TaxTMI 
TaxTMI 
2019 (2) TMI 185
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....h contract. 2 Whether these contracts can be classified as works contracts as per GST Law and whether notification no. 11/2017-Central Tax (Rate) dated 28th June 2017 as amended by notification Tax (Rate) dated 25th Jan 2018 is applicable to the present case? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST 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 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. FACES 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) raised We have received order from Nagpur Metro Rail Corporation hereafter called as NMRCL for "Shifting LT,HT O/H lines crossing and providing LT,HT U/G cables from Hingna Depot CH. 19500 to Ambazari Lake CH.12500 for Nagpur Metro Rail....
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....ral Tax (Rate) dated 25th Jan 2018, treating above work as Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,- (a) railways, including monorail and metro; Statement containing the applicant's interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicant's view point and submissions on issues on which the advance ruling is sought). As per Section 2(119) of the Central Goods and Services Tax (CGST) Act, 2017, unless the context otherwise requires, the term "works contract" means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract" As can be seen from definition of works contract only construction, fabrication, completion............... Of immovable property will be consi....
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.... length of foundation bolts and nuts (cost with required size and lengthf foundation bolts and nuts (cost with wooden box is included). 110 Cu.Mtrs 5673.00 624030.00 5. 18.1.41 Dismantling of KVA Distribution Transformer safely without any damages and storing it in safe place. 200 KVA 80.00 16000.00 6. 8.8.3 Dismantling the existing overhead line including G.I. wires of all sizes without damaging & making the coils in suitable sizes. 11.5 Km 816.00 9384.00 7. 7.5.16 Providing and erecting Heat shrinkable outdoor termination kit for 11kV (E) XLPE HT cable 3x240 to 300 sq. mm. with necessary material as per specification No. CB-JT/HT 72 Each 15127.00 1089144.00 8. 7.5.7 Providing and erecting Heat shrinkable indoor termination kit for 11 k V (E) XLPE HT cable 3x240 to mm. with necessary material as per specification NO. CB-JT/ HT 64 Mtr 11152.00 713728.00 9. 7.5.25 Providing and erecting Heat shrinkable Straight through joint kit for 11 kV (F) XLPE HT cable 3x300 to 400 sq.mm. with necessary material as per specification No. CB-JT/ HT 24 Each 28306.00 679344.00 10. 7.1.31 Supplying, erecting & terminating PVC armoured cable 32core 300 sq mm a....
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....LD 4 Each 16158.00 64632.00 18. MSDCL Bore Horizantal With HOPE Pipe upto 13018 MSDCL MM Dia. 955 Mtr 5602.00 5349910.00 19. 7.6.6 Supplying & laying (including excavation) 15 cms. dia RCC Hume pipe with coupling collar of standard thickness at required depth up to 90 cms. below road / ground surface, for enclosing provided cable & necessary back filling with light ramming to make the road [ground surface as it was (Except bitumen carpet) 350 Mtr 751.00 262850.00 20. 7.6.8 Supplying & laying (including excavation) 25 cm Dia half round RCC Hume pipe of standard thickness at required depth up to 90 cms. below road / ground surface, for enclosing provided cable & necessary back filling with light ramming to make the road/ ground surface as it was (Except bitumen carpet). 9480 Mtr 577.00 5469960.00 21. 16.2.4 Providing and spreading stone metal 25mm size for 100 mm depth above the 1000 ground level. 1000 Cu m 66.00 66000.00 22. 16.5.15 Supplying and erecting ISI mark G.I. pipe 100 mm dia 'C" class position with accessories. As per specification No. CWPLB/GP 372 Mtr 1821 677412.00 23. 16.3.6 Providing cement concrete for foundation or for concre....
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....ted in horizontal or vertical position with necessary channels on provided cross arm with adequate length of "C" class G.I. pipe for operating handle erected on extended square shaft. The operating handle provided with lock and key at suitable height from ground level with necessary clamp. 3 Set 18414 55242.00 32. 8.6.15 Supplying and erecting Distribution class, 11 kV thyrite type lightening arrester, on provided cross arm as per specification No. OH-INS/LA 2 Set 1373 2746.00 33. 10.2.5 Supplying and erecting approved make, 11 kV out door type drop out fuse with insulator complete with fuse holders, fuse barrel with metal fitting, fuse element mounted on M.S. channel with working current of 15 Amps capacity complete erected on provided cross arm. 2 Set 9821 19642.00 34. 8.4.23 Supplying & erecting inline cut point end pole D.P. Structure for 200 KVA Transforme with R.S.J. Pole 2 Nos. of size 100 x 116 mm x 11 Mtr. Long with suitable Distribution Box of C.R.C.A. Sheet 16 SWG (size 4 SqMtr.) with 4 Pole MCCB 300 Amps as incomer & 6 Nos. 63 Amps Kitkat for outing circuits. Transformer D.P. Structure includes the A. B. Switch 200 Amps, D.O. fuse Set & LA. Set. 2 N....
