TaxTMI 
TaxTMI 
2020 (10) TMI 807
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.... 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, electronics; land systems and marine sectors. The Compa....
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.... 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 of construction, erection, commissioning, or installation of original works pertaining to railways, including monorail and metro is charged at 6% CGST. 2.4 In the applicants view....
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....g 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, all relevant extensions of the contract, invoices, linked interim payment certificate and reference in the PO and contract. They also stated that they are listed as sub contractors in agreem....
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....RA 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: * Integrated Control and Management System * Public Address and Voice Alarm System * Driver Only Operation (D00) CCTV System * Closed circuit Television (CCT V) System * Access Control and Intruder Detection System o Passenger Information Display (PID) System ....
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....akes 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 (Disclosed as Works Contract) 3. Letter for additional submission dated 29.04.2019 3.1 Copy of Purchase order No. 4503898418 dt 11 May 2012 3.2 Copy of the extension letter and agreement entered between STEE and SIEMENS 3.3 Note on invoice processing followed by STEE along with list of invoices 3.4 Details of Time of supply falling on or after 25 January 2018 4. Letter for submission of additional requirements dated 20.02.2020 4.....
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....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 applicability of entry No. 3 (v) of Notification No. 11/2017-C.T.(Rate) as amended by Notification No. 1/2018- C.T.(Rate) dated 25th January 2018 to the applicant i.e., 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.....
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.... 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 sys for ASA-01-S laC1', '100673261-Tel Sys for ASA-01-S2C2', '100673261-Tel-Sys for ASA-01-S2C 1', '100673261-Tel Sys for ASA-01-T & M' etc.. along with required Quantity, price and delivery date which in most of the items mentioned as 23.03.2017. The applicant has furnished letter from Siemens dated 30.10.2018, which encloses a letter from CMRL on the subject 'Extension of Time Stage 2 (C) of Phase-1- enabling letter based on Settlement Agreement executed on 27.10.2018-Telecom Part'. This letter of CMRL, based on the Settlement Agreement between ASA-01 & CMRL, executed on 27.10.2018, stipulates the enabling extensions to the relevant Key Dates of Stage 2C. The detailed desc....
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....ghways, 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 the scope and coverage of the Scheme of classification of service and is a guiding tool for classification of services, the Explanatory notes to SAC 995421 and 995461 are as follows: 995421 General construction services of highways, streets, roads, railways, airfield runways, bridges and tunnels This service code includes construction services i. for formations of highways, including elevated highways, roads, streets, other vehicular and pedestrian ways and open car parks; ii. footpaths, traffic-calming structures, cycle tracks, etc; iii. vehicular and pedestrian underpasses and overpasses; iv. construction or restoration of road surface and parking lots with asphalt, concrete, etc; v. installation services of crash barriers, low separating walls, traffic si....
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..... 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 Siemens and therefore not undertaken by the applicant in the case at hand. SAC 995461 covers installation services of telecommunication wiring, telecommunication equipment, electrical installation services of illumination and signaling system for railways. From the descriptions available before us, it is seen that the applicant undertakes Design, manufacture, supply, installation, testing and commission of Integrated Control and Management System, Public Address and Voice Alarm System, Driver Only Operation (DOO) CCTV System, Closed Circuit Television (CCTV) System, Access Control and Intruder Detection System, Passenger Information Display(PID) System, Office Telephone System, Operational Telephone System and Master Clock System. The works are supply and Installation of lines and equipments meant for telecommunication, signaling in the CMRL project and not related to any civil engineering work. Therefore, the supply of the applicant to Siemens is covered under SAC 9954, more speci....
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.... 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 corridor and is integrated at the Operation Control Corridor(OCC) at Koyambedu and the Telecommunications Infrastructure implementation is to be synchronized with the civil construction phases. Further the scope of works of the applicant like Public Address and Voice Alarm System, CCTV System, Passenger Information Display System, Office Telephone System, etc requires installation on specific locations, namely ceiling and the like and these goods once installed, may not necessarily be damaged while removing. The applicant has not established with documents that the works contracted to them are to be executed on immovable property as required under definition of Works Contract' given above. The applicant has stated that in the Pre-GST regime, under Service Tax, the applicant being a supplier of Works Contract Service relating to infrastructure project of railways, in the capacity of Sub-contractor was exempted from service tax and had claimed the benefit of entry 3 (v) of Notification 11/2017-C.T.(Rate) ....
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....rtenant and therefore this criterion is satisfied. 11.5 The applicant has referred to the Ruling of Advance Ruling Authority, Maharashtra in the case of Shree Construction. The Advance Ruling is applicable only to the applicant and the ratio of Advance Rulings cannot be generalized. However, on perusal of the said Ruling, we see that Shree Construction is contracted with Civil works which are undertaken on immovable property and hence is Works Contract' as per Section 2(119) of the ACT which is not the case at hand. 11.6 To summarize, we find that the entry at 3(v) do not specify the class of service provider to whom it applies. The entry is specific to the composite supply of works contract pertaining to railways including monorail and metro. This view is fortified by the justification of the recommendation of the Fitment Committee to the 25th GST Council meeting (available in Volume -2 of the Agenda) after which the downward revision of the rate was effected. The relevant point is given under: Sl.No. Represented By Proposal Justification Comments of Fitment Committee 4 Hon'ble CM Maharashtra and Secretary, Ministry of Housing and Urban Affairs Request to reduce the GST ....