Indigrid 2 Private Limited, based in Noida, Uttar Pradesh, has requested an official decision on a tax matter. They are seeking guidance under the Goods and Services Tax (GST) system in Tamil Nadu. This request has been submitted using a specific form designed for such applications. Their office is located on the 10th floor of Berger Tower, in Sector-16B of Gautam Buddha Nagar.
The applicant is engaged in the business of developing and operating Battery Energy Storage Systems (BESS) for or on behalf of various transmission, distribution, and trading agencies in India. The applicant signs a Battery Energy Storage Purchase Agreement (BESPA) with several transmission and distribution companies for the development and establishment of BESS in particular areas towards storing and discharging electricity. The applicant has GST registration for several states in India; however, not for Tamil Nadu currently.
Questions Asked by AAR Tamil Nadu
The applicant asked for the following questions, seeking the AAR Tamil Nadu:
“Question 1: Whether the activity of development and operation of BESS, when such BESS is put on a standalone basis, i.e., not with a generation, transmission, and distribution utility, would amount to the supply of electrical energy and consequently be exempt from payment of GST in terms of Notification No. 02/2017-CT(Rate) dated June 28, 2017.
Question 2: Would the activity of development and operation of BESS when such BESS is co-located (i.e., put up with generation, transmission, and distribution utilities) amount to the supply of electricity and consequently be exempt from payment of GST in terms of Sl. No. Notification No. 02/2017-CT(Rate) dated June 28, 2017, or be exigible to nil rate of duty in terms of Sl. No. 25 of Notification No. 12/2017-CT(Rate) dated June 28, 2017?
Question 3: In the event the authority is of the considered view that the exemption shall not be available to the BESS projects, whether standalone or colocated, then what will be the applicable rate of GST? Consequently, is the applicant required to obtain registration in the state of Tamil Nadu? “
Answers Given by AAR Tamil Nadu:
The following is the advance ruling furnished via the AAR Tamil Nadu u/s 98(4) of the CGST Act, 2017, and u/s 98(4) of the TNGST Act, 2017:
Answer 1: No, the activity of development and operation of BESS when these BESS are put on a standalone basis, i.e., not with generation, transmission, and distribution utilities, shall not amount to supply of electrical energy, and thus, no GST exemption will be available on the same under Notification No. 02/2017-CT(Rate) dated 28-06-2017.
Answer 2: The standalone and co-located BESS perform the same operation; their ownership is not the same. Since the development and operation of both standalone and co-located BESS units are not recognised as a part of a generation/transmission/distribution utility, the applicant is not qualified for exemptions under both Notification No. 02/2017-CT(Rate) dated June 28, 2017, and Notification No. 12/2017-CT(Rate) dated June 28, 2017.
Answer 3: The applicant’s activities under its business come within the category of “support services to electricity transmission and distribution” under the HSN code 998631, and therefore must be charged with an 18% GST. Towards the same, the applicant should take GST registration in Tamil Nadu.
| Applicant Name | Indigrid 2 Private Limited |
| GSTIN of the applicant | Unregistered |
| Tamil Nadu GST AAR | Read Order |