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....g, erecting & terminating PVC armoured cable 34 core 120 sq mm aluminium conductor with continuous 12.97 sq mm (8 SWG) G.I. earth wire complete erected with glands & lugs, on wall/ trusses/pole or laid in provided trench/ pipe as per specification no. CBLT/ AL 750 Each 736.00 552000.00 Total Rs. Five corer Ten lacks, one hundred and seventy three only 51000173/- Additional submissions In continuation of our statement of facts and our interpretations of facts submitted earlier along with advance ruling application we would further like to state that. As per Section 2(119) Of the Central Goods and Services Tax (CGST) Act, 2017, unless the context otherwise requires, the term "works contract" means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. Thus as per definition contract for building, construction...............of immovable property shoul....
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.... The work is not construction of metro rail project but this is shifting of existing utilities obstructing metro railway path and providing supplying and installation of new underground cable along with its accessories. Detail scope is already submitted in statement of facts submitted with application for advance ruling. (2) Huge tanks made of metal for storage of petroleum products in Oil refineries or installations. These tanks, though not embedded in the earth, are erected at site, stage by stage, and after completion they cannot be physically moved. On sale/disposal they have necessarily to be dismantled and sold as metal sheets/scrap. It is not possible to assemble the tank all over again. Such tanks are therefore not moveable and cannot be considered as excisable goods (Reference para 15 of Triveni judgment supra and the case of CCE Chandigarh v. Bhagwanpura Sugar Mills reported in 2001 (47) RLT 409 (CEGAT Delhi)] = 2001 (9) TMI 134 - CEGAT, COURT NO. II, NEW DELHI (3) Refrigeration/Air conditioning plants. These are basically systems comprising of compressors, ducting, pipings, insulators and sometimes cooling towers etc. They are in the nature of systems and are not mach....
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....ng questions 1. Whether EPC Contract for electrical cable supply and laying work can be classified as contract for building, construction, fabrication, completion, erection, installation, fitting qut, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property wherein transfer of property in goods (whether as goods or in some Other form) is involved in the execution of such contract. As per information provided by applicant, The applicant received order from Nagpur Metro Rail Corporation hereafter called as NMRCL for "Shifting LT,HT O/H lines crossing and providing LT,HT U/G cables for Nagpur Metro Rail Project". NMRCL Is a Special Purpose Vehicle (SPV) created for the smooth implementation and operations of the Nagpur Metro Rail Project and is a joint venture of Government of India & Government of Maharashtra, with 50:50 equity. NMRCL is incorporated by Govt. of India- Ministry of Corporate affairs. After going through documents provided it is evident that work is awarded through the work involves various activities vis. Supply, erection, testing and commissioning including transport, loading) unloading, insurance etc. of tran....
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....dded for the permanent beneficial enjoyment of that to which it is attached." 19. It is evident from the above that the expression "attached to the earth" has three distinct dimensions, viz. (a) rooted in the earth as in the case of trees and shrubs (b) imbedded in the earth as in the case of walls or buildings or (c) attached to what is imbedded for the permanent beneficial enjoyment of that to which it is attached. Attachment of the plant in question with the help of nuts and bolts to a foundation not more than 11/2 feet deep intended to provide stability to the working of the plant and prevent vibration/wobble free operation does not qualify for being described as attached to the earth under any one of the three clauses extracted above. That is because attachment of the plant to the foundation is not comparable or synonymous to trees and shrubs rooted in earth. It is also not synonymous to imbedding in earth of the plant as in the case of walls and buildings, for the obvious reason that a building imbedded in the earth is permanent and cannot be detached without demolition. Imbedding of a wall in the earth is also in no way comparable to attachment of a plant to a foundation me....
