TaxTMI 
TaxTMI 
2018 (12) TMI 649
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....is specifically made to such dissimilar provisions, a reference to the CGSI* Act would also mean a reference to the same provision under the MGST 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 submissions, as reproduced verbatim, could be seen thus - STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE QUESTION(S) ON WHICH ADVANCE RULING IS REQUIRED. 1. This Application is being filed by EMCO Ltd.('the Applicant'/the Company'), having Goods and Services Tax ('GST') Registration No.27AAACE2764Q1Z6. The Applicant is engaged in the business of manufacturing and selling various products and solutions as required in Power Transmission and Distribution Sector. The Company has two divisions namely (i) Transformer division and (ii) Project division. The Transformer division manufactures widest range of transformers which are used in the power industry. The Project division has two Strategic business units (i) Sub-station SBU (ii) Manufacturing Tower and Transmission Line SBU. S....
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....charges being recovered and if so at what rate. STATEMENT CONTAINING THE APPLICANT'S INTERPRETATION OF LAW AND/OR FACTS, AS THE CASE MAY BE, IN RESPECT OF THE QUESTION(S) ON WHICH THE ADVANCE RULING IS REQUIRED 2. ISSUE FOR DETERMINATION 2.1 The question/ issue before Your Honor is whether GST is leviable on the transportation charges levied by the Applicant on PGCIL? 2.2 In case the GST is payable, what would be the rate of GST to be charged on such charges? 2.3 The he question / issue placed for determination before Your Honor has to be appreciated in light of the following position of law and its applicability to the activity by the Applicant, discussed hereunder. 3. POSITION OF LAW AND SUBMISSIONS OF THE APPLICANT At the outset, the Applicant would like to refer to Notification 12/2017-Central Tax (Rate) dated 28th June 2017 which exempts various services from the levy of GST. EXEMPTION NOTIFICATION 12/2017-CENTRAL TAX (RATE) 28^TH JUNE. 2017 3.1. Entry no. 18 of the Notification No. 12/2017 dated 28^th June 2017 exempts services by way of transportation of goods by road except inter alia by a GTA. The relevant extract of the entry is reproduced below....
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....l be determined in the following manner, namely: - a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax, 3.8. Upon reading of the above provisions, it can be seen that in cases where two or more taxable supplies of goods or services or both are naturally bundled in the course or furtherance of business the supply would qualify as Composite supply. Further, as per Section 8 of CGST Act, the Composite supply would be treated as a supply of 'Principal supply' for the purposes of CGST Act and would be taxed accordingly. 3.9. A 'Principal supply' would mean the predominant element of supply involved in the Composite supply. The Composite supply can, therefore, be broadly divided into two parts (i) Principal Supply i.e. predominant element (ii) other ancillary supplies. 3.10. As observed from above, a supply would qualify as a Composite supply only in cases where such supply consists of two or more taxable supplies. Therefore, it is cru....
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....er and the Contractor for the Services contract (also referred to as the "Second Contract") for the subject package which includes performance of all the services inter alia including inland transportation, insurance, delivery, , unloading, handling, Storage, erection (of all equipment and material) including associated Civil works, detailed survey including route alignment, profiling, tower spotting, optimization of tower locations, soil resistivity measurement and geotechnical investigation (including special foundation locations viz. pile/well foundation locations, whenever applicable and covered under BPS), Check survey, classification of foundation for different type of tower and casting of foundation for tower as per POWERGRID's foundations drawing, tack welding of bolts and nuts including supply and application of zinc rich plant, fixing of insulator strings, stringing of conductors and earth wires/OPGW along with all necessary line accessories; Stringing Power line crossing section under Live Line Condition (wherever applicable); painting of towers & supply and erection of span markers, obstruction lights (wherever applicable) for aviation requirements (as required), testin....
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....shall be aggregate of INR 80,43,90,567/-(Rupees Eighty Crores Forty Three Lacs Ninety Thousand Five Hundred Sixty Seven only), or such other sums as may be determined in accordance with the terms and conditions of the Contract. The break-up the Contract Price is as under: Sr.No. Price Component Amount (INR) 1. Transportation, Insurance and other incidental Services 5,95,56,644 2. Installation Charges 78,48,33,923 Total Service Contract Price 80,43,90,567 5. PRAYER In the light of the above background and facts, a Ruling is sought from the Hon'ble Authority on the following: • Whether GST is leviable on invoice raised by Applicant towards freight and other incidental expenses outsourced by the Applicant? • If GST is payable, applicable rate of tax on the said transportation service? 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- 1. Issue for determination- 1.1 The question/ issue before Your Honor is whether GST is leviable on the transportation charges levied by the Applicant on PGCIL? 1.2 In case the GST is payable, what would be the rate of GS....
