TaxTMI 
TaxTMI 
2025 (6) TMI 914
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.... to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 1. FACTS AND CONTENTION - AS PER THE APPLICANT: 1.1 Applicants registered office at Flat no. 501, Plot no. 65, 5th Floor, Sharda Terraces, CBD Belapur, Navi Mumbai, Thane, Maharashtra, 400614, is engaged into the business for the provision of works contract services to its service recipients. 1.2 In the instant contract in hand, the applicant received a purchase order bearing reference no. SHAR/VAST/2018E099350101 dated 07.05.2019 from Satish Dhawan Space Centre SHAR (for the sake of brevity, hereinafter referred to as "contractee") for erection, testing and commissioning of Rail tracks meant for handling assembled staged rockets from Assembly Building to Launch pad as per the said agreed order. The said rail tracks being the civil structures are cl....
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....Testing and Commissioning: a) 20% of erection cost as advance after commencement of work at site and against submission of bank guarantee valid till erection, commissioning and acceptance by CLIP plus 60 days. b) 70% of erection cost against pro-rata progress at site duly accepted by CLIP. c) 10% of erection cost after successful commissioning and acceptance by CLIP. Copy of the above-mentioned purchase order is enclosed with this application. 2. STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW 2.1 The Relevant provision under the GST Law: - 2.1.1 Given that the subject contracts are one composite indivisible contract disguised as two independent contracts - one for supply of items and other for services rendered for erection & commissioning of Rail Tracks & Allied System of the turnkey project, it is pertinent to analyses the provision of GST Laws to determine GST liability on the composite contract: According to the section 8 of Central Goods and Services Tax Act, 2017 The tax liability on a composite or a mixed supply shall be determined in the following manner, namely: (a) a composite supply comprising two or more supp....
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....inition of works contract service if construction, fabrication, completion, erection, installation, sitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning is for immovable property only, then it will classify as works contract. Hence it means that aforesaid activities if they are undertaken for a movable property then it will not be works contract service. • Notification No. 24/2017-Central Tax (Rate) dated 21 September, 2017 read with Notification No. 46/2017-Central Tax (Rate) dated 14th November, 2017 provides that Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, provided to the Central Government, State Government, Union Territory, a local authority or a Governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other Original works meant predominantly for use other than for commerce, industry, or any other business or profession would fall under Entry 3 (vi) (a) with HSN Code 9954 attracting GST @ 12%. 2.1.3 However, ....
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....s specified against them in column (5) and shall not be levied at the rate as Specified under this entry. 9 - 2.1.4 Given the aforesaid scope of service, it is evident that the contract involves supply of multiple services along with the supply of materials during the tenure of contract and therefore it is necessary to examine through case laws whether the subject contracts are two separate independent contracts or they are, in reality, one composite indivisible contract disguised as two independent contracts - one for supply of items and other for services rendered for erection & commissioning of Rail Tracks & Allied System of the turnkey project. 2.1.5 Where parties enter into distinct and separate contracts, one for the transfer of material for monetary consideration, and the other for payment of remuneration for services and for work done, there are - ordinarily. Two agreements, though there is a single instrument embodying them. (State of Madras v. Gannon Dunkerley & Co. (Madras) Ltd. (64) 1959 SCR 379: AIR 1958 SC 560). In such cases the transaction would not be one and indivisible, but would fall into two separate agreements. (Hindustan Aeronautics Ltd. v. State ....
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.... 78 VST 451 (SC): 2015 (2) ALT 35.3 (DN SC); Larsen and Toubro Ltd. v. State of Karnataka (70) 2013 (8) SCJ 559: (2013) 65 VST 1 (SC)). The dominant nature test or "overwhelming component test" or "the degree of labour and service teste" are no longer applicable. (Kone Elevator India (P) Ltd. 67: Larsen and Toubro Ltd. (70 supra). 2.1.8 In turnkey projects, the same person is entrusted with the responsibility of procuring material, and of erection and installation of equipment. The contractors' obligations, under both the supply and erection contracts, would cease only after the turnkey project becomes operational, and after final payment is made both for supply of material and for erection and installation of equipment. Existence of a cross-fall breach clause, or a clause which enables the owner to terminate the supply contract for breach the erection contract and vice versa, would mean that, while the contracts are ostensibly two separate contracts-one for supply of material and the other for rendering works and services, they are, in fact, one single indivisible contract. The goods supplied to the owner, under the supply contracts, are tailor-made goods, and cannot be bought ....
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....commissioning of the Rail Tracks meant for Handling assembled staged rockets from Assembly Building to Launch Pad. 2.2.2 Furthermore, existence of a cross-fall breach clause, or a clause which enables the contractee to terminate the supply contract for breach of the contract and vice-versa, would mean that, while the contracts are ostensibly two separate contracts - one for supply of materials, and the other for erection and commissioning of the Rail Tracks, they are, in fact, one single indivisible contract. The contracts, is tailor made supply, and cannot be bought off the shelf. Such service cannot, ordinarily, be supplied to another except for in turnkey projects of a similar nature. 2.2.3 The Client being Satish Dhawan Space Centre SHAR is aware of such interdependence of the two contracts. Although awarded under the same PO and two-part tenders signed for execution, clauses under both of them make it abundantly clear that notwithstanding the break-up of the contract price, the contract shall, at all times