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....T Law and whether notification no.11/2017-Central Tax (Rate) dated 28th June 2017 as amended by notification no.01/2018-Central Tax (Rate) dated 25th Jan 2018 is applicable to the present case?. Relevant extracts of above mentioned notification are re-produced below. (V) Composite supply of works contracts as defined in clause (119) of section 2 of the central goods ad service tax Act 2017 supplied by the way of construction, erection, commissioning or installation of original works pertaining to (a) Railways including monorail and metro. 6% The Precondition in the said notification is composite supply of works contracts pertaining to metro, as discussed earlier only work relating to immovable property can be classified as works contracts and thus the above said work does not fall in ambit works contract but it is composite supply of various items mentioned in work schedule submitted. Thus the said work can not be classified as works contract and the said notification is not applicable to the applicants case. Thus going through the above facts it is clear that the above said supply (activity the dealer does not amounts works contract but said supply constitutes composite sup....
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..... 2 of the CGST Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,- (a) railways, including monorail and metro. The applicant has also submitted that according to them they are not supplying Works Contract Service because in their case there is no involvement of immovable property. They have said that their supply should be classified as Composite supply, as different goods and services vis. Testing, cable, wires, cement pipes, laying, joints, Insurance, commissioning, transport etc. which are naturally bundled and supplied in conjunction with each other, with principal supply being LT/ HT Cable. Thus we find that the basic issue before us is whether in the subject case there is supply of Works Contract or not. We shall therefore discuss all the provisions relating to Works Contract, which is a mixture of service and transfer of goods. GST Schedule Il clearly mentions that the following are supply of services:- a. construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, b. works contract including transfer of propert....
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.... of land, and things attached to the earth, or permanently fastened to anything attached to the earth;" a. It is evident from (1) above that they are providing cement concrete (cc) foundation for pump and the pump is attached to the CC foundation with nuts and bolts. It is very clear that the CC foundation is permanently fastened to earth and the pump is attached to it. b. Itis evident from (2) to (4) above that, they are Supplying & erecting 11 kV 630A, Indoor type Ring Main unit With 1 or 2 Incoming & 2 or 1 Outgoing with HRC fuses complete erected on provided cc foundation/MS channels/trench; Supplying and erecting fencing of section having size 2450 mm in height from ground level and 1200 mm width with angle iron frame work erected in CC foundation. Here to the Indoor Unit and fencing section are erected on CC foundation which is permanently fastened to earth. c. In (5) above it is seen that there is Supplying & laying (including excavation) of 15 cms. dia RCC Hume pipe with coupling collar of standard thickness at required depth up to 90 cms. below road/ ground surface, for enclosing provided cable & necessary back filling with light ramming to make the road/ ground surfac....
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.....................) 9 - (ii) Composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017. 9 - (iii) construction services other the (i) and (ii) above. 6 - Hence as per the said Notfn it is very clear that the composite supply of works contract as in the subject case falls under (ii) attracting 18% GST. The said Notification was amended on 22.08.2017 vide Notfn No. 20/2017 - Central Tax (Rate) and is reproduced as under:- Sl.No. Chapter, Section or Heading Description of Service Rate (per cent) Condition 1 2 3 4 5 Chapter 99 All Services Section 5 Construction Services Heading 9954 (Construction service) (i) ...................................) 9 - (ii) Composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017. 9 - (iii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Government,................alteration of, (a) a historical monument, archaeological site or re....
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.... supply of works contract as 6 defined in clause. (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of ORIGINAL WORKS pertaining to, (a) railways, excluding monorail and metro ......... 6 (vi) Services provided to the Central 6 Government, State Government, Union Territory, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017 6 (vii) Construction services other than (i), (ii), (iii), (iv), (v) and (vi) above. 6 Vide amendment Notfn....
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.... case may be (vii) Construction services other than (i), (ii), (iii), (iv), (v) and (vi) above. Even with the amendment the applicant's position has not changed. Their composite supply of works contract as in the subject case falls under (ii) attracting 18% GST. The said Notification 11/2017 was also further amended on 25.01.2018 vide Notfn No. 01/2018 - Cen Tax (Rate) and vide this amendment clause (v) as above was changed to include 'Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, .................. pertaining to, (a) railways, INCLUDING monorail and metro. In the subject case it is seen that the applicant is providing composite supply of Works Contract in respect of Metro but the reduced rate of tax is available only if the work is of the type of ORIGINAL WORKS. Original Works would mean ; all new constructions; all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; erection, commissioning or installation on of plant, machinery or equipment or structures, whether ....