran & Sridharan, Advocates
\nORDER UNDER SUB-SECTION (4) OF SECTION 98 OF CENTRAL GOODS AND SERVICE TAX ACT, 2017 AND UNDER SUB-SECTION (4) OF SECTION 98 OF KARNATAKA GOODS AND SERVICES TAX ACT, 2017
\n1. M\/s. Triveni Turbine Limited, (called as the 'Applicant' hereinafter), 12A, Peenya Industrial Area, Bengaluru – 560058, having GSTIN number 29AAACT4550H1ZA, has filed an application for Advance Ruling under Section 97 of CGST Act, 2017, KGST Act, 2017 & IGST Act, 2017 read with Rule 104 of CGST Rules 2017 & KGST Rules 2017, in form GST ARA-01 discharging the fee of Rs. 5,000-00 each under the CGST Act and the KGST Act.
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n licant is a manufacturer of steam turbines for providing renewable power solutions specifically for Biomass, Sugar and Process co-generation, Waste-to-energy and District Heating. Apart from manufacturing, the applicant also provides aftermarket services to its customers as well as turbine users of other manufacturers supported by its customer care support, which operates through a network of service centres. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n se of the following facilities: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n question in respect of which Advance Ruling is sought shall be inter alia in respect of the applicability of a notification issued under the provisions of the GST Act and particularly with reference to the application of a particular entry in one of the Schedules to the Notification. In the instant application, the applicant has sought to determine the applicability of Schedule I of the Notification No. 1\/2017- integrated tax (Rate) dated 28.06-2017 to the supplies of Turbine Generator to be made by the applicant to waste-to-energy' projects and the rate of tax applicable on such supplies. The applicant has, therefore submitted that question on which the present advance ruling is sought fulfils the requirement under section 97(2)(b) of the KGST Act. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n irst Schedule shall, so far as may be, apply to the interpretation of this notification. The applicant submits that the Turbines and other items bought out items, proposed to be supplied by the applicant would undisputedly be covered under tariff heading 84 of the Customs Tariff Act, 1975, which deals with Nuclear Reactors, Boilers, Machinery and mechanical appliances; parts thereof, = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n energy projects in urban areas with a view to reducing environmental pollution apart from generating additional energy'. According to the United States Environmental Protection Agency, waste-to-energy is a “clean, reliable, renewable source of energy.” According to the Waste-to-energy' Research and Technology' Council, founded by the European Economic Community, the WTE plants have significant environment benefits. Generally, every project contain a series of equipment from the pit where the MSW is dumped to the generator, from where the electricity generated is uploaded to the grid. Each of this equipment form an indispensable part of waste-to-energy conversion process. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n r System (Control from Local with status monitoring at DCS) = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n pal and urban waste conversion devices producing energy' List 9 includes: 'Agricultural, forestry, agro-industrial, industrial, municipal and urban waste conversion device producing energy'. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ts are required to either 'produce' or 'convert' energy. Therefore, the present IGST Notification not only includes the boilers used in conversion of waste to 'heat energy” but also includes all the equipment falling under Chapter headings 84, 85 or 95 of the Customs Tariff Act, 1975 used in the entire process of converting waste to energy from the dumping pit to electricity generator. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n grated Tax (Rate) dated 28.06.2017 is relevant to the matter, This Notification has six Schedules wherein the listed goods attract the rate of IGST applicable to the respective Schedules. Schedule I comprises of goods which are chargeable to IGST at the rate of 5%. Serial number 234 covers the listed renewable energy devices and parts for their manufacture and these items attract 5% IGST. One of the items in the list is 'Waste to energy plants\/devices'. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n . The waste has already been converted into heat energy' through the process of the burning\/combustion which in turn is utilized to convert water into steam and the said steam runs the turbine to generate electric power. The turbine runs on steam irrespective of whether the steam is obtained by combustion of waste or any other means. Therefore the fact that in this particular case the steam was generated out of waste cannot lead to the conclusion that the turbine is a renewable energy device. The same turbine can run equally well on steam generated by use of coal etc., We are, therefore, of the view that turbine in question will not qualify to be covered under serial number 234 of Notification No. 1\/2017-lntegrated Tax(Rate) dated 28.06.2017. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: M\/s. Triveni Turbines LimitedGST2018 (12) TMI 475 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – 2019 (20) G. S. T. L. 174 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – AARDated:- 17-11-2018AAR No. KAR ADRG 28\/2018 GSTSRI. HARISH DHARNIA, AND DR. RAVI PRASAD M.P. MEMBER Represented by Sri Shivadas Advocate, M\/s. Lakshmikumaran … Continue reading “In Re: M\/s. Triveni Turbines Limited”<\/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-15422","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15422","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=15422"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15422\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15422"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15422"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15422"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nc. The applicant enters into agreements with their customers for design, manufacture, and supply of Steam Turbine Generator sets and also for commissioning and installation of Steam Turbine Generator sets at the site of the customers. In the course of such supplies, the applicant uses the Steam Turbines manufactured by them, while other components like condenser, Gear box, alternator, AVR panel, etc. are procured from outside vendors. In some other agreements, the applicant merely supplies the Turbine Generator sets and supervises the erection, commissioning and installation car<\/p>\n
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\n i. Receiving and storage facility for MSW delivered at doorstep by the urban local bodies (ULBs);
\n ii. Processing facility to improve the quality of MSW for use as fuel in boilers;
\n iii. Incinerators with boilers to produce super heated steam along with flue gas treatment;
\n iv. Steam turbine generator for producing electricity;
\n v. Air-cooled condensers
\n vi. Balance of plant and other associated auxiliary facilities.
