TaxTMI 
TaxTMI 
2021 (11) TMI 885
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....ng pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only (a). On the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b). On the concerned officer or the jurisdictional officer in respect of the applicant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void sb-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is spec....
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....ly of services vide Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended from time to time and one of such exemptions is provided to pure services provided to the Central Government, State Government or Union Territory or local Authority or a Governmental Authority at SI.No.3 of the said Notification. It could be seen that only supply of services for a consideration without involvement of supply of goods can be termed as pure services and in the present case, no supply of goods is involved as the applicant is only providing an operation and maintenance service to GCC for dispensing treated water to the general public for consideration and hence the service provided by the applicant is a pure service. 2.3 The appellant has stated that in order to avail the benefit of the above mentioned exemption, they have to satisfy the following two conditions:- (1) The Service recipient should be Central Government or State Government or local authority or a Governmental authority or a Government Entity. (2) It should carry out any Junction entrusted to a Panchayat under article 243G of the Constitution or to a Municipality under article 243W of the Consti....
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....) dated 28.06.2017? 4. The AAR pronounced the following rulings: The Supply provided by the applicant to the recipient i.e. The Greater Chennai Corporation based on the agreement to provide RO Plant and undertake O & M of the same, being not a "Pure service" but a composite supply of goods & Services, they are not eligible for benefit of exemption provided at Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 5. Based on the above decision, the Appellant has filed the present appeal. The grounds of appeal are paraphrased as follows: The appellant wish to submit that the above ruling issued be the Authority for Advance Ruling (AAR) is not sustainable in law and liable to be set. aside for the following grounds. In para 7.4 of the impugned order, the AAR has referred to the Tender floated by the Greater Chennai Corporation bearing No. P.D.T.D.C. No. A 1 /0481 /2016 (Page Nos. 42 to 63) and observed that the scope of the work involves, supply, installation and commissioning of the Reverse Osmosis Plant, issue of smart card to beneficiaries, updating various information in the software, supply of treated water to beneficiaries, by way of running....
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....ST and O & M was being undertaken by the appellant during the period after 01.07.2017. (ii) Where both works, viz., the supply, installation and commissioning and O & M was being undertaken by the appellant after 01.07.2017, under distinct contracts awarded. (iii) Where only O & M work was awarded to the appellant after 01.07.2017, in respect of existing RO plants. The AAR has come to the conclusion wherever the contracts involve both (i) supply, installation and commissioning of RO plants and (ii) Operation and maintenance of such plants, the exemption under S.No. 3 of Notification 11/2017 could not. be claimed, in as much as the scope of work of the appellant involves supply also and it is not "pure service" as contemplated in S.No. 3 of Notification 11/2017. The AAR has observed that the work undertaken by the appellant in pursuance of the contracts awarded to them are composite in nature, where the supply, installation and commissioning part and O & M Part, cannot be vivisected and since such composite supply, is not "pure service" but also involves supply, installation and commissioning of RO plant, the benefit of the exemption is not entitled. In this ....
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.... undertaken by the appellant are not "pure services" and for this reason also the appellant is not entitled for exemption. ln the instant case, the raw water is supplied by GCC, which is treated by the appellant, by operating and maintaining the RO plant set up for this purpose and as per the directions of GCC, the treated water is supplied to the beneficiaries, who are identified by the smart, cards issued to them. It may be observed that the scope of supply in the hands of the appellant is treatment of the water, by operating the RO plant, ensuring proper maintenance of the RO plant and distributing such water to the beneficiaries. The water does not belong to the appellant, but the same is made available to the appellant by GCC. The fact that the treated water is distributed to the beneficiaries by the appellant, would not make the services supplied by the appellant to GCC as not being pure services, as no transfer of property in goods is happening from the appellant to in favour of GCC. The raw water is the property of the GCC, which is treated and distributed to the beneficiaries by the appellant. Further, the issue, of smart card is part of the Supply contract and not part....
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....ed drinking water plants and operation and maintenance for five years. The supply of goods, which is involved only in the first component, was completed prior to the introduction of GST. Post GST, only O & M contract is operational. What is relevant to GST is only O & M contract, this component does not entail any supply of goods, and is therefore pure service. The scope of service does not include supply water, as a good, as the ownership of water is always with the corporation. The nature of supply is akin to job work. Smartcard supplied to beneficiaries remains the property of the applicant, and therefore is not a supply of goods either. He contended that the view taken by the advance ruling authority that the supply made by the applicant to the GCC is a composite supply is not correct. The moot question to be answered now is whether the supply by the applicant to the GCC is a composite supply, as has been ruled by AAR. 8. Findings as per SGST Member: One time of argument of AAR has been that the applicant has entered into a composite contract of supply of RO plant along with the maintenance of the said plant for a period of five years, and at present, the applicant is ....
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....uld be levied at the relevant rates applicable at the relevant two times of supply. In the present case, in as much as the contract provides for separate payment terms for supply and installation, and for O & M, and the times of supply of the two are distinctly different, they will have to be treated as two distinct supplies in one contract, not constituting either a composite supply or a mixed supply. Each of the two supplies will have to be taxed at relevant rates. Therefore, it is not material whether the supply and installation is made prior to or after the introduction of GST. Either way O & M component of the contract will have to be treated as a district supply, and taxed accordingly. In this case, it can be inferred now that this component is a pure service, and therefore must be taxed accordingly. This service, being supply of water, would also squarely fall within the serial number 3 of notification number 12/2017, and will therefore be exempt from tax. 9. Findings as per CGST Member: I respectfully differ from the opinion of my learned brother Member above. I find that the interpretation of the State Member is that • the supplies to be composite ....
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....intenance of the RO Plant for 5 years after commissioning. Therefore these supplies are in 'Conjunction' and are 'Composite Supplies'. The definition of 'Composite Supply' do not state that the ''time of Supply' of individual constituent supplies should be the same or at least closer to each other, the contention that, the O&M portion of the contract has only transitioned into the GST Regime and therefore only that portion which has transitioned into GST is relevant is not legally tenable. Change of taxation regime do not change the nature of the contract and only the measure/levy undergoes change. A Contract and the intentions of the parties to the contract can be understood only on reading the contracts as a whole as held by Hon'ble Apex Court in a number of Cases. In the subject contract, the appellant is vested with the works of supply, Installation, Commissioning and 'O&M' of the plants for 5 years, therefore the intention of GCC, the recipient of the 'supply' vide this contract agreement is that the appellant is to Supply, install the RO Plant in the designated places, Commission it, Operate the Plant which involves undertaking purification of the raw water supplied free of c....