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					</table>The <a href="https://judiciary.karnataka.gov.in/" target="_blank" rel="noopener">Karnataka High Court</a> has held that solar inverters will qualify for a concessional 5% Goods and Services Tax (GST) rate as they are parts of solar power-generating systems. It quashed the order of the Karnataka Department of Commercial Tax, classifying them as general electrical devices taxable at 18%.
Background
In June 2017, the Union government prescribed a concessional GST rate of 5% for specific renewable energy devices and equipment used in their manufacturing. This included solar energy-based devices and solar generating systems.
The petitioner, ABB India, supplied solar inverters and other accessories during the tax period from July 2017 to March 2018. It treated the supplied products as parts of solar energy-generating systems, paying GST at 5%.
The Commercial Tax Department later demanded ₹368.7 million (~$3.85 million) in taxes from ABB for this period.
For the sale of solar inverters and related accessories from April 2018 to March 2019, the department claimed ₹583.9 million (~$6.1 million).
The department claimed taxes of ₹246.7 million (~$2.57 million) for sales from April 2019 to March 2020.
The tax department considered the products supplied by ABB to be general electrical devices, which would attract 18% GST and not 5%, and issued show-cause notices alleging the same.
ABB responded by claiming that the inverters were used in solar projects, industrial applications, and large residential complexes with solar grid systems. This would qualify these products for 5% GST.
The issue was taken up by the Deputy Commissioner of Commercial Taxes, the adjudicating body, who sided with the state’s tax department and rejected ABB’s claims for a 5% concessional rate.
ABB filed an appeal with the Joint Commissioner of Commercial Taxes (Appeals-6), Bengaluru, who also dismissed its claims.
After this order, ABB approached the Karnataka High Court to seek the quashing of the earlier orders of the adjudicating and appellant bodies.
ABB contended that the Karnataka Commercial Tax Department wrongly classified the products it supplied as general electrical devices. Solar inverters convert DC power generated by solar panels into AC power, enabling a solar power-generating system to operate.
ABB added that the purchase orders, invoices, and other documents proved that the inverters were supplied to renewable energy solutions companies.
It submitted that the 5% GST benefit was not restricted only to suppliers of entire solar energy generating systems. It also applied to parts used in manufacturing such systems.
High Court’s Analysis
The High Court noted that ABB’s solar inverters were used only as part of a solar energy grid system and could not be treated like ordinary household power converters.
It was observed that a solar generating system consists of multiple components, including inverters, which are necessary to convert solar DC power into usable AC power and are therefore critical to the generating system.
The High Court held that the 5% GST also applied to suppliers of parts, such as solar inverters, used in such solar energy-generating systems.
The court noted that ABB’s invoices proved that the inverters were used in solar systems.
It referred to earlier judgments that stated that where a notification refers to goods “for use,” the relevant test is intended use. Based on these decisions, the High Court held that ABB’s inverters were intended to be used as parts of solar energy-generating systems.
The High Court held that the orders from the adjudicating and appellate bodies were arbitrary and contrary to law, quashing them and allowing ABB’s claims of 5% concessional GST rate.
This April, the Karnataka High Court <a href="https://www.mercomindia.com/karnataka-high-court-stays-cercs-revised-deviation-settlement-mechanism" target="_blank" rel="noopener">issued</a> an interim stay on the enforcement of the Central Electricity Regulatory Commission’s revised deviation settlement mechanism for renewable energy project developers.
Subscribe to Mercom’s real-time <a href="https://www.mercomindia.com/product/mercoms-renewable-energy-regulatory-updates" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don’t miss any critical updates from the renewable industry.

Karnataka High Court Rules Solar Inverters Attract 5% GST and Not 18%

<a href="http://new.abb.com" target="_blank" rel="noopener">ABB India</a> has opened a smart factory designed to produce electrical safety and energy efficiency products in Karnataka’s capital city of Bengaluru.
The factory is one of the first in Bengaluru that is set up to produce electrical protection and connection components. It is located at ABB’s existing factory premises in Bengaluru&#8217;s Nelamangala.
The smart factory houses the production line for ABB India’s entire protection and connection business, which protects power systems from surges and enables a reliable power supply to be provided for various installations.
The smart factory allows for the continuous monitoring of  production using visualizations of operational data to increase efficiency and flexibility.
The smart production line can track and display operational performance parameters across the entire manufacturing chain in real time. The factory also has digital life cycle management with interconnected automation components, machines as well as data about processes and products. Real-time feeds monitor the entire manufacturing process.
Remote access and wireless communication using Radio Frequency Identification Devices (RFID) manage production, work orders, and testing parameters.
“ABB has continued to invest in building capacity to cater to the evolving trends in the Indian market and bridging them with best-in-class global technology,” Sanjeev Sharma, the managing director of ABB India, said in a press release.
“As digitalization gains traction across Indian industries, ABB’s smart factory will take the production of power equipment to the next level. Digital technologies enabling the manufacturing of various next-generation plug and play solutions will cater to a rapidly evolving market,” Sharma added.
Mercom <a href="https://mercomindia.com/abb-india-sees-tax-profits-rise-18-q3-2017/" target="_blank" rel="noopener">previously reported</a> that consistent cost structure improvements helped ABB India boost its after-tax profits by 18 percent year-over-year to ₹830 million (~$12.8 million) in the third quarter of 2017, despite seeing its revenue fall by 6.8 percent to ₹19.15 billion (~$292.76 million).
Image credit: ABB

