TaxTMI 
TaxTMI 
2021 (8) TMI 671
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....ant ESCO' is a special purpose vehicle incorporated by a selected consortium, M/s. Shapoorji Pallonji and Company Pvt. Ltd., M/s. SMC Infrastructures Private Limited and M/s. Samudra Electronic System Pvt. Ltd., (hereinafter collectively called as 'consortium bidder'), to implement and execute the Energy performance contract dated 01-03-2019, for supply and installation of LED luminaries, feeder panels, switch gears, cables & other equipment and their installation and operation & maintenance of the Public Lighting Network. 3. In view of the above, the applicant sought advance ruling in respect of the following questions:- i. Whether the street lighting activity undertaken under the Energy Performance Contract dated 1st March 2019 (which involves supply of various goods and rendition of various services), is to be considered as a Composite Supply under the CGST / KGST Act 2017? ii. If so, whether supply of luminaires, without which there can be no energy conservation, and which is the primary deliverables, constituting approximately 70% of the total project cost, can be construed as the principal supply? What would be the applicable rate of GST on supply made under ....
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....take measures to achieve guaranteed energy savings. 5.3 The Applicant states that as per clause 2 of the energy performance contract, the scope of the project includes- a) Designing, financing, identifying, installing and implementing ECMs and installing Other Initiatives for the Switching Point Lights and any New Lights subsequently added to the Project Public Lighting Network. b) Upgrading, rehabilitating and replacing such parts of the Project Public Lighting Network, including the Feeder Panels, Feeder Panel Cables, Meters, outreach arms etc. c) Operating and maintaining the Project Public Lighting Network and Other Initiatives, including making necessary replacements of LED Luminaires and other equipment during the term, in line with good industry practice, key performance indicators and standards specified in the contract. d) Achieving energy savings, at least to the level of Guaranteed Energy savings. 5.4 The expression 'ECM' has been defined in the Energy Performance Contract to mean, energy conservation measures and when used in the context of the Project shall inter alia include replacement of existing luminaires forming part of Project Pubic Lighting Ne....
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.... ordinary course of business, one of which is a principal supply. 6.3 The expression principal supply has been defined under Section 2(90) of the CGST Act to mean the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. In the Applicant's submission, the principal supply under the energy performance contract is supply of goods viz. LED luminaires. This is so because the intention of the contracting parties is to achieve energy savings, which cannot be given effect to without the supply of LED luminaires. It is by replacing old luminaires with LED luminaires that the energy conservation is to primarily happen. Further about 70% of the entire project cost is attributable to the supply of LED luminaires. In the Applicant's view, the supply of LED luminairesis thus the predominant element of the composite supply. 6.4 The supply of other equipment such as feeder panels, underground cables, meters, installation of the equipment, operation and maintenance of the project Public Lighting System are ancillary to the supply of LED luminaires, which are the sine qu....
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....6.2017 inasmuch as the value of goods covered under the composite supply contract is more than 25% of the value of the composite supply. For case of reference, the relevant entry is extracted herein below- "Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply provided to the Central Government, state Government or Union territory or local authority or a Government Authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution." PERSONAL HEARING: / PROCEEDINGS HELD ON 30-06-2021 7. Sri Karthik Dadhia, Chartered Accountant & Authorised Representative of the applicant appeared for personal hearing proceedings held on 30-06-202land reiterated the facts narrated in their application. FINDINGS & DISCUSSION We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved on which advance ruling is sought by the applicant and relev....