\ng. He stated that the Waste-to-energy' project would be an integrated facility for processing Municipal Solid Waste delivered by the Municipal Corporation and other urban local bodies forming a part of the cluster. Fresh mixed MSW would be transferred to the receiving pits from the transport vehicles. After separation of the leachate, further drying would take place in the storage pits. Manual and mechanical segregation of inert and hazardous material would be carried out before delivery of processes MSW feedstock to buffer st<\/p>\n
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\n5. The applicant submits that the Turbine Generator sets that are to be supplied to the waste-to-energy projects fall under Sl.No. 234 of the Schedule I of Notification No. 1\/2017-Integrated Tax (Rate) dated 28.06.2017 (hereinafter called<\/p>\n
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\n7. The applicant submits that Schedule I of the Notification No. 1\/2017-Integrated Tax (Rate) provides the list of goods that attract IGST at the rate of 5%. Sl.No.234 of the Notification reads as below:
\n234
\n84 or 85 or 94
\nFollowing renewable energy devices and parts for their manufacture
\n(a) Bio-gas plant
\n(b) Solar power based devices
\n(c) Solar power generating system
\n(d) Wind mills, Wind Operated Electricity Generator (WOEG)
\n(e) Waste to energy plants \/ devices
\n(f) Solar lantern \/ solar lamp
\n(g) Ocean waves \/ tidal waves devices \/ plants
\nAs per the entry, supplies of the specific renewabl<\/p>\n
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\n9. The detailed project report on Municipal Solid Waste Management for Vishakhapatnam prepared and submitted by Feedback Infra Private Limited in JV with Eco Save Systems Pvt. Ltd in September 2015 (available at http:\/\/www\/sac.ap.gov.in\/Sac\/Userlnterface\/Downloads\/MSWMReports\/Vizag%20DPR- 1.pdf) describes the Waste t<\/p>\n
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\n * Fire Alarm and detection System (At Fire House and Repeat Alarm at CCR)
\n * Cooling Water System (Operation, Control and Monitoring from DCS at CCR)
\n * The I&C System will be configured to perform the following basic functions.
\n(Emphasis supplied)
\n10. Schedule I of the Notification No. 1\/2017 dated 28.06.2017 in Sl.No.234 includes renewable energy devices including waste to energy' plants and parts for their manufacture. From the above, the applicant submits that the Steam Turbine Generator sets that are to be supplied by the applicant to the waste to project forms a part of “waste-to-energy plant”. Therefore, the applicant states that as per his understanding, the product “Steam Turbine Generator Sets” to be supplied by the applicant falls under Sl.No.234 of the Notification No. 01\/2017 IGST (Rate) dated 28.06.2017 and consequently, is liable to IGST at the rate of 5%.
\n11. The applicant has brought to the notice <\/p>\n
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\nThe Central Excise Notification 6\/2002-CE dated 01.03.2002 is extracted as under Sl.No. 237 in the Central Excise Notification 6\/2002-CE dtd 01.03.2002
\nS.No.
\nChapter or heading No. or sub-heading No.
\nDescription of goods
\nRate under the First Schedule
\nRate under the Second Schedule
\nCondition No.
\n237
\nAny Chapter
\nNon-conventional energy devices\/ systems specified in List 9
\nNil<\/p>\n
\nHon'ble CESTAT Bangalore denied the benefit of the exemption to the appellant in the ground that the steam turbine supplied by the appellant to the bio-mass based plant merely converts from one form to another (from heat energy to electrical energy) and that the exemption is only for waste conversion devices producing energy from the waste material (restricted to boilers, generating heat energy' from the waste).<\/p>\n
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\n13. Therefore, the applicant submits that the rationale of the Hon'ble CESTAT in the aforementioned case in the context of Central Excise Notification does not apply to interpret the present notification and therefore that the Turbine Generator set to be supplied by the applicant for use as a part of the Waste to Energy Plant falls under Sl.No.234 of Schedule I of Notification No. 1\/ 2017-Integrated Tax (Rate) attracting IGST at the rate of 5%.
\n14. FINDINGS & DISCUSSION:
\n14.1 We have considered the submissions made by the Applicant their application for advance ruling as well as the submissions made <\/p>\n
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\n14.5 The applicant manufactures Turbines and supplies them to clients who use the turbines in plants which convert waste to energy'. The applicant, therefore, contends that when the turbines are supplied for such plants then the turbines are covered by serial number 234 of the aforementioned Notification and should be taxed at 5% IGST.
\n14.6 In view of the above, the issue before us to decide, for giving advance ruling on the issue sought by the applicant, is whether the product “Turbine” is waste to energy plant \/ device or not when s<\/p>\n
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\n15. In view of the foregoing, we rule as follows
\nRULING
\nThe Turbine Generator Set to be supplied by the applicant for use in waste to energy project is not covered under Sl.No.234 of Schedule I of Notification No. 1\/2017 dated 28.06.2017<\/p>\n
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