\

Td*qqq*

RAJASTHAN AUTHORITY FOR ADVANCERULING

GOODS AND SERVICES TAX

NCR BUILDING, STATUE CIRCLE, C-SCHEMEJATPUR _ 30200s (RAJASTHAN)

ADVANCE RULING NO.RAJ/A.AR/ 2OI8- 1 9/1 1Nitin Wapa

Joint Commissioner

Member(Central Tax)

Sudhir Sharma

Joint Commissioner

Member(State Tax)

Name and address of theapplicant

N{/S Tag Solar System ,8-205,Rajender Marg, Bapu Nagar, Jaipur.

3020rs

GSTIN of the applicant 08A AKFT3688DTZT

Clause(s) of Section 97(2) ofCGST I SGST Act, 2017,under which the question(s)

raised

(e) Determination of the liability to p ay taxon any goods or services or both

,.|

Date of Personal Hearing 08.07.2018

Present for the applicant Shri Pankaj Ghiya

(Authorised Repre sentative).

Date of Ruling 18.08.2018

Note: (Jnder Section 100 of the RGSTAct 2017, An appeal against this ruling liesbefore the Appellate Authority -for Advance Ruling constituted under section 99 ofRGST Act 20I 7, within a period of 30 days from the date of service of this order.

pg. 1

i'^l'^::::,'u::o bv the applicant arefit to pronounce advance ruring u, 1,.y a)under ambit of the Section 97(2)(e), it is as given under:

(e) Determination of the liability to pay tax on any goods or services or both

Further, the applicant being a registered person, GSTIN: 0gAAKFT36ggDlZT, asper the declaration given by him in Form ARA-01, the issue raised by the applicantis neitrrer pending for proceedings nor proceedings was passed by any authority.Based on the above observations, the application is ,admitted, to pronounce

statement of relevant facts having a bearing on the question(s) raised.1' \4/s' Tag solar System, a partnership firm which is engaged in Supply,commissioning, Installation, Maintenance of solar water pumping Systemwithin a stipulated time period.

2' Such Supplies are given on the instructions of the Rajasthan HorticultureDevelopment Society under subsidy scheme wherein the Solar watersystems are required to be installed at the farmer,s field. The scope of workis reproduced hereunder:" s upply, ins tallation.

Pumping Systems',commissioning and maintenance of sorar water

3 ' Accordingly the Applicant Supplies, Installs, commissions and Maintains thesaid systems and perform end to end activities in this regard.4' There may be a consolidated price for all the activities undertaken by theApplicant which involves both the Supply of Goods and Supply of Services.5' Applicant has no clarity with respect to the rate of tax on such Supply. As pertheir understanding it will be taxable at the rate of Syobeing covered underchaptet 84 / 85 under the item "Solar Power Generating System,,. Applicanthas confusion that whether it would be treated as a Supply of goods andtaxable at 5o/o or will it be treated as a works contract and charged at lgyo.

pg.2

t'r'r.,

Applicantts interpretation of law and/or facts:

RATE OF SOLAR POWER GENERATING SYSTEMThe item "Solar Power Generating Systems and parts for their manufacture"are taxable @ 5% under GST Act, 2017 vide Notification No. 0I/20I7-CT(Rate) dated 28.06.2017. The entry is reproduced herein below for your kindperusal:

ChapterHeading

Particulars

manufacture84 or 85 or94

a) Bio-gas Plant

b) Solar Power based devices

c) Solar Power generating Systemd) wind Mill and wind operated electricity generatore) Waste to energy plants / devices

0 Solar lanterns / solar lampsg) ocean waves / tidar waves energy devices / plants

Photo voltaic cells, whether or not assembled inmodules or made up into panels

h)

As per the above Entry in the Rate Schedule, the supply of item underconsideration i.e. Solar Water Pumping System falls squarely under thedefinition of "Solar power generating System" and such supply should betaxable at the rate of 5Yo as they are systems which absorb sunlight andconvert it into electricity which can be put to fuither use.

The above mentioned Entry "Solar Power Based Devices" under Chapterheading 84 or 85 or 95, the item in question i.e. Solar Water Pumping Systemcan also be covered under this category as it is a device run by solar power.Solar Water Pumping System is an apparatus used for pumping water which

pg. 3

runs on solar energy. The dictionary meaning of ,,device,under:

is reproduced

"q thing made or adapted for a particular purpose,mechanical or electronic equipment.,,

especially a piece or

Solar water Pumping System is an equipment which harnesses solar energy inorder to pump water. Therefore, it can also be alternatively classified as a .,SolarPower based device" under chapter g4 or g5.

