Order date: 13 January 2023

Parties: M/s Shilchar Technologies Limited V/s Advance ruling No. GUJ/GAAR/R/07/2021 

Facts –

• The Appellant, M/s Shilchar Technologies Limited is a manufacturer of Electronics and Telecom and Power & Distribution Transformers, had made certain supply to Adani Green energy Ltd for which separate contract were issued to them by recipient. 
• Appellant raised question before AAR that whether supply of Aluminium Foil Type Winding Inverter Duty Transformer classifiable under Chapter Heading 8504 and parts of Transformer supplied/to be supplied for initial setting up of solar project falls under Sr. no. 234 in Schedule-l to Notification No. 0l/2017-Central Tox (Rate) dated 28th June, 2017 and liable to Central GST 2.5% along with State GST at the rate of 2.5%.?
• The advance ruling authorities held that appellant is liable for payment of GST on the total value of both the purchase order i.e supply of goods and supply of service in terms of explanation inserted vide Entry No. 234 of Noti. No. 01/2017-CT (Rate) dated 28.06.2017 vide Notification No. 24/2018-CT (Rate) dated 31.12.2018. Explanation stated that out of the gross value of the supply, 70% shall be deemed to be on account of goods and 30% deemed to be on account of service. Accordingly, the effective rate came to 8.9%.
• Aggrieved, this appeal has been filed. 

Issue –

• Whether order passed by AAR is valid ?

Order –

• The appellate authorities observed that the activities relating to supply of the transformers and the supervision of the erection, testing and commissioning of the transformers supplied by the appellant are inextricable and for the purpose of supply of transformer which would be used in initial setting up of the Solar Power Plant. The activities to be performed based on the two contracts discussed herein are interdependent and contribute to setting up of the Solar Power Generating System as per the Project Requirements.
• Further, supply of goods is made along with the supply of services and it therefore fulfils the conditions laid services down under the explanation provided against Entry No.234 appearing under Schedule-I to the Notification No.08/2017-IT (Rate) dated 28.06.2017.
• It was held that the appellant is liable for Payment of GST accordingly, 70% shall be deemed to be on account of goods and remaining 30% shall be deemed on account of services. Tax shall be on goods @5% and services @18% till 30.09.2021 and w.e.f. 01.10.2021 goods @12% and services @18%.