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2019 (10) TMI 481
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....e), as amended w.e.f. 25.1.2018? 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 reference is specifically made to any 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, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- "A. STATEMENT OF THE RELEVANT FACTS HAVING A BEARING ON THE QUESTION (ON WHICH THE ADVANCE RULING IS SOUGHT) 1. Vertiv Energy Private Limited (hereinafter referred to as "the applicant") having its corporate head office at Mumbai is, inter-alia, engaged in the manufacture of various types of UPS systems, which serve as an alternate source of power for a specific period of time in the event of power failure. The applicant also supplies installation commissioning and maintenance and other services to its customers. 2. An UPS is typically used to protect hardware such as comp....
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....€¢ Cable trays/Trenches/Supports / Foundations; • ATS (Automatic Transfer Switch); • All software required for UPS system; • All external cables (Zero Halogen FRLS), connectors; • Accessories, earthings necessary for works; • Spares for DLP of 3 years; • Surge protection devices; • Special tools and test equipment; • Remote monitoring equipment and accessories including voltage free contacts for • Alarms; • Spares; • Furniture for C$05 equipment • Any other supply needed to provide a complete UPS system 3.3. Scope of services 3.3.1 The services to Uninterruptible Power Supply (UPS) system shall include, but not be limited to the following: • Design, manufacture, supply, system assurance, installation, testing and commissioning of the UPS System; • Presentations, reviews and audit support as specified in the Specification; Transportation, Handling and Storage of the material; • Insurance Cover for the material supplied till taking over by Employer; User's Certificates and Test Repo....
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.... stations and depots) VRLA maintenance free batteries (Having Two sets and another set of 6 cells) 13 0 10 8 Sets 24,18,000.00 7,49,58,000.00 5. Appropriate capacity (for secondary stations) VRLA maintenance free batteries (Having Two sets and another set of 6 cells 26 1 27 8 Sets 12,09,000.00 7,49,58,000.00 C. Documentation, Installation, Testing & Commissioning S.N. Description Quantity Quantity Unit Unit rate (INR) Price (INR) JICA Non JICA JICA Non JICA 1. Documentation, Installation, Testing Commissioning of complete system at interlocking stations/depot with earthing 13 0 10 8 Per station/ Depot 68,250.00 21,15,750.00 2. Documentation, Installation, Testing Commissioning of complete system at secondary stations with earthing 26 1 27 8 Per station 68,250 42,31,500.00 D. Training S.N. Description Quantity (JICA) Unit Unit rate (INR) Price (INR) Part- 1 Part-2 1. Trainer's mandays 60 0 Man-days 8,000.....
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....t of the goods also mentions the name of DMRC as the consignee of the goods. Illustrative copy of the lorry receipts issued by the transporters are submitted. 17. Further, prior to the erection/installation of the UPS system, DMRC officials also inspect the UPS system and the accessories and give a go-ahead to the applicant for erection/installation of the UPS system. 18. The applicant further submits that once the goods are received by DMRC at the designated locations, the said goods cannot be removed and used elsewhere by the applicant. In other words, the UPS systems once dispatched to DMRC's site cannot be diverted and supplied by the applicant to any other customer. 19. The above factual position demonstrates that the title/property in the goods stands transferred to DMRC prior to the installation/erection of the UPS system. 20. In the pre-GST regime, the applicants were discharging Central Excise Duty and VAT/SaIes tax on the clearance and sale of UPS system. Further, the service of erection, installation and commissioning of UPS system was treated by the applicants as 'works contract service and thus the applicants were paying service tax accordingly. 21. The ....
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.... on matter or on question specified in sub-section (2) of Section 97 or sub-Section (1) of Section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant;" ....Emphasis Supplied A.7 Perusal of the above clarifies that the advance ruling can be sought on the issues/matters specified under Section 97(2) of the CGST Act. The relevant portion of Section 97 of the CGST Act is extracted hereunder: 97. (1) An applicant desirous of obtaining an advance ruling under this Chapter may make an application in such form and manner and accompanied by such fee as may be prescribed, stating the question on which the advance ruling is sought. (2) The question on which the advance ruling is sought under this Act, shall be in respect of,-- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay t....
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....mber from amongst the officers of State tax, to be appointed by the Central Government and the State Government, respectively. (3) The qualifications, the method of appointment of the members and the terms and conditions of their services shall be such as may be prescribed. A.12 The applicant submits that in terms of the above referred Section 96 of the Maharashtra Goods and Service Tax Act, 2017, the Government of Maharashtra has issued a Notification No. MGST-1017/CR 193/Taxation dated 24.10.2017, which constitutes this authority as Maharashtra Authority for Advance Ruling. A.13 the applicant has its manufacturing unit in Maharashtra where the UPS for DMRC contract are being manufactured. Thus, the applicant is making a taxable supply from Maharashtra. A.14 Therefore, the applicant submits that by virtue of Section 96 of the Maharashtra Goods and Service Tax Act, 2017, the questions for determination in advance ruling lie before the Maharashtra Authority for Advance Ruling. A. 15 In view of the foregoing, the applicant submits that it is eligible to file the present advance ruling application before the Maharashtra Authority for Advance Ruling, Mumba....