Applicant has stated that item cannot be termed as an immovable properfy asthese solar water Pumping Systems are screwed by nuts and bolts into theground and can be removed by simply unscrewing the nuts and bolts and in noway do they get attached or affixed to the earth. The pumping sets do not getlermanently attached to the ground and can at any time be removed from thefields' They are assembled at the site for maximum operational efficiency.when the item can simply be dismantled and removed from the ground at anygiven time and is not affixed to the earth permanently, the said goods cannot becategorized as an immovable property. As per applicant Hon,ble Supreme Courtof India in the case of Sirpur Paper Mills Ltd. vs. The Collector of CentralExcise has held as under:

"ft is not possible to hold that the machinery assembled and erected bythe appellant at its factory site was immovable property as somethingattached to earth like a buitding or e tree. The titUinal

-has pointed out

that it was for the operational fficiency of the machine that it wasattached to earth. If the appellant wanted to sell the paper makingmachine it could always remove it from its base ond sell it.

Apart from this finding of fact made by the Tribunal, the point advancedon behalf of the appellant, that whatever is embedded in earth must betreated as immovable property zs basically not sound. For example, afactory owner or a house-holder may purchase a water pump and fix it ona cement base for operational fficiency and also for iecurie. That wiltnot make the water pump an item of immovable property. So*" of thecomponent of water pump may even be assembled on site. That too willnot make any dffirence to the principle. The test is whether the papermaking machine can be sold in the market. The Tribunal has fou"d as afac iew of that finding, we are unable to upholdthe nt that the machine must be treated as a partof of the company. Just because a plant and

pg. 4

machinery are fixed inautomaticallv become an

the eqrth for better functioning, it does notimmovable property.,,

/

The same has also been held in the case of commissioner of central Excise vs.Solid & conect Engg. works & ors. as under:

"23' The courts in this country have apptied the test whether theannexation ls with the .obiect of permanent beneficial enjoyment of theland or building' Machinery -for ietal-shaping and electro-plating whichwas attached by bolts to special concrete baies and couti not be easilyremoved' was not treated t9 be a part of structure or the soil beneath it,as the attachment was not for *oi" beneficial enjoyment of either the soilor concrete' Attachment in order to quaiifu th" i*pression attqched to theeartlt' must be for the beneficial attaihm"it o7 tt rat to which it is attached.Doors' windows and shutters of a house are attached to the house, whichis imbedded in the earlh. rlr", are attached to the house which /simbedded in the earth for the b"n"firiat enjoyment of the house. Theyhave no separate existence from ,ni norr". Aiicles attached that do not'fo'm part of the house such as window blinds, and sasltes, andornqmental articles such as glasses and tapestry fixed by tenant, are notffixtures.

24' Applying the above tests to the case at hand, we have no dfficulty inholding that -the

manufacture of the plants in question do not constituteannexation hence cannot be termid as imiovable property for thefollowing reasons.

(i) The plants in question are not per se immovabre property.

(ii) such plants cannot be said to be "attaclted to the earth,, within thef::;#;, fl:'*

expression as defined in section 3 of the rransfer of

(iii) The fixing 9f the plants to a foundation is meant only to give stabilieto the plant and keep its operation vibration free.(iv) The setting up of the plant itsetf is not intended to be permanent at agiven place' The plant can be movlA ana is indeed moved after the roadconstruction or repair project for which it is set up is compreted.33' ' In the instant case all thqt has been said by the ossessee is thatthe machine is fixed by nuts and bolts to a foundation not because theintention wqs to permanently attach it ti the earth but becquse a

pg. 5

foundation was necessary to provide a wobble frr" operation to\machine. An attachment of this kind without the n"rirrory intentmaking the same permanent cannot, in our opinion, constitute p"r*orriifixing, embedding or attachment in the sense that would make themachine a part and parcel of the earth permanently. In that view of thematter we see no dfficulty in holding that the plants in question were notimmovable property"

Applicant has contended that in the light of the abovementioned facts andjudgments Solar Water Pumping Systems cannot be categori zed as ImmovableProperty and the activity in relation to movable property cannot in any way becategorized as a Works Contract as the definition of Works Contract underCGST Act,2018 does not cover activities in relation to movable property.Hence, the whole transaction cannot be termed as a Works Contract.