ABB India Opens Smart Factory in Bengaluru

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The National Thermal Power Corporation (<a href="http://www.ntpc.co.in/en" target="_blank" rel="noopener">NTPC</a>) is seeking a pan India license to construct and set up electric vehicle (EV) charging stations across India.
As of now, under The Electricity Act of 2003, a distribution licensee from each respective state electricity regulatory commissions (SERCs) is required to distribute power. According to the act, the sale of electric power is an activity that can only be performed by licensed distribution companies (DISCOMs), and their licensees or franchisees.
INDIACSR quoted an NTPC official as saying, “The company is trying to get a common license. Electricity can be sold by a DISCOM, a licensee, or a franchisee. All three models are there.”
“We will try to work it out if it is possible to have one license for the whole country. We are looking for a country-wide licensing. If and when that happens, we will be able to set up the charging stations very quickly,” added the NTPC official.
With current installed power generation capacity and projects under construction expected to meet India’s electricity demand until 2026, NTPC is now scouting for new areas of growth. The EV business is important for NTPC due to its lucrative market potential for around 90 billion units of power.
The NTPC is entering the EV business to help create demand for the electricity generated by its power projects and to keep pace with the fast-changing power sector. Any shift to electric vehicles would also help cut both air pollution and fuel imports.
The NTPC plans to set up battery swapping stations where batteries drained of charge can be swapped for charged batteries. The company is currently working on a plan to reduce the cost of setting up these charging stations by half to around ₹100,000 (~$1,538) each.
The Government of India is currently targeting sales of 6-7 million new hybrid and electric vehicles by 2020 under the National Electric Mobility Mission Plan (<a href="https://mercomindia.com/electric-vehicles-opportunity-india/" target="_blank" rel="noopener">NEMMP</a>). The government has also launched the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) program with an initial outlay of ₹750 million (~$11.56 million) to provide a major push for the early adoption and the creation of a market for both hybrid and electric vehicles.
Other recent deals highlight other government efforts now underway: Global energy player <a href="https://www.fortum.com" target="_blank" rel="noopener">Fortum</a> recently signed a <a href="https://mercomindia.com/fortum-nbcc-develop-ev-charging-infrastructure-across-india/" target="_blank" rel="noopener">memorandum of understanding (MoU)</a> with <a href="http://www.nbccindia.com/nbccindia/index.jsp" target="_blank" rel="noopener">NBCC</a>, a Government of India Navratna Enterprise, to develop EV charging infrastructure throughout India and power conglomerate <a href="http://new.abb.com/indian-subcontinent" target="_blank" rel="noopener">ABB India</a> recently submitted a bid to provide 4,500 charging stations in response to a government tender.
In the light of these developments, a pan India license could establish NTPC as the frontrunner in India’s EV charging market. The NTPC has set up two EV charging stations at its offices in Noida and Delhi and plans to develop <a href="https://mercomindia.com/ntpc-develop-20-electric-vehicle-charging-stations/" target="_blank" rel="noopener">20</a> more at different locations.
Mercom recently reported on the subject in an exclusive article entitled <a href="https://mercomindia.com/electric-vehicles-opportunity-india/" target="_blank" rel="noopener">‘Electric Vehicles – The Next Big Cleantech Opportunity in India’</a>. In it, Raj Prabhu, chief executive officer and co-founder of Mercom Capital Group, explained that, “After a few years of growth, the solar and wind sectors are going through some challenges and everyone wants to know where the next big opportunity is in India’s clean energy market. The obvious answer is battery storage, but EVs have the potential to be massive.”
Image credit: NTPC

NTPC Seeks Pan India License to Set Up EV Charging Stations

ABB India has surpassed a 5 GW milestone for the supply of solar inverters in India according to a company release. <a href="http://new.abb.com/" target="_blank" rel="noopener">ABB</a> has been making inverters in the country since 2012 and last year, the company doubled its solar inverter manufacturing capacity in India.
The company consolidated its market leadership for solar inverters contributing to approximately 40 percent of the installed solar projects in the country. In 2015 ABB was the first company to double the solar inverter installed base to 2 GW.
ABB&#8217;s solar product portfolio, including solar inverters, powers about 50 percent of the various solar projects in the country, according to an ABB India release.
“We would like to thank and acknowledge all our customers and channel partners for their continued support and commitment to ABB quality and technology. As India makes rapid strides on its clean energy mission, we are proud to partner this journey with our best in class, future-proof global technology made in India,” said Sanjeev Sharma, Managing Director, ABB India.
“Quality products and innovative solutions are key to continue the momentum of growth of Indian renewable energy installations with digitalization adding the competitive edge. This makes ABB a natural choice to keep pace with the energy revolution sweeping the sector,” added Mr. Sharma.
ABB&#8217;s solar inverter product portfolio ranges from 2 kW to 2 MW, 2 kW to 120 kW string inverters optimized for residential rooftop usage, and 250 kW to 2 MW central inverters ideal for large-scale power projects.
According to Mercom India’s <a href="https://mercomindia.com/product/q2-2017-india-solar-quarterly-market-update/" target="_blank" rel="noopener">Q2 2017 India Solar Quarterly Market Update</a>, as of June 2017, ABB was the top inverter supplier in India with ~4.96 GW of solar inverters supplied. ABB India’s closest competitors are SMA with just over 3.3 GW (supplied) and TMEIC with almost half of ABB’s capacity.
Image credit: ABB

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