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2020 (10) TMI 807
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....ited is a wholly owned subsidiary of Singapore Technologies Engineering Limited. Their Project office is located at Third floor No.28/4 (Old No.54/4), Montieth Road, Egmore, Chennai-600008 (hereinafter called the Applicant or the Company). They are registered under GST with GSTIN 33AAQCS9207A1ZG. They have preferred an application seeking Advance Ruling on Whether rate of tax at 6% CGST, available to Composite supply of works contract as defined in clause(119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by way of construction, erection, commissioning, or installation of original works pertaining to Metro, vide-Notification No. 11/2017 amended vide Notification No.1/2018- Central Tax(rate) dated 25th January 2018 is applicable to a sub-contractor(Applicant) rendering the above mentioned services? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted the copy of Challan evidencing payment of application fees of Rs. 5,000/-each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant is a global technology, defense and engineering group specialising in the aerospace, electron....
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....from 9% to 6% CGST. Further to the above amendment customer has been demanding the Applicant to charge CGST on above project at the rate of 6%. 2.3 The applicant, on their interpretation to the statutory provisions, has made reference to the Metro railways Act,1978 which defines Metro Railway as (i) 'metro railway" means a metro railway or any portion thereof for the public carriage of passengers, animals or goods and includes,- (a) all land within the boundary marks indicating the limits of the land appurtenant to a metro railway, (b) all lines of rails. sidings, yards or branches worked over for the purposes of, or in connection with, a metro railway, (c) all stations, offices, ventilation shafts and ducts, warehouses, workshops, manufactories, fixed plants and machineries, sheds, depots and other works constructed for the purpose of, or in connection with, a metro railway; They have stated that as per item No. (v) to Sl.No. 3 to the Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017, as amended on 25th January 2018 the composite supply of works contract as defined in clause 119 of Section 2 of CGST Act, 2017 supplied by way....
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....ctor. They stated that they will submit full set of agreement between Siemens & themselves and Siemens and CMRL including certification provided by CMRL for stage-wise completion, billing to show it is a back to back agreement. 3.2 The applicant vide their letter dated 26th March 2019 stated to furnish Copy of complete sub-contract agreement between them and Siemens including relevant Appendices and Annexures; Sample copy of bills raised by the applicant along with relevant certification for completion of job(Certified by Siemens and CMRL); Sample copy of Service Tax and VAT returns filed during Pre-GST regime. 4.1 The applicant was extended another hearing and heard on 10.04.2019. The authorized representative appeared before the authority and stated that the work done by them involves, design, setting up, installing of signaling system which gives the timings, keeps track of trains passing across each section. The contract is dated 2011 for which all works are being implemented on a single purchase order. Once work is completed in each stage, CMRL issues interim payment certificate based on which invoice is raised by the applicant. They stated that they will submit the PO, ....
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....-contract agreement, the Scope of Works to be undertaken by the applicant was not provided, the applicant was asked to furnish the complete set of the agreement. The same was followed up with a letter No. 54/2018/ARA dated 10.02.2020 wherein the applicant was asked to furnish the complete set of the agreement within 15 days of receipt of the said intimation. 5.2 The applicant vide their letter dated 20th February 2020 received on 26th February 2020 stated inter-alia that • They have entered into a Sub-Contract agreement with SIEMENS Ltd., India for providing services in the nature of Design, Manufacture, supply, installation, testing and commissioning (including integrated testing and commissioning and operational maintenance) of the Telecommunication Works as part of main Contract of SIEMENS Ltd pertaining to metro rail project in Chennai • During the submission of additional documents, they had provided the copy of contract entered with SIEMENS, Purchase Order, invoice copies along with other documents • Scope of work with SIEMENS Ltd is in the nature of overall telecommunications works and consists of the following: • Integr....
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....urnish the portion of the contract stipulating the milestones for issuance of invoice. The authorized representative stated that due to the confidentiality of the contract and being voluminous they could not submit the entire agreement document. The applicant also relied on the decision of AAR Maharashtra in the case of SHREE CONSTRUCTION, who is a sub-contractor and undertakes Works Contract to Railways. In the note shared by the authorized representative, they stated to have submitted the following: 1. Application for advance ruling - dated 16.11.2018 1.1 Complete copy of sub-contract agreement 1.2 Invoice under TNVAT as a proof of Works contract (on 70%) 1.3 Invoice under GST with 18% rate of tax 1.4 Invoice under GST with 12% rate of tax (Post amendment) 1.5 Payment receipt, GST RC and Incorporation certificate 2. Letter for additional submission dated 26.03.2019 2.1 Complete copy of sub-contract agreement including relevant Appendices and Annexures 2.2 Sample copy of bills raised by STEE (Certified by SIEMENS and CMRL) 2.3 Sample copy of Service tax and VAT returns filed pre-GST regime (D....