Applicant has stated that the instant case is of " Composite Supply" where inthe present scenario, it is very important to see what the Principal Supply is asthe rate of tax of such transactions depends on the rate of tax of the PrincipalSupply.

Applicant has interpreted that predominant element of the Supply being made inthe instant case relates to Supply of Solar Water Pumping Systems. There is onesingle Supply Tender which involves the Supply of the Systems to the recipientand the work of installation, maintenance, commissioning is ancillary to theactivity of Supply of the Solar Water Pumping Sets. Since, the scope of Supplyof the applicant involves provision of both goods and services, where the entireSupply is one transaction; it would qualiff as a composite supply. The principalSupply in the present scenario would be provision of Solar Water PumpingSystem and so the entire contract should be taxable at the rate of 5Yo. As theservice element forms only about I0% in the whole provision of Supply.

ps. 6

3.

whether Supply, commissioning, installation and maintenance of Solarwater Pumping System would be taxable at the rate of Syoconsidering it asa composite supply where the principle supply being that of goods i.e.supply of Solar Power generating system having HSN Code g4 or g5?

whether separate bills can be raised by the Applicant with respecr toSupply and Goods and supply of Services Purely in respect of the contractof the Applicant with RHDS enclosed herewith?

will the said transaction be classified as a "works contract', and taxable atthe rate of I 8% being Supply of Services?

4.1 Personal Hearine (pH):

ven to the applicant Shri pankaj Ghiyapersonal hearing on 0g.07.201g. Durine

cBECdatedts.0t,0021dSunreme""Tillfi::l'J,:f":"Ji_$i;:.Jtffilcontaining the applicant's interpretation of law and facts in respect of the aforesaidquestions which was praced on record. They reiterated the submission already made inthe application for Advance Ruling and further requested that the case may be decidedas per the submission made earlier in Advance n iling Application. Aiplicant wasinstructed to submit copy of work order and some sample bill which was done bythem on a later date.

4.2 The jurisdictionar officer in her comments has stated that the contract given to theapplicant is of supply, installation, commissioning and maintenance of Solar waterpumping system in which the dealer has to deliver a functional solar water pumpingsystem. Hence, it is a one single contract so it is to be treated as works contract andtaxed @ l8olo under GST. She further stated that separate bills one for supply of goodsand other for supply of services cannot be generated as it is a single contract.

1.

2.

pg.7

5.

As per copy of contract submitted by the applicant i.e. iws Tag Sorar System has toexecute "Supply of solar photovortaic (Spv) water pumping system,,. After goingthrough the written submissions, copy of contract and other additional statementsfollowing findings and analysis are made:

M/s Tag Solar System, is a partnership firm is engaged in Supply,Commissioning, Installation, Maintenance of Solar Water pumping System.

Such Supplies are given on the instructions of the Rajasthan HorticultureDevelopment Society under subsidy scheme wherein the Solar water Systemsare required to be installe d atthe farmer's field.The intention in the instant case is not to procure goods of Solar photovoltaic(SPV) water pumping system but to procure a completely functional SolarPhotovoltaic (sPV) water pumping system as a whole wherein applicantundertakes end to end responsibility of supply of equipments includinginstallation and commissioning to a defined technical specifications and testing,commissioning of a fully functional Solar Photovoltaic (SpV) waterpumping system.

Under General Condition of Contract (IV) in clause IV.2 of EOI all risk andliabilities (insurance charges) accruing in relation of works (tempo rary orpermanent), and of all equipments, machin ery, materials, shall be withapplicant until occuffence of the Final Acceptance.

Schedule IV -(Scope of works) of EOI clearly spells out the terms andconditions where contractor has to undertake works of supply installation andcommissioning of Solar Photovoltaic (SPV) water pumping system as perspecific demands of the owner. So it is not the something sold out of shelf.

f) There is a single lump sum price for the entire work undertaken bv theapplicant.

g) After completing installation and commissioning of system, final payment shallonly be made on basis ofsatisfactory inspection and verification report.

h) The applicant has laid claim under notification No 01/2017-cr @ate) dated28.06'2017, at S.No. 234, under HSN classification g4, g5 and 94. fordescription :

pg. 8

a)

b)

d)

e)

o Following renewabre energ)/ devices & parts for their manufacture(c) Solar Power Generating System

The rate of GGST has been mentioned as 2.5%. According to assessee, the correctclassification of given supply should be chapter g4: Solar power GeneratingSystem at the rate of (2.5%o+ 2.5%) 5%.As can be seen, the above entry is under the notification describing the Tax rate on'Goods'' If the transaction is supply of goods then the applicable Schedules wouldhave to be seen but the intent of parties is always for supplying a Functional solarPhotovoltaic(SPDwaterpumpingsystem@whichincludessupply,installation and commissioning and it is not chattei sold as chattel.

