The Hon’ble Delhi High Court in the case of Association of Power Producers v. Solar Energy Corporation of India Ltd. [W.P. (C) No. 12511 of 2024 dated September 10, 2024] dismissed the writ petition seeking clarification from Central Board of Indirect Taxes (“CBIC”) on GST applicability to Battery Energy Storage Systems thereby holding that, the CBIC is not required to issue clarifications on taxpayer queries and that taxpayer must determine GST liability by referring to statutory provisions.
Facts:
Association Of Power Producers (“the Petitioner”) has filed a writ petition seeking issuance of appropriate writ or order or directions be issued to Solar Energy Corporation of India Limited (“SECI”) i.e., Union of India, through the Ministry of Power to decide on the clarifications sought by the Petitioner in terms of its representation dated August 27, 2024, in a time bound manner.
The Petitioner also urged that directions be issued to the CBIC for issuance of clarification on the applicability of the GST on Battery Energy Storage Systems (“BESS”).
Issue:
Whether CBIC is obligated to issue clarification on GST applicability for specific taxpayer queries?
Held:
The Hon’ble Delhi High Court in the case of W.P. (C) No. 12511 of 2024 held as under:
- Noted that, as per Section 168 of the CGST Act, the CBIC, if it considers expedient for the purpose of uniformity in the implementation of the CGST Act, may issue orders, instructions or directions to the Central Officers as it may deem fit. However, there is no provision where CBIC is required to issue clarifications on separate queries raised by taxpayers directly.
- Opined that, the Petitioner have to ascertain whether GST payable in a certain scenario in line with the provisions of the GST. The CBIC cannot issue any binding clarification as to the chargeability of the BESS service to tax.
- Held that, the writ petition is dismissed.
Our Comments:
The judgment reaffirms that the taxpayers cannot demand direct clarifications from CBIC, but must rely on statutory provisions or seek an Advance Ruling.
Relevant Provision:
Section 168 of the CGST Act:
“Section 168: Power of Government to extend time limit in special circumstances
(1) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, by notification, extend the time limit specified in, or prescribed or notified under, this Act in respect of actions which cannot be completed of complied with due to force majeure.
(2) The power to issue notification under sub-section (1) shall include the power to give retrospective effect to such notification from a date not earlier than the date of commencement of this Act.
Explanation.- For the purposes of this section, the expression “force majeure” means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of this Act.”
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