TaxTMI 
TaxTMI 
2018 (10) TMI 684
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....the provisions of both the CGST Act and the GST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST GST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submission (Brief facts of the case), as reproduced verbatim, could be seen thus - FACTS OF THE CASE Nature of Work, Design, Construction, Supply & commissioning of 200 mini piped water supply schemes with solar operated pump & suitable treatment plant for removal of excessive Iron in Iron affected habitations of nine districts in the State of Bihar. Scheme is comprising of: 1) Drilling of tube well. 2) Solar panels & its system to run the pump, and take the water through treatment plant and reach water to 5.95 overhead tank at 7 meter height 3) Iron Removal treatment plant 4) Mild Steel Staging (Steel Structure) for supporting overhead tan....
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....ies. Issues Involved as on date: The contract is issued by Public Health Engineering Department (PHED) of Bihar Government and till now (30h June 2017) they have been deducting VAT against each of supply and the work carried out and we have been filing VAT returns in Bihar State through proper channel. This has been a composite supply that needs to be noted specifically. Till date no import duty not excise duty was laviable since this was executed under Govt. of India's Notification. Notification 47/2002, 91-92-93/2002 cus, 6/2002 Excise and amended time to time and also followed by various circulars by Ministry of Finance and Company Affairs Department of Revenue, Tax Research Units etc. of Government of India clearly states that the duty exemptions (Excise and Customs) are given for setting up of the drinking water treatment plants meant for human and animal consumptions and in the interest of the citizen of the country and each scheme works only on SOLAR POWER. Such schemes being developed for the first time in the country, has been recognized as an INNOV ATION by the Ministry Of Rural Drinking Water & Sanitation through Department of Science & Technology in the yea....
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....in rural part of villages in the state of Bihar. These schemes operate of a specially developed technology and it exclusively work only on SOLAR POWER. Purchase of the items are done in the form of composite supply where each sub-assembly is supplied and the assembly work of various sub-assemblies and thereafter integration of such sub-assemblies together is done at site in a rural village allotted by the local Govt. Tube Well: A tube well is dug in the ground and thereafter PVC pipes are inserted and assembled in the tube well by putting gravel around the pipes with strainer assembly at the bottom end of the tube well. Thereafter flushing of the tube well is done by an air compressor to ensure smooth supply of water flowing out. Once this work is carried Out payment is done for this part of the item mentioned in the price bid. RCC Plinth: This part of the work is civil work where our own employees hire the labor locally and carry out the work according to the drawing where Cement, Steel & other material are purchased and supplied from Our Purchase department. Once this work is completed including laying of foundation both on the plinth, we get paid for the work carr....
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....ch house and house to house pipe connections are provided using CPVC pipes. A typical lay out of assembly done at house to house is seen in an as build picture. The entire work is based on innovative design, engineering and each of the item is engineered and pre-fabricated in the factory and taken to the site and in a particular sequence it is assembled and the entire work is simplified to make it screwdriver technology and simply assembled at site. Since it is having interconnections with individual sub-assemblies and all such subassemblies are finally connected, it is treated as composite supply and the water supply gets started house to house for drinking water. Such system work only on the solar power. Submissions on 06.07.2018 We have conveyed you our plea & looking forward kind consideration on the following lines that will help to serve to the masses "safe drinking water" using INNOVATIVE solutions. 1. Reaching safe drinking water to the bottom of the pyramid of our society. 2. Motivate Innovators and help innovations to exhibit its performance in the field & 3. Proving masses (society of our country) that Government is fully aware of such innovations and p....
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....n in the new GST law for water & such solutions. In fact this is the reason we have approached eminent apex body like yours. 7. These schemes work on purely SOLAR POWER which is a nonconventional energy which otherwise is being promoted by the Govt. of India with MINIMUM DUTIES. 8. These are the water treatment schemes and not water purification schemes and the plant that we have designed, engineered through our innovative approach is converted as screw driver technology that involves over 95% of just an assembly work at site. 9. We could not find the appropriate HSN code for such unique scheme hence could not find appropriate GST tax. 10. Our humble request has been just not to find somehow a place and squeeze in such technology under one of the OLD prevailing laws and give somehow a treatment and close the chapter but to find unique justice to such innovative solutions. 11. Our submission is to bring such INNOVATIONS to the kind attention of apex bodies of GST regime like yours that will give justice and motivate the innovators in the country. Statement containing the applicant's interpretation of law and/or facts, as the case may be, in respect of the quest....