Applicant has submitted that under GST, there is a monumental shift in conceptof works contract which was prevalent under erstwhile vAT and Service Taxregime' In GsT, as per definition of works contract service if construction,fabrication, completion, erection, installation, fitting out, improvement,modification, repair' maintenance, renovation, alteration or commissioning isfor immovable property , then only it would classift as works contractservice Hence it means that if aforesaid activities are undertaken for amovable property then it will not be works contract service.Applicant has relied upon following judgment and Circular in furtherance oftheir arguments of Solar Photovoltaic (spv) water pumping system beingmovable property and not immovable:

D Sirpur Paper Milts Ltd. v. colector - lggg (97) E.L.T. 3 (s.c.)iD CBEC circularnumber S8lll2002_CXdateitl5lU/2002

iii) commissioner of central Excise, Ahmedabad v. Sotid and correctEngineering Works (2010) 5 SCC f22Relying on aforesaid judgements and citations the applicants contention is that asthe Solar Photovoltaic (Spv) water pumping system, once installed is capable ofbeing removed and hansferred from oi. itu". to another without substantiardamage hence same should qualifu

"* ^orruir" property. Hence in view of aboveprecedence and facts ofthe case, the given supply should be treated as suppry ofSolar Photovoltaie (SpV) water p.rmping system.

k) As per the terms and condition laid in EoI the applicant has to undertakeactivities of procurement of the material and has also to commission apg. 9

i)

i)

)

functional plant before Final Acceptance. In contracts of such anature, ,h\liability of the contractor doesn't end with the procuring of materials but itextends till the successful testing and commissioning of the system and fuitherhas a obligation of maintenance for a certainperiod. The transaction is a .workcontract' but it is for us to decide whethe, ii is a .work contract, in terms ofGsT Act' So' we come to the crux of the issue and which is as to whether thetransaction results into any immovable property. The term ,immovableproperty' has not been defined under the GST Ac . However, there are aplethora of judgments of the Hon. Supreme court and the Hon. High courtswhich have helped understand the term ,immovabre property,.

l ' In decision of Allahabad High court in official Liquidator v. sriKrishna Deo and ors' tArR tglq All. 247lrwherein, the court held thata machinery fixed to bases with bolts and nuts although easilyremovable are not m property when they have been set up withdefinite object of ru n oil mill and not l ith intention of being, removed after

temporary use - a2. In decision of M/S. T.T.G. fndustries Ltd., ... vs Collector Of CentralExcise, Q004) 4 scc 751 on 7 Muy, 2004.The facts of the case are asfollows:

The facts of the case are nottender, entered into an agreeme ance of itserection and commissioning ervision ofrequired for blast furnace Nos.

is purpose, it import#asz:,:::,components and also manufactured some of the components at their To"iory in Marai Marai Nagar,chennai' These components were transported to the site at Bhitai where the manuJacture andcommissioning of the aforesaid mqchines took place. It is undisputed that duty was paid in respect ofthe components manufactured at its workshop i, Chennai, but no due was pa-id on manufacture of theaforesaid Mudguns and Drilling Machines which were erected and commissioned on site.

In their reply to the show cause, the respondents explained the processes invorved, the manner in whichthe equipments were assembled and erected as also their specifications in terms of volume and weight.It was explained that the function of the driiling machine is to driil hole in the btast /urnace to enablethe molten steer to flow out of the brast furnorJto, coilection inmolten materiar is taken out of the brast furnarr, th, hore in thespraying speciar clay. This function is performed by the mudgun whiclocke

furna ?{:it - 300 tons tofill up the hole in thefurnace. The blast

of its mqssive vessel of I7l9 m cubic metre capacity and the sizefed into the btast furnace o, ,o,,o,!!!,'J: !: #;,t,'r:ilT"'if;,1:;,.'';:;'iii"ff:';"*,:;:!;;against heat' the blast furnace is lined with refractory brick of one metre thickness. Thus, the drilting

