AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 786
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted 20.01.2021. 3. Brief facts of the case: 3.1 M/s Shilchar Technologies Limited, Bil Road, Bil, Vadodara- 391410 (hereinafter referred to as 'the appellant'), holding GSTIN: 24AADCS3108B1Z2, are manufactures of Electronics and Telecom and Power & Distribution Transformers. 3.2 The appellant submitted that M/s Adani Green Energy Limited (herein after referred as 'M/s AGEL') had been granted an approval by the Ministry of New & Renewable Energy for developing and setting up a 75MW Solar Project at Chitrakoot, Uttar Pradesh (UPNEDA Project). For the initial setting of the Solar Project, M/s AGEL required machines, equipment, power cables, transformers and many other parts & components of the Solar Power Plant. 3.2.1 The appellant received an order No. 4500315135 dated 08.11.2019 from M/s AGEL, for supply of 5/6.25MVA ONAN/ONAF 33/0 8/0 8KV 'Aluminum Foil Type Winding Inverter Duty Transformers'(IDT) falling under Chapter Heading 8504 along with the mandatory spares for Transformers. According to the appellant their recipient of supply M/s. AGEL had confirmed that the said goods are parts of the Solar Power Generating System and will be used only for the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion inserted vide Entry No. 234 of Noti. No. 01/2017-CT (Rate) dated 28.06.2017 vide Notification No. 24/2018-CT (Rate) dated 31.12.2018. Explanation stated that out of the gross value of the supply, 70% shall be deemed to be on account of goods and 30% deemed to be on account of service. Accordingly, the effective rate came to 8.9%) as under: S.No. Particulars % of value Rate of tax Effective rate of tax 1. Goods 70 5% 3.5% 2. Services 30 18% 5.4% TOTAL 8.9% 5. Being aggrieved with the above Ruling, the appellant has preferred the present appeal on the following grounds:- (a) That not in all but in the case of one or few purchase orders, appellant received a separate service order by filling the tender issued by the recipient of supply as supplying service is not the regular business of the appellant. Therefore testing service shall not be required to be executed with every supply of goods. That when two contracts are separate and in all cases when service itself is not involved the question of 18% deeming 30% as value of service does not arise. (b) That the purchase order 4500315135 dated 08.11.2019 for supply of Aluminum Foil Type Winding Inverter Duty Tran....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nical team/third persons. The clarification as provided at Sr. No 2 of Circular No. 47/21/2018-GST wherein it is stated that if value of goods and services supplied are shown separately, then the goods and services would be liable to tax at the rates as applicable to such goods and services separately. (g) Further, Supervision of erection and commissioning falls under Service Accounting Code (SAC) 9985 and not covered under any of the SAC falling within the scope of Notification No. 11/2017-CT (Rate) as amended. (h) As regards the inability to produce the copies of the contract, the appellant submitted that it is a normal practice in the country to act based on the purchase order awarded and hence there is no formal contract being entered into with the recipient of supply other than the copies of PO produced before the authorities. 5.1 During the course of virtual personal hearing held on 08.09.2022, the advocate for the appellant, Shri Dhruvank Parikh reiterated the submissions made also furnished additional written submissions vide which it was submitted that:- (i) They were never involved in the transaction of Works Contract as defined in Section 2(119) of the CGST Act, 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate of GST thereon, shall not be applicable to the appellant. Discussions and Findings: 6. We have gone through the facts of the case as submitted in the Appeal papers, the Ruling of the GAAR, documents on record and oral as well as all the written submissions made by the appellant. 6.1 We find that in the ruling sought by the appellant there are two parts. The first part is, as to whether supply of Aluminium Foil Type Winding Inverter Duty Transformer classifiable under Chapter Heading 8504 and parts of Transformer supplied/ to be supplied for initial setting up of solar project falls under Sr.234 in Schedule-I to Notification No.01/2017-Central Tax (Rate) dated 28.06.2017. The second part is as to whether the said supply will be liable to Central GST at the rate of 2.5% alongwith State GST at the rate of 2.5%. 6.2 The GAAR in its findings held that Aluminium Foil Type Winding Inverter Duty Transformer and their parts are an essential part/ device of Solar Power Generating System and ruled that, "the applicant is liable for payment of GST on the total value of both the purchase order i.e supply of goods and supply of service in terms of explanation inserted vide Entry No. 234 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... submitted the following:- a. M/s Adani Green Energy Limited (M/s. AGEL) the recipient of supply, was developing and setting up a 75 mw Solar project at Chitrakoo, Uttar Pradesh (UPNEDA Project) for which the approval had been granted to them from Ministry of New and Renewable Energy. b. The recipient of supply M/s. AGEL awarded the contract for supply of Aluminum Winding Inverter Duty Transformer to be procured for 50MW Solar Project at Jalabad, 50MW Solar Project at Sahaswan and 50+25MW i.e 75MW Solar Project at Chitrakoot Uttar Pradesh to the appellant. c. The Technical specification issued by the recipient of supply for this contract contains scope of supply and services along with the intent of specification. d. Thus services are also included, the recipient of supply of service has issued a separate Service Order No. 5700280769 dated 23.12.2019 for supervision of erection, testing and commissioning charges for the transformer to be supplied/supplied by the appellant. That the appellant would be charging 18% GST on the same as the same is classified as service. 