Ruling Rajasthan for classification
Case Title | Utsav Corporation |
Court | Rajasthan AAAR |
Honorable Judges | Member Satish Kumar Agarwal & Member Ravi Jain |
Citation | 2022 (1) GSTPanacea 369 HC Rajasthan RAJ/AAAR/04/2021-22 |
Judgement Date | 11-January-2022 |
Council for Petitioner | Shuchi Sethi |
Council for Respondent | NA |
Section | Section 100 ,101 |
In Favour of | In Favour of Appellant |
The Rajasthan bench of Member Satish Kumar Agarwal & Member Ravi Jain has held that the condition precedent to availment of the benefit of these entries supply of solar power based devices and services by way of installation in relation to setting up of solar power based devices are satisfied in the instant case.
Thus, court observed that the effective rate of GST on supply of Goods and Services in relation to the Solar Power Based Devices upto 30-9-2021 is as follows (a) 5% on value of goods where the value of goods is to be taken as 70% of the gross consideration arid
(b) 18% on the value of services where the value of services is to be taken as 30% of the gross consideration. Hence, the effective rate of GST for the composite supply will work out to 8.9% ((5% x 70%) plus (18% x 30%)).
However, with the amendments effected vide Notification No. 06/2021-Central Tax (Rate), dated 30-9-2021 and Notification No. 08/2021-Central Tax (Rate), dated 30-9-2021, the rate of tax on goods portion stands increased from 5% to 12% and accordingly, the effective rate of GST for the-period post 30-9-20121 will stand increased to that extent
Ruling Rajasthan for classification
FACTS OF THE CASE
M/s. Utsav Corporation (legal name Sapna Gupta) Gurjar Ki Thadi, Jaipur (herein after referred as appellant) have filed appeal against Ruling issued by Authority for Advance Ruling Rajasthan vide Advance Ruling No. RAJ/AAR/2021-22/10, dated 3-9-2021 (AAR-Raj)
The appellant is engaged in supply of solar energy-based products under various contracts and on the basis of purchase orders from customers with or without installation service
Due to different nature of contracts/orders in the sector of solar energy devices, the appellant has sought advance ruling on following question for classification and GST rate on sale of solar energy products as Solar Water pumping system as a whole, sale of one of the products on standalone basis, and sale of the products under various combinations to be undertaken by them and supply of parts of the system along with installation.
Authority for Advance Authority has passed the ruling vides Order No. Raj/AAR/2021-22/10, dated 3-9-2021
Solar Controller & Structure attracted rate as 18% GST as per ruling
Aggrieved by the ruling, appellant has filed appeal before this forum on following grounds
Appellant submitted that technical details and use of the products ‘Solar Controllers’ and ‘Structure’ in the relevant context has been ignored in determination of classification of the product which have been briefed out by the Ministry of Renewable Energy Devices itself
Appellant submitted that the entries in Tariff notifications for both goods and services have been amended since 1-2-2019 itself to give effect to taxability of contracts for supplies with installation in the sector of solar devices in a ratio of 70:30 with an effective rate of 8.9%. The notification has been further amended now vide Notification No. 8/2021-Central Tax (Rate), dated 30-9-2021 after the pronouncement of Advance Ruling in the present case to increase the tax rate of goods portion from 5% to 12% thus making the effective tax 13.8%
Ruling Rajasthan for classification
COURT HELD
Considering the facts as recorded, held that court find that the Appellant in the instant case is supplying solar energy based bore well water pumping system and also carrying out the activity of provision of installation and commissioning of such systems.
Hence; the appellant is supplying solar energy based devices and also providing the specified services, therefore, the condition as mentioned under respective entries of both the notifications are satisfied in the instant case.
Thus, Court find that the condition precedent to availment of the benefit of these entries supply of solar power based devices and services by way of installation in relation to setting up of solar power based devices are satisfied in the instant case.
In view of above, court, hold that the supply of solar energy based bore well water pumping systems as a whole. alongwith installation and commissioning of such systems involves both supply of goods and services in terms of entry No. 234 of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 read with entry No. 38 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 with rate of GST as prescribed under these entries…
Thus, court observed that the effective rate of GST on supply of Goods and Services in relation to the Solar Power Based Devices upto 30-9-2021 is as follows (a) 5% on value of goods where the value of goods is to be taken as 70% of the gross consideration arid
(b) 18% on the value of services where the value of services is to be taken as 30% of the gross consideration. Hence, the effective rate of GST for the composite supply will work out to 8.9% ((5% x 70%) plus (18% x 30%)).
However, with the amendments effected vide Notification No. 06/2021-Central Tax (Rate), dated 30-9-2021 and Notification No. 08/2021-Central Tax (Rate), dated 30-9-2021, the rate of tax on goods portion stands increased from 5% to 12% and accordingly, the effective rate of GST for the-period post 30-9-20121 will stand increased to that extent.
Accordingly, the appeal filed by appellant is disposed off in the above terms
Ruling Rajasthan for classification
ANALYSIS OF THE JUDGEMENT
If the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and services, one of which being a taxable service specified in the entry at Sl. No. 38 of the Table mentioned in the Notification No. 11/2017-Central Tax (Rate), dated 28-6- 2017 the value of supply of goods for the purposes of this entry shall be deemed as seventy percent of the gross consideration charged for all such supplies, and the remaining thirty percent of the gross consideration charged shall be deemed as value of the said. taxable service
On careful consideration of the above-mentioned entries of the said notifications and the proposed contract submitted by the appellant we find that the benefit of the said entries is available only when the Solar Power based devices is supplied alongwith other goods and Services, one of which being a taxable. service specified in the entry at S. No. 38 ibid. We find that the Appellant in the instant case is supplying solar energy based bore well water pumping system and also carrying out the activity of provision of installation and commissioning of such systems. Hence; the appellant is supplying solar energy based devices and also providing the specified services, therefore, the condition as mentioned under respective entries of both the notifications are satisfied in the instant case. Thus, we find that the condition precedent to availment of the benefit of these entries supply of solar power based devices and services by way of installation in relation to setting up of solar power based devices are satisfied in the instant case.
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