pg. 10

//

mqchine has to drill a hole through one metre thickness of the refractory brick rining. The drittingmachine as well as the mudgun are erected on a concrete ptaform described as the cast hous" po)which is in the nqture of a concrete platform around the furnaie. The cast house floor is at a height of25 feet above the ground level' on this platftrm concrete foundation intended for housing dri,rngmachine and mudgun qre erected' The concreiefoundation itself is 5 feet high and it is grouted to earthby concrete foundation' The first step is to secure the base plate on the said concrete pratform byme,ns offoundation bolts' The base plate is 80 mm mild sheet of about 5 feet diometer. It is werded tothe columns v'hich are similar to huge pillars. This fabrication activie takes place in the cast housefloor at 25 feet above ground level. Afier welding the columns, the base plate has to be secured to theconcrete platform' This is achieved by getting up a trottey way with high beams in an inclined postureso that base plate could be moved to the ,oi"rir" ptaform ond secured. The same troyey herps in themovement of various components to their determined position. The varrcus components of the mudgunand drilling machine are mounted piece by piece on a metal frame, which is welded to the base plate.The components are stored in a store-house atuay from the Lhst furnece and are brought to site andphysically lifted by a crane and landed on the cast house floor 25 feet high near the con*ete pratfurmwhere drilling mochine ond mudgun has to be erected. The weigh-t of the mudgun is approximatery I 9tons and the weight of the drilting machine approximately I I tons. The volume of the mudgun is L5 x4'5 x I metre and that of the drilling *orlrii" I x 6.5 x I metre. Htving regard to the volume andweight of these machines there is nothing like assembting them at ground level and then tifting them toa height of 25 feetfor taking to the cast housefloor and then to the platfurm over which it is mountedand erected' These machines cannot be lifted in an ossembled condition.

cts observed that it is a physicor and-engineering impossibirie tohole machines etsewhiri in a furty irrr*oltia condition ande at a height of 25 feet on the casi flior of the brast furnace. sheuthority conceded thefact that the equipments hove to be qssembled/ccepted the submission urged on behalfthe blast furnqce, they have to be firitly by using cranes and trollq i*,

mqchines in ossembled condition a is no space_ovailqble 7o, *oiirg ih,

subject and came to the conclusio considered the authorities on thehole drilling machine results in

this Court in Narne Tulamansitk

eofPvt.

ration ofheld thatresult in

"The test laid down by the supreme court \ that f the chattel is movable to another place as such foruse' it is movable but if it has to be dismantted ani reassembled or re-erected at anotier prace for suchuse' such chattel would be immovalte In the present appeal, eyen .eccording to the finding of thecollector' mudguns and drill tap hole machintesiare to bi drrrortled and disassembled from the cast(:;:r:##,;';:i,:,:;';1u1,iJ""mbted etsewhere. we hqve atso qrrived at the sqme concrusion

Accordingly applying the test laid down by the supreme Court we hotd thqt the erection qndinstallation of mudguns and drilt tap hole mlchines result in immovabre property. In the tight of theratio of the above case low, we holi that the *;,;;;;", and tap hole driiliig ior:iiii, ao not admit ofthe definition of goods and, therefore, excise duty is not leviable thereon,,.The core question that still survives for consideration is whether the processes undertaken by theappellant at Bhitaifor the erection of mudguns and drilling machines resulted in the emergence oJ.goods leviable to excise duQ or whether it resulted in erection of immovable property and not ,,goods,,.

pg. 11

The appellant has placethis Court in Muiicipaproperty. In that case thup, apart from other sproducts. Eqch tankthick asphalt lryers

and s-ending them back m products into the tankrateable value of the structures un qrose in the contthat the tanks aie neithe, ,tru"tu* al Corporation Acthis Court observed :_

_ under the Act. IIth

qry to move it, it has first ton was also accepted by the

processes employefunctional, and othnot merely a macltmoved, cqnnot be moved withoof the other decisions which we