9.1 On going through the contents of the application, it is found that the appellant had not named M/s Adani....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions the following:- 2.1.0 The scope of supply shall Cover Design, Engineering, Manufacture, Assembly and Testing at Works, Packing/Dispatch, Transportation to site with Transit Insurance and Supervision of erection, testing & commissioning of the Transformer complete with all fittings and accessories. 2.2.0 The scope of supply shall also include the following:- a) First fill of consumables. b) Spare parts required for successful commissioning c) Mandatory spare parts for three years trouble free operation & maintenance. 2.3.0 Scope of services,- a) Preparation and submission of drawings & document in soft form as per the drawing/document submission schedule. b) Supervision of erection, testing & commissioning of transformer. c) Submission of progress report. d) Participation in project review/technical coordination meetings. 10.2 From the above submissions made before the GAAR, it can be seen that the appellant had solely relied and discussed the clauses mentioned in the Technical Specification issued by M/s AGEL in support of their arguments. Since no other documents were produced before GAAR other than what has been discussed above, we do not find any error....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion with the Aluminum Winding Inverter Duty Transformers which was manufactured and supplied by the appellant. Since the aforesaid clauses discussed above show that the contracts have been artificially split into two separate contracts, one for supply of material and other for rendering services but they are in fact one single contract. The goods supplied by the appellant are for the purpose of initial setting up of the Solar Power Generating System. It is also noted that in the Purchase order No. 4500315135 dated 08.11.2019 of M/s AGEL who has placed this order has been referred as 'the Employer' whereas in the Sendee Order No. 500280769 dated 23.12.2019, it is seen that the reference is that of 'Owner' and both the orders have been signed by the Buyer's authorized signatory. In fact, the signature of the 'Authorized Signatory' appearing on the Purchase Order and Service Order appears to be the same for both M/s AGEL and M/s Adani Solar Energy Chitrakoot One Ltd. The supply in question is a one involving both supply of goods and associated services and are to be supplied by the appellant. From the above discussion, we find that the supply of goods and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....voltaic cells, whether or not assembled in modules or made up into panels Explanation: If the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and services, one of which being a taxable service specified in the entry at S. No. 38 of the Table mentioned in the notification No. 11/2017-Central Tax (Rate), dated 28th June, 2017 [G.S.R. 690(E)], the value of supply of goods for the purposes of this entry shall be deemed as seventy per cent, of the gross consideration charged for all such supplies, and the remaining thirty per cent, of the gross consideration charged shall be deemed as value of the said taxable service. The details of entry at S. No.38 of the Table mentioned in the notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended vide Notification No. 27/2018-Central Tax (Rate) dated 31.12.2018 is reproduced below: S.No. Chapter, Section or Heading Description of Service Rate (%) Condition (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, - (a) Bio-gas plant (b) Solar pow....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Further they relied on the decision in the case of M/s Apar Industries Limited in advance Ruling Appeal No. GUJ/GAAR/APPEAL/2022/14 order dated 12.07.2022. We find that the facts and circumstances in the case of M/s Apar Industries Ltd are totally different and cannot be considered relevant in the present case. 16. Therefore, on the basis of the above discussion of the clauses mentioned in the documents submitted by the appellant, it can be concluded that the activities relating to supply of the transformers and the supervision of the erection, testing and commissioning of the transformers supplied by the appellant are inextricable and for the purpose of supply of transformer which would be used in initial setting up of the Solar Pow er Plant. The activities to be performed based on the two contracts discussed herein are interdependent and contribute to setting up of the Solar Power Generating System as per the Project Requirements. From the explanation provided against Entry No.234 appearing under Schedule-I to the Notification No.01/2017-IT (Rate) dated 28.06.2017 which states "If the goods specified in this entry are supplied, by a supplier, along with supplies of other goods ....