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.... No. 8] Cases of violation of central excises/ services tax if any booked during last five years. No. 9] Whether any proceeding is pending before authority on said subject. Matter or otherwise. No. Nature of Activity(s) (proposed/ present) in respect of which advance ruling sought. The contract is issued by Public Health Engineering Department (PHED) Of Bihar Government, they have deducted TDS of works contract Tax but it's a composite supply that needs to be noted specifically. Till date no import duty was leviable since this was executed under Gov. of India's Notification Vide No.47/2002, 91-92-93/2002 custom. 6/2002. Issue was what is rate & HSN code of GST of Setting up of the drinking water treatment plants on solar systems under composite supply of water applicable W.E.F.1.7.2017. Question on which Advance ruling is required. As reproduced in para of the clarification bellow. Desk authority self-opinion Composite supply of solar panel @ 5% under GST tax rate @ 5% applicable as per law. Water supply @ 18% Tax Outlook under GST. 1) Any services provided to the local authority, State or central government in relation to the above-mentione....
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.... by way of exemption from tax by the government. Under GST regime, however, any import under Project import category shall be subject to tax at a rate of 18 percent. This will lead to overall increase in the capital expenditure cost for the client. 3) Services provided in relation to the construction, erection, commissioning, installation, completion, fitting-out, repairs, maintenance, renovation or alteration, etc., are now subject to GST at a rate of 12 percent in general. However, under the old tax regime construction services were exempt from services tax but were subject to Sales Tux/VAT in the range of 4 percent (under composition), or 5 percent - 15 percent VAT (under the normal scheme) on the materials supplied under the construction services activity. This change shall lead to a marginal increase in tax cost as compare to the old tax regime. 4) Any services other than construction services were subject to Service tax at a rate of 15 percent under the old tax regime. After the introduction Of GST, however, pure services - such as architect services, consulting engineer services, manpower services, etc - are exempted from GST, if provided in relation to activity of a w....
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....nt and the department. From the submissions made by the applicant we find that the issue pertains to a contract entered into by the applicant with the Public health Engineering Department, Government of Bihar. Vide letter dated 31.10.2014, the Executive Engineer of the Public health Engineering Department, Purnea, Bihar had informed the applicant that their bid in respect of their tender for the work of "Design, Construction, Supply and Commissioning of 200 Mini Piped Water Supply Schemes with solar powered pumps and suitable treatment plants (aeration and activated carbon based) for removal of excessive iron from the Iron affected habitations of 9 districts viz....... on TURNKEY basis with 3 months trial runs after commissioning and comprehensive of 60 months after successful completion of trial run period" had been approved. Thus from the same it is clearly seen that the applicant has been awarded a contract for supply of water after removal of excess iron and to supply all goods and services for achieving the objective of supplying water after removing excess iron. We find from the submissions made that the applicant, in order to perform the contract has to perform various....
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.... to house pipe connections are provided using CPVC pipes. From the above work details submitted by the applicant it is very clear that the entire contact is in the form of a composite contract consisting of supply of goods and services and Where the main intention is to drinking water to the villages after removing excess Iron impurities and which therefore would be the main part of the contract. Here it would not be out of place to mention that the applicant is claiming that the work performed by them are 'water treatment schemes' and not 'water purification schemes'. In their submissions they have mentioned that ".....when Extracting waterfront tube well, passing it through treatment plant of removing unwanted contaminants like Iron from ground water and eventually lifting it to overhead tank (in short the scheme).....". These works would be covered under Sr. No. 3, Column 3 (iii) of Notification No. 11/2017-Centra1 Tax (Rate) dated 28.06.2017. In view of the above discussions and also in view of the submissions made by the applicant, we find that the work done by them is a composite supply which attracts the provisions of Notification No. 11/2017-Central Ta....