"The basic test, therefore, ofgoods and second, tiat it sho e, that any article, must be aare attached to the earth and thus rought to market. Goods which

theand

remises and embedded r" ,lfin

p9.12

In Minal Engineerwith the exigibitity ncernedmorasses of sugar. exhaustverticalcrystaliseris , ,, Amonosquqre meter. site load bearing t 30 tons perarn"froirr, t;:;, qnd consists tanks, coils,and the mono wasgas cutting' The mono verticar crystariser is a tctnn un, r,r.e.trf ysummit' This Court noticed that marketabitii r;; ! dec.isivg restfor dutiabitity. h *"onr'rili;;;;;r';,reere saleable or suitable for sale', that is 'i,oy,"rng, shoutd ieLopoot" of being sord to consumers inthe marker' as it i1' -withiut anything more. 4n" grr, ,t"rTZiiiro to ihe delirion in euatity steeri;:";r['f:,?rand distinsuish/d the]udgm"rt rn N*: iri";;;'6upro1 hotding that the contention

that case i1t", ning of the Act wqs neither iaised nor decide:d incrystallise, ho, to be as record it was hetd that the mono verticalsuscy factory. It is not capabte of being sotd os f!;:';r:l:":concluded that mono verticar crystartisers are not ,,goods,,therefore, not exigible to ex i Eng2_73; a question arose regcrr furbothat installation or erection",i;:;:"i!;:;!,r:/":;r:;7,::::,y;,':,,:#,2 ,:::':::::!,,:;,:;,!:;:an excisable goods fallingwithin the

^"""iie' ;iiconsidered the earlier jidgments of this Coiri"ir-Steel Tubes and Mittai Ar" irrrrirg Works pvt. L1998 (97) ELT 3 (SC). This Court

"There can be no doubt that if on article is an ime Act. From a combine

marketab ility qs underst""dqttached ti tnl earth ,r;;, Tf

be ascertainedfrom thefa "::r?:!:*

attached to the ear b

It was qlso held that the decision of this Court in sirpur paper Milts Ltd. must be viewed in the tight ofthefindings recorded bv the cicir ,irrrin, ,i* i; whoti purporeiehind a ,aching the machine to ato securet o h o t d, r:ff # m "T,il#' K: : ff;; :7,operty as somethins attached to earth like

able goods but immovableerecting it at qnother site.

pg. 13

/-

operqte. It is not necessoryfor \machines are really o "o*p6r", mudgun and the tlrillin|

hoving regard to the *inn", but we are satisfied thistructures, they do not answer the installed upon concretestructures, they do not answer the installed upon concreteAct- r -'-" -r 6vvqr wttntn rne meaning of the term in the Excise

Thus' it can be seen that the Hon. Supreme court while holding themachines as immovable property took into ac )ount facts such that themachines could not be .ttirt.a without first dismantling it and then re-erecting it as another site. It was also sought to distinguish as to how aconcrete base meant just to prevent w.obbfng or in. machine would notLffi:nflX'"t:Hi:tn, category of imm""iur. properry, as something

I ) That Solar Photovoltaic (sPv) water pumping system has a permanentlocation (at specified farmer's fierd in Rajasthan) as itsinstructions of the Rajasthan Horticurture Developmentscheme wherein the Solar water Systems are required

works is undertaken onSociety under subsidy

to be installed at thefarmer's field meant for supply of water using solar energy. Such plant wouldtherefore have an inherent element of permanency.

2) The output of the project i.e. water, using solar energy would beavailable to an identifiable consumer. Thus this output supply would involve anelement of permanency for which it would not be possible and prudent to shiftbase from time to time or locate the plant elsewhere at frequent intervals.

3) The Solar Photovoltaic (sPV) water pumping system cannot be shifted toany other place without dismantling the same. Further it is tailored madesystem which cannot be sold ,ros it rb, to the other person.

p9.14

Contract also includes civil work such as development of site, structurefoundation for mounting PV modules on metallic structures and fencing ofthe system to ensure security and safety and such other civil structurerelated activities as set out in Scope of work and in the TechnicalSpecifications. Civil structure cannot be dismantled and moved away.

Schedule IV Scope of work, clearly states "Commissioning of solarpumping infrastructural facility and its maintenance and after sales servicesfor 10 years (It includes 5 years guarantee period)." The applicant hashimself agreed to be bound by this clause which reflects perrnanency of theinstalled Solar Photovoltaic (SPV) water pumping system. Con tractbetween applicant and the counter-party is entered into on the premise thatthe system would continuel to be situated at the place of constructionii

Case laws citied by applicant has to be understood in terms of the facts asavailable therein. As in the case of IWS Solid and correct EngineeringWorks (citied Supra) the plant was not intended to be pernanent and wasto be shifted after completion of road repair and Construction work hencewas regarded as moveable. But in instant case the solar power waterpumping system has an element of perrnanency.

