TaxTMI 
TaxTMI 
2019 (2) TMI 185
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....form) is involved in the execution of such 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. 1950....
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....8th June 2017 as amended by notification no. 01/2018-Central 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, ....
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....FP 2 Each 34752.00 69504.00 4. 16.3.4 Providing Cement concrete foundation for pump in with required size and 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 c....
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....h 1060.00 8480.00 17. 10.2.20 Supplying and erecting double leaf hinged door each 1500mm in width x 1850 mm in height using B class, GI pipe with angle iron supports, chain link wiremesh (jali) complete supported on channel iron, erected in foundation, and painted as per specification no SS-AS/ DLD 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. ....
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....on including excavation for the poles 60 cm x 60 Cm x deep 1/6 of pole length in 1:3:6 cement concrete (20 x 25 mm stone metal) and 45 cm x 45 cm x 45 cm/ 45 cm did. x 45 cm. height plinth duly plastered and with necessary curing and finishing in an approved manner. (for -above 9 m poles) 26 Each 33270 865020.00 31. 10.2.2 Supplying and erecting approved make 11 kV out door type gang operated air break, triple pole switch 400A, capacity with 3 post pin type insulator per phase, mounted 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 eleme....
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....ingle pole cut point channel set of for 11 kV HTOH. Line. Two channel of size 100 x 50 mm 1.6 m Long having stud angle of size 50 x 50 x 6 mm 1.5 m long with top piece of size 100 x 50 mm 0.45 m. Long with necessary clamps, nut bolts etc. complete as per drawing. 1 Each 6364 6364.00 38. 5.9.1 Supplying and erecting approved make extendable / non- extendable type 11 kV, 630A, load break switch with fuses of required rating, on provided MS channels / trench / foundation in an approved manner as per specification no SW-HTS / LBS 3 Each 154214.00 462642.00 39. 7.3.27 Supplying, 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 rul....
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...., equipment's, pipes and tubes etc. for their assembly/installation erection/integration/interconnectivity on foundation/ civil structure etc, at site, will not be considered as excisable goods for imposition of central excise duty, the components, however, would be dutiable in the normal course. Here we would like to draw your attention to the fact that our scope of work does not include construction of entire project of Metro stations, railway line, power supply, civil structures etc. but scope include "Shifting LT,HT Overhead lines crossing which are obstructing metro railway path and providing LT,HT underground cables for Nagpur Metro Rail Project. 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....
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....th principle item being supply of HT/LT cable and the rate of the principal supply should be applicable to whole contract. With regards to our advance ruling application we hereby submit challan (4 copies) for payment of balance fees of Rs. 5000 dated 6th August 2018 having CIN ORBC18082700076845 under CGST Act., Also as required by you we here by submit Tender document (4 sets) of works allotted to us by Nagpur Metro Rail Corporation. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- I would like to submit regarding their questionnaires as a jurisdiction officer as under. Applicant have raised following 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 fro....
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....19 Of the judgment as follows: 18. That argument needs to be tested on the touch stone of the provisions referred to above. Section 3(26) of the General Clauses Act includes within the definition of the term "immovable property" things attached to the earth or permanently fastened to anything attached to the earth. The term "attached to the earth" has not been defined in the General Clauses Act, 1897. Section 3 of the Transfer of Property Act, however, gives the following meaning to the expression "attached to the earth": "(a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls and buildings; (c) attached to what is so imbedded 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 a....
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....t is crystal clear that above said supply (activity) constitutes composite Supply and not a works contract. Thus in my humble opinion in the above said work that there is no transfer of immovable property involved and thus the above work cannot be considered as contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property but it is nothing but a composite supply which is taxable at the rate specified for the main identifiable supply i.e. cables, transformers which is taxable @ 18% under GST Act 2017. 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 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 insta....
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.... schedule separately describes each activity to be carried out to complete the work and also rate for each activity is separately mentioned, by adding amount of each activity total estimated tender cost is derived and they have quoted in percent % above or below of the estimated cost. Thus they had no option to quote the individual prices for each activity and the tender had to be accepted as a whole and they could not accept part activities. They have further stated that NMRCL department is insisting them to charge 12% GST as per Notfn. No. 11/2017-C. T. (Rate) dated 28th June 2017 as amended by Notfn. NO. 01/2018-C.T. (Rate) dated 25th Jan 2018, treating above work as Composite supply of works contract as defined in clause (119) of Sec. 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....
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....n NO SS-AS/FSG. 4. Supplying and erecting 50 x 50 x 6 mm. angle iron as corner support 2m long fixed at the middle of the fencing frame and the other side inclined at 30 degree angle, in C.C. foundation of 15 x 15 x 40cm complete duly painted with one coat of red oxide and two coats aluminum paint. 5. 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) Section 3(26) of General Clauses Act, 1897 defines 'Immovable property' as follows: "Immovable property' shall include land, benefits to arise out 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 ....
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....cant is 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 no.01/2018-Central Tax (Rate) dated 25th Jan 2018 is applicable to the present case? Since it is clear that the applicant is supplying Works Contract Services, we now reproduce the relevant provisions of Notification no. 11/2017-Central Tax (Rate) dated 28th June 2017 which is applicable to the present case. 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) 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 fa....
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....) and (vi) above. 6 As per the said Notfn with the amendment mentioned above also 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 11/2017 was further amended on 21.09.2017 vide Notfn No. 24/2017-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............ 6 - (iv) Composite supply of works contract............ 6 (v) Composite 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 constr....
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....g monorail and metro ......... 6 (vi) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017 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 Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be &nb....