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....plicants from the factory. C.5 In view of the above, the applicant is of the view that the supply of UPS system made from the state of Maharashtra would be leviable to GST at the rate of 18% as supply of goods. Similarly, the applicant is of the view that supply of erection, installation, commissioning, testing etc., of UPS system made from New Delhi registration for DMRC would be leviable to GST at the rate of 18% as supply of services. C.6 Sr. no. 3(v) of Notification no. 11/2017-C.T. (Rate) dated 28.6.2017 as amended w.e.f. 25.1.2018 inter alia specifies a concessional rate of 12% GST (6% CGST and 6% SGST) for a composite supply of 'works contract' in respect of construction, erection, installation, etc., of original works pertaining to railways, monorails and C.7 Section 2(119) of the Central Goods and Services Tax Act, 2017 ('CGST Act') defines the term Works contract' as under: "(119) "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 (w....
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....Works reported at 2010 (252) E.L.T. 481 (S.C.) = 2010 (4) TMI 15 - SUPREME COURT. In the said case, one of the respondent (M/s. Solidmec Equipments Ltd) was engaged in supply of Asphalt Drums/ Hot Mix Plants and also undertook its erection, installation and commissioning at the customer's premises. The respondent was issued a Show cause notice on the grounds that the process of assembly of the parts and components of Asphalt Drums/Hot Mix Plants at the customer's site amounted to manufacture of such plants and thus leviable to Excise duty. C.16 In that case, the Supreme Court held that the Asphalt Drums/Hot Mix Plants were assembled and installed by the respondent only in order to enable the said machine to operate in a wobble-free state and fixing of the said machinery to the ground/earth would not make it an immovable property. Hence, the said activity was held to be manufacture of movable goods leviable to excise duty. The relevant portion of the said decision is extracted as under: 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....
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....the above test to the case at hand, the plants in question were neither attached to earth within the meaning of Section 3(26) of the General Clauses Act nor was there any intention of permanently fastening the same to anything attached to the earth. 33.......In the instant case all that has been said by the assessee is that the machine is fixed by nuts and bolts to a foundation not because the intention was to permanently attach it to the earth but because a foundation was necessary to provide a wobble free operation to the machine. An attachment of this kind without the necessary intent of making the same permanent cannot, in our opinion, constitute permanent fixing, embedding or attachment in the sense that would make the machine a part and parcel of the earth permanently. In that view of the matter we see no difficulty in holding that the plants in question were not immovable property so as to be immune from the levy of excise duty." C. 17 In the present case as well, the UPS system is affixed on a foundation/platform for its efficient performance. Further, the said UPS system can be uninstalled without causing any significant damage to its parts and can be shifted t....
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....orks Contract' and would be liable for 18% rate of duty. C.22 WORKS CONTRACT HAS BEEN DEFINED IN SECTION 2(119) OF CGST ACT, WHICH READ AS FOLLOWS: "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 properly wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. Thus, from the above it can be seen that the term works contract has been restricted to contract for building construction, fabrication etc. of any immovable property only. As per Para 6 (a) of Schedule II to the CGST Act, 2017, works contracts as defined in section 2(119) of the CGST Act, 2017 shall be treated as a supply of services. Thus, there is a clear demarcation of a works contract as a supply of service under GST, In the instant case, it cannot be treated as a works contract as it is not a contract which deal with any immovable property. The applicant is supplying UPS system which is not immovable property and the services rendered by them is not relate....
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.... of the Schedule Ill of the Central Goods and Services Tax Act, 2017. Composite Supply under GST Under GST, a composite supply would mean a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business. one of which is a principal supply: In the instant case, supply of UPS cannot be treated as Composite Supply. The recipient of UPS has the option to opt for installation or without installation. In view of the above, the applicant's contract with DMRC cannot be treated as works contract and will be treated as supply of goods and supply of services separately and will attract rate of GST. 04. HEARING Preliminary hearing in the matter was held on 20.09.2019. Sh. Kunal Nikumbh Pre Associate) & Ms. Nupoor Agrawal appeared, made written submissions & requested for admission of their application. The application was admitted and taken up for final hearing as per applicant's request. Jurisdictional Officer was not present. The representative of applicant has explained that their ....
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....ing service are rendered by their New Delhi branch which is separately registered under GST law. From a perusal of the Agreement submitted by the applicant we find that even though the contract is for Supply, installation, testing, and commissioning, etc., of Uninterrupted Power Supply System for Signalling, Telecommunication and Automatic Fare Collection System for the Mass Rapid Transport System of DMRC there is a provision for separate consideration for supply of goods and services. Even though the applicant has bifurcated the work into supply of goods from their Maharashtra GST registered premises and supply of services from their New Delhi GST registered office and accordingly raising separate invoices on DMRC for supply of goods and supply of services, we find that the contract has been entered into, by the applicant's Maharashtra office and not by their New Delhi GST registered office. Thus we are taking up the contract as one contract for which agreement has been entered into, by DMRC and the applicant situated in Maharashtra. We observed that the applicant is seeking a ruling on the issue as to whether their transaction with DMRC qualifies as a supply of goods or a supp....
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....ply' as mentioned in sub-section (30) of Section 2 of CGST Act, 2017 which is as under:- 'Composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.' From the discussions made above we find that in the contract submitted by the applicant the major part of the contract is supply of goods. i.e. UPS Units, etc. These goods are delivered to the client by the applicant and such goods that are supplied are used by the applicant to provide services of installation, testing and commissioning of the substations. Without these goods the services cannot be supplied by the applicant and therefore we find that the goods and services are supplied as a combination and in conjunction and in the course of their business where the principal supply is supply of goods. Thus we find that there is a composite supply in the subject case. Now that we have found that there is no works contract involved in the subject case and the supply i....