The applicant has laid claim under notification No 0I/2017-CT (Rate)dated 28-06.2017, at S.No. 234, under HSN Classification 84,85 and, 94and has regarded the instant transaction as supply of i) ,.Solar powerGenerating System and also at the same time he regards it as supply of ii)"Solar Power Based Devices" treating such supplies to be taxable at therate of 5Yo.

6.

7.

8. The appiicant has to supply a K Functionalwater pumping system" as a whole which

Solar Photovoltaic (SpV)

includes supply, installation

?\ ds ).6

pg. 15

and commissioning , maintenance for l0 years , hence instantis neither a supply of i) "Solar power Generating System,,supply of ii) .,Solar power Based Devices,, .

transaction

and nor a

9 ' As can be seen' the above entry under the notification describes the Taxrate on 'Goods'' If the transaction is supply of goods i.e. supply of either"Solar Power Generating System,, or supply of ,.Solar power BasedDevices" then the applicable Schedules would have to be seen but theintent of parties in instant case is always for supply of a (( Functionalsolar Photovoltaic (sPV) water pumping system' as awhole whichincludes supply, installation and commissioning at the site of farmer alongwith maintenance for 10 years and is not chattel sold as chattel. Hence; cannot be treated as "composite Supply" as contended by the applicant.

10' An overview of all makes us observe that the impugned transaction forsupply of Solar Photovoltaic (sPv) water pumping system which includesprocurement' supply, development, testing , commissioning and providingmaintenance service for 10 years is a "works contract,, in terms of clause(1 19) of secti on 2 of the GST Act.

1' Since the impugned transaction for supply and commissioning of solarPhotovoltaic (sPV) water pumping system is a ..works contract,, u/s 2(rlg)as supply of services, hence question of principal supply does not arise andso GST tax rate of Solar power Generating System or Solar power BasedDevices under notification No 0l/2017-cT (Rate) dated 2g.06.2017, atS'No' 234, under HSN Classification 84, 85 and 94 is not applicable.

p9.16

Based on above facts arong with provision of raw the ruring is as forows:

I As per the statemt RULTNG

includes o.o.u.",o'Lof facts submitted by the applicant, the scope of work

providing -"inr"nutt'' supply' development, testing , .o-n'irlL,,,g -aPhotovortaic rsp#"li1-ice

for l0 vears in ,".p".i *;rm,;; a sorar

il:;:;l"l.:l ;f *nih*it#l6;*im: iln znxH:,"'f#"5;.rii^::3"'o;;;;?';;",lH1in:::::#::,ii",l;works contra;; ;;$ J;fl

",U:::l+T:' ;il *oJ',nJ"o"*,"*

",2 The applicant has sought a clarification on division ofcontract in two, one forsupply of material and other a.,;;;;il;;;,li*irrio'i'g

and maintenance ofi$i"K"ffr:'Jr:,tt""''' * oit,;;#',:is opined that in instant case asinstallation,

"on',nr.r,'l'Ll

of 'agreement'

t' t:^u singte ;;;; supply,andhence;;;;".''loT,:triff HffJ:ff;jI,+;gjX**i*:separate bills for supply of goo', *O,,1*ir-"ir"*i.", cannot be raiseq.

t lf" contract for,.supply, installation, commiss.y;:T.H:JT':]:T]","rarsunder";il'#i:.fj#t:ff il:::;n3: j****u:::1",#u*##.:il:T'^::,:J,,,:.:n*,.,"ru:

utilruNITIN WAPA

I

Member(Central Tax)

SPEED-POST

I

h-,0\r*\,rr(SUDHIR SHARMA

Member(State Tax)

pg. 17

Dapu Nagar, Jaipur_ 302015

r-' I

{

3.

4.

F.No. IV(4)[/AAR/RA I/2018-t 9/ -fr--fr

Copy to:-

Dated: ."%(

Superintendent

l' The chief commissioner of cGST & centralTxcise.(Jaipur zone) &Member,ifirti"l"

Authorirv for Advance n"ri"e,-i\cn nu raiiig-sl,iltia;" , Jaipur-

2' The commissioner of scsr & commercial Taxes Rajasthan & Member,Appellate Authority for Advance nrri"g, i