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.... Interim Payment Certificates (IPC) to SIEMENS • SIEMENS shall upon approval and issue of IPC by CMRL for the works performed, shall in-turn issue IPC to them based on which they issue an Invoice 7. The applicant is under the administrative jurisdiction of Center-Chennai North Commissionerate. Both the Center and State authorities were addressed to seek information as to whether any proceedings are pending against the applicant on the issue raised by them. Both the authorities have not furnished any such information. Therefore, it is taken that no proceedings are initiated/pending in the case of this applicant on the issue raised before us. 8. We have carefully examined the statement of facts, supporting documents filed by the Applicant, all the additional submissions made during the hearing and thereafter. The applicant has stated that they have been engaged by SIEMENS to carry out certain portion of the "Design, manufacture, supply, install, test and commission (including integrated testing and commissioning and operational acceptance) of the telecommunications works in the main contract of SIEMENS entered into with CMRL. The applicant before us seeks the appli....
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....tro Rail Project- Phase I" dated 01 September 2011 with Siemens. • Siemens has secured the contract - the SIGNALING, PLATFORM SCREEN DOORS AND TELECOMMUNICATION works for the CMRL Project Phase-1 and had sub-contracted certain portion of the works to the applicant vide the mentioned agreement. Appendix 6 of the agreement lists the Scope of Works and Supply by the Contractor, Appendix 7 gives the List of Deliverables for the Contract ASA-01(As applicable to Telecommunication Scope Only) and Appendix 10 gives the Additional Scope of Works and supply by the Applicant. These Appendix speaks of the obligations of both the applicant and Siemens and refers GCC Clauses, various paragraphs & Appendix of Volume 3, Volume 2, Volume 4A, Volume 4B, Volume 7, Technical requirements of Chennai Metro Rail Project Phase 1 Tender ASA-01, which have not been furnished before us, thus the actual work undertaken is not furnished. • In the Purchase Order No. 4503898418 dated 11th May 2012 furnished along with their letter dated 29.04.2019, the description of Goods/ Service is mentioned as '100677558-Tel Sys for ASA-01-A l', '100677558-Tel Sys for ASA-01-S1C2', '100677558-Tel sy....
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....onstruction Service) (2) the supply should be a 'Composite Supply' (3) the work should be 'works contract' defined in Clause (119) of Section 2 of CGST Act and (4) The work should be 'by way of construction, erection, commissioning, or installation of original works' pertaining to railways, including monorail and metro. The compliance of which is examined as under in the case at hand. 11.1 The Scheme of Classification of Services is provided in the Annexure to Notification No. 11/2017-C.T.(Rate) dated 28.06.2017. The SAC relating to the works of railways are as under: 12 Group 99542 General construction services of civil engineering works 13 995421 General construction services of highways, streets roads, railways and airfield runways, bridges and tunnels ................................... 45 Group 99546 Installation services 46 995461 Electrical installation services including Electrical wiring and fitting services, fire alarm installation services, burglar alarm system installation services 'Explanatory Notes to the Scheme of Classification of Service', indicates th....
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....glar alarm systems at the construction site; vi. installation services of all types of residential antenna including satellite antenna; vii. installation services of cable television lines within a building; installation services of lightning conductors; viii. electrical installation services of telecommunications equipment; ix. electrical installation services of illumination and signalling systems for roads, railways, airports, harbours and similar premises; x. installation services of heavy electrical equipment; xi. installation services of telecommunications wiring, including of fibre optic cables; xii. other electrical installation services n.e.c. In the case at hand, from the submissions, it is seen that Siemens has secured the contract- the Signalling, Platform Screen Doors and Telecommunications works for Chennai Metro Rail Project Phase I from CMRL and has sub-contracted certain portion to the applicant. SAC 995421 covers 'General Construction services of highways, streets, roads, railways, airfield runways, bridges and tunnels' which are Civil engineering related works which is not the work awarded to Sieme....
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....letion, 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; From the definition, a work shall be treated as Works Contract if that work is done for land or earth or for immovable property and there is transfer of property in goods involved in the execution of such contract. Immovable property cannot be moved. It cannot be separated from the land or earth. If it is detached it shall have to destroy. In the case at hand, the 'Employer's Requirements, Particular Specifications-4B Telecommunication General Specification'- Volume 4B Section 3 and 4 (furnished on 26.02.2020), gives the outline summary of the various systems and sub-systems which are applicable to the Telecommunication scope and Para 3.1.2 to 3.1.10 gives the outline description of the works said to be the works of the applicant. On going through these sections it is observed that the work involves installation of the individual systems at platforms, stations, other select locations along the corri....
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....riginal works" means- all new constructions; (i) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (ii) erection, commissioning or installation of plant, machinery or equipment or structures, whether pre fabricated or otherwise; From the submissions, it is seen that the work of the applicant includes Installation of the various systems on designing, manufacture and supply and therefore is 'Original work' as defined in the notification. Further Metro railways Act,1978, defines Metro Railway as (i) 'metro railway" means a metro railway or any portion thereof for the public carriage of passengers, animals or goods and includes,- a. all land within the boundary marks indicating the limits of the land appurtenant to a metro railway, b. all lines of rails. sidings, yards or branches worked over for the purposes of or in connection with, a metro railway The work of the applicant is on the lines, stations and locations of land appurtenant and therefore this criterion is satisfied. 11.5 The applicant has referred to the Ruling of Advance Ruling Authority, Maharashtr....