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....upply means a supply of goods or services or both which is leviable to tax under this Act. M/s. Power Grid Corporation of India Ltd (A Govt. of India Enterprise) proclaimed a tender and M/s. Emco Ltd filed tender and finely got the tender of work of tower project Pugalpur Transmission Line Part-V associated with HVDC Bipole link between Western Region (Raigarh, Chhattisgarh) and Southern Region (Pugalpur, Tamilnadu) - North Trichur (Kerala) and made with contract for supply and also service on 08.06.2017. The contract is supply of material, supply of accessories and installation commissioning, etc. Another contract is service contract which includes performance of all services inter alia including inland transportation, insurance, delivery, unloading, handling, storage, etc. Citation:- 1. Advance Ruling No. KAR ADRG 03/2018 Dated: 21st March, 2018 Skill tech Engineers & Contractors Pvt Ltd. = 2018 (6) TMI 111 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA 2. Judgement of Supreme Court of India M/s. India Meters Ltd vs State of Tamil Nadu on 7th September, 2010 = 2010 (9) TMI 878 - SUPREME COURT OF INDIA 3. Judgement of Supreme Court of India Hindustan Sugar Mills E....
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....es. As regards supply of services applicants has stated that goods that are sold ex-factory basis and thereafter they were transported to the project site for which separate consideration has been decided. As per second contract entered into with PGCIL in respect of various services to be undertaken upto successful commissioning of the project which includes planning, transportation of goods, loading and unloading etc for which seprate invoices and consideration has been stipulated. For the purpose of transportation of goods applicant avails the services of Goods Transport Agency Who transports the goods. Applicant also pays tax under reverse charge basis. Further applicant on back to back basis issues invoices and charges separate consideration for transportation services to PGCIL. It is this transportation charges/freight recovered by the applicant from PGCIL which is the subject matter of present application. Applicants submits that they do not issue any consignment note in the course of providing transport service to PGCIL This being the case, the applicant is of the view, that it does not qualify as a 'Goods Transport Agency' and thus transportation services provided by the....
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....) Supply of Tower Earthing. The scope of work under this Notification of Award (NOA) shall also include all such items which are not specifically mentioned in the Bidding Documents and/or your bid but are necessary for successful completion of your scope under the Contract for the construction of Tower Package TW05. +800kV HVDC Raigarh- Pugalur Transmission Line Part-V associated with HVDC Bipole link between Western region (Raigarh, Chhattisgarh) and Southern region (Pugalur, Tamil Nadu)- North Trichur (Kerala) unless otherwise specifically excluded in the Bidding Documents or in this NOA. 2.2 The Notification for Award of Contract for performance of all other activities, as set forth in the Bidding Documents, viz. inland transportation, insurance, delivery, unloading, handling, storage, erection of all equipment and material) including associated civil works, detailed survey including route alignment, profiling, tower spotting, optimization of tower locations, soil resistivity measurement & geotechnical investigation (including special foundation locations viz. pile/ well foundation locations, whenever applicable & covered under BPS), check survey, classification of foundat....
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....upply of services - THIS CONTRACT AGREEMENT No. CC-CS/651-SR1/TW-3573/3/G10/CAII/7293 (also referred to as Services Contract/ the Second Contract') is made on the - 8th June 2017 This Services contract for Tower Package Two5for + 800RV/HVDC Raigarh- Pugalur Transmission Line Part-V' associated with HYDC Bipole link between Western region (Raigarh, Chhattisgarh) and Southern region (Pugalur, Tamil Nadu - North Trichur (Kerala)Contract Agreement No. CC-CS/651-SRVIW-3573/3/G10/CA-II/7293 Scope of work ----- WHEREAS the Employer desires to engage the Contractor for providing all the services inter-alia including inland transportation, insurance, delivery, unloading, handling, storage, erection (of all equipment and material) including associated civil works, detailed survey including route alignment, profiling, tower spotting, optimization of tower locations, soil resistivity measurement & geotechnical investigation (including special foundation locations viz. pile/ well foundation locations, whenever applicable & covered under BPS), check survey, classification of foundation for different type of tower and casting of foundation for tower footings as per POVVERGRIDs foundation....
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....n full or in part, and/or recover damages there under shall give us an absolute right to terminate this Contract, at your risk, cost and responsibility, either in full or in parts and/or recover damages under this 'Second Contract' as well. However, such default or breach or occurrence in the first Contract', shall not automatically relieve you of any of your obligations under this 'First Contract. It is also expressly understood and agreed by you that the equipment/ materials supplied by you under this 'Second Contract', when installed & commissioned by the contractor under this 'Second Contract' shall give satisfactory performance in accordance with the provisions of the Contract. From the conjoined and harmonious reading of various clauses of first contract and second contact, it can be safely concluded that the agreement for setting up Tower Package TW05 for +800KV transmission Line Project is a single indivisible contract. As the contract consists of two or more taxable supplies of goods and services and their combination, is a composite supply as defined u/s 2(30) of the GST Act. For the proposition of law that the first contract and the second contract is one single indiv....