AI Drafter 
TaxTMI 
TaxTMI 
2021 (2) TMI 1292
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....204-206, Anukampa, First Floor, MI Road, Ajmeri Gate, Jaipur-302001, Rajasthan - (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (a) given as under:- a. Classification of goods and / or services or both Further, the applicant being a registered person (GSTIN is 08AAAFZ2103K1ZA as per the declaration given by him in Form ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling. A. SUBMISSION AND INTERPRETATION OF THE APPLICANT: 1. M/s Zuberi Engineering Company (hereinafter referred to as "applicant"), having its registered address as Anukampa 1st, M.I. Road Jaipur is a partnership firm engaged in undertaking multidisciplinary projects on turnkey basis for Power Plants, Industrial Plants, Cement Industries, Fertilizer Industries, Mining Industries, Steel Pl ants & Oil Refineries. 2. That the applicant is registered under GST as per the provisions of the GST laws bearing GSTIN 08AAAFZ2103K1ZA in the state of Rajasthan. 3. That the applicant has to....
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....tionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply; 9. The term "services" has been defined under section 2(102) as (102) "services" means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; 10. According to Section 9 of the Central Goods and Services Tax Act 2017 which is charging section for GST 9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. 11. The GST rates on goods have ....
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.... Sub-section (i) dated 28th June, 201 7 vide GSR number 673(E) dated 28th June, 2017. 9 - 13. On a conjunctive reading and analysis of above entries in Tariff Schedule of goods and services, the rate of GST on a supply involving goods falling under Entry 234 of Goods Tariff Schedule and services falling under Entry 38 of Services Tariff Notification comes to 8.9% of the gross consideration, being arrived as under: • (5% of 70% of gross consideration + 18% of 30% of gross consideration) = 8.9% of gross consideration FACTS AND APPLICATION OF PROVISIONS IN APPLICANT'S CASE 1. In order to derive the classification of the supply to be undertaken by the applicant, primarily the nature of activity to be undertaken by the applicant needs to be understood. 2. A clause of PROJECT PROFILE /INTRODUCTION TO PROJECT is given in Volume-I (TECHNICAL BID) of Tender Document from where extract of Introduction to Project is reproduced as under: Introduction and History Ambapura Lift Irrigation Project is proposed in Mahi dam submergence area near village Padla of Banswara District. The water lift from Mahi dam reservoir for irrigation purpose in the command ar....
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....n the major components and subsystems as per MNRE guidelines and other standards. As the solar power can be produced during 8 hours a day and power will be required during all 24 hours, employer need to enter in power wheeling and banking agreement with DISCOM for uninterrupted supply and banking of surplus and deficient power. 6. On the basis of meticulous reading of the complete Tender document and focusing the relevant clauses as highlighted above, it is understood that the broad scope of work includes construction of a sprinkler irrigation system including supply of materials to be operated on solar power generated by a Solar Power Generating System to be constructed and commissioned as part of the EPC contract. 7. Now, moving on to the classification of said supply involving supply of goods as well as services, firstly the relevant Tariff item of the goods should be recognized. 8. As per the understanding of the applicant, the HSN Code of the irrigation sprinkler system should be 8424 falling under the below highlighted entry of Chapter 84 as specified in the First Schedule to the Customs Tariff Act, 1975 which has to be referred as Tariff Item for GST Tariff Sched....
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....eading 9954 Construction services 12 Group 99542 General construction services of civil engineering works 14 995422 General construction services of harbours, waterways, dams, water mains and lines, irrigation and other waterworks 13. Further, HSN 9954 is covered under Entry 38 of Notification 11/2017-CT (Rate) where the relevant entry for construction services in relation to solar power based devices is notified being taxable at the rate of 18% and the relevant extract of the said entry is as under: (1) (2) (3) (4) (5) "38 9954 or 9983 or 9987 Service by way of construction or engineering or installation or other technical services, provided in relation of setting up of following, (b) Solar power based devices (c) Solar power generating system 9 -" Explanation: - This entry shall be read in conjunction with serial number 234 of Schedule I of the notification No. 1/2017- Central Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated 28th June, 2017 vide GSR number 673(E) dated 28th June, 2017. 14. The services of construction and installat....
