Solar home lighting systems attracts GST @12 percent

The AAR, Uttar Pradesh, in the matter of M/s. R2V2 Technologies Private Limited [Advance Ruling No. UP ADRG 27/23 dated May 08, 2023] ruled that solar home lighting systems are appropriately classifiable under tariff entry 9405 5040 and accordingly will attract GST @ 12%.

Facts

M/s. R2V2 Technologies Private Limited ("the Applicant") is engaged in the business of providng solar home lighting systems solutions. The Solar home lighting system is a fixed installation designed for domestic application that illuminates the home by drawing power from the solar energy. The system uses solar cells to convert solar energy directly received from sunlight to electricity. The electricity generated is stored in batteries is used for lighting home whenever required.

The Applicant has crossed the turnover of 5 Crores in F.Y. 2022-23 and therefore, the Applicant is required to issue invoices with 8 digit HSN Code. However, there is no HSN code matching Applicant’s product. 

The Applicant filed an application for advance ruling seeking clarification regarding HSN Code and rate of GST applicable on solar home lighting system.

The Applicant submitted that the supply of Solar home lighting systems is covered under the ‘Solar power based devices’ vide Sl. No. 201A of Schedule II of Notification No. 1/2017-Central Tax (Rate) dated June 28, 2017 ("the Goods rate notification").

Issue

What is the appropriate classification of Solar home lighting systems under GST?

Held

The AAR, Uttar Pradesh, in the Advance Ruling No. UP ADRG 27/23 held as under:

• Observed that, the Applicant is engaged in the supply of solar home lighting system which consists solar Photo-Voltaic Modules, Lithium Ferro Phosphate battery, Solar Charge Controller, LED Lights etc.
• Noted that, as per Rule 3(a) of the general rules of interpretation the heading which provides most specific description of goods will prevail over the general heading. Since, HSN code 9405 which covers "Lamps and lighting fittings, incl. searchlights and spotlights, and parts thereof, n.e.s; illuminated signs, illuminated nameplates and the like having a permanently fixed light source, and parts thereof, n.e.s. Products Include: Tubelight" is the most appropriate heading thus, the Solar home lighting system would be classified under tariff heading 9405 and under tariff entry 94055040 which covers "Solar lantens/lamp etc. products include: Solar Battery, Solar Lantern, Solar Street Light, Solar System".
• Held that, the classification of Solar home lighting systems will be under Sl. No. 201A of the Goods rate notification and would attracts GST @12%.