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....T, Division - I, Jaipur vide letter dated 13.08.2020 are reproduced as under:- 1. The M/s Zuberi Engineering Company i.e. the applicant has to undertake an EPC on turnkey basis in respect of a tender floated by water resource department, a unit of Govt, of Raj. For pressurized irrigation (Sprinkler System) including Construction of Intake well, pump house, panel room and supply, erecting/laying, testing commissioning submerge V.T. Pumps, rising mains, distribution network of pipeline at Chaks, O and M for eight years including installation of solar power unit of 5*100 KW capacity, EPC contract on turnkey basis, as mentioned by the applicant in their form GST ARA-01 dated 13.05.2020. 2. The applicant has sought advance ruling on classification of any Goods or Services or both through their GST ARA-01 dated 13.05.2020. The GST rate on goods have been notified by the Govt, in notification no. 01/2017-Central Tax(Rate) dated 28.06.2017 which has been amended by various Notifications, wherein it has been described as follows: - Sl.No. Chapter Description 234 84, 85 or 94 Following renewable energy devices and part for their manufacture:- a) Bio ....
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....the levy of rate of duty on goods as well as services. This notification is totally applicable for the goods/services covered under chapter-84, 85 or 94 & there is no ambiguity on the levy of taxes. Therefore, this application is not fit for consideration under the advance ruling. It is also submitted that Turnkey project are always changeable during project period so this office cannot comment on the applicability of rate of levy of taxes, of the project contract as submitted by the party. E. FINDINGS, ANALYSIS & CONCLUSION: 1. We have considered the submissions in their application and also during personal hearing made by the applicant. We have also gone through the tender document issued by Water Resources Department of Government of Rajasthan for awarding EPC contract for pressurized Irrigation (Sprinkler System) including Construction of Intake well, Pump House, Panel Room and Supply, Erecting/Laying, Testing Commissioning Submerge V. T. Pumps, Rising Mains, Distribution network of Pipe Line at Chaks, O & M for Eight years including installation of Solar Power unit of 5x100 KW capacity, EPC contract on turnkey. 2. The applicant has contended that the lift irrigatio....
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....ry shall be read in conjunction with serial number 234 of Schedule I of the notification No. 1/2017- Central Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated 28th June, 201 7 vide GSR number 673(E) dated 28th June, 2017. 3. Now the question arises whether the supply to be made by the appellant would be covered under the term "Solar power devices" or otherwise. Solar power device has not been defined under GST law. A device means an object, the Oxford dictionary defines 'device' as 'an object or a piece of equipment that has been designed to do a particular job: Further, Solar power device means: - Device which uses solar energy directly as heat or convert it into electricity, i.e. solar cooker, solar lamp, solar dryer etc. Whereas, as per tender documents floated by water resources Department Government of Rajasthan the applicant has to undertake a Supply of a complete irrigation Project starting from survey, investigation designing & details planning including land acquisition (private & forest) for Ambapura lift irrigation scheme for pressurized Irrigation (Sprinkler System) includi....
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....ious goods and services are involved in setting of the project. The contractor has to start from the scratch and bring into existence a fully operational irrigation project. The execution of the project would also involve the transfer of property in goods. 5. In light of these fact, we examine the definition of work contract as provided under Section 2(119) of the CGST Act 2017 which reads 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 (whether as goods or in some other form) is involved in the execution of such contract; The tender is for the engineering, procurement and commissioning of the sprinkler system based irrigation project including the installation of Solar Power units and what would be transferred is the entire irrigation project including the Civil work and land involved in project. Private and forest land would be acquired, civil structure would be created and various equipment would be installed. The said ....
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....eration or commissioning is for immovable property, only then it will be classified as works contract. 11. Further, we observe that the activity proposed to be undertaken is a composite supply of works contract, the rate of tax in given service shall be determined in accordance with the Notification No 11/2017-CT (Rate) dated 28.06.2017, as amended from time to time. The relevant portion of the S. No. 3(Heading 9954) (iii) of the Notification No 11/2017-CT (Rate) dated 28.06.2017 (as amended) is as under: - Heading 9954 (Construction services) CGST Rate % SGST Rate % IGST Rate % Remarks (iii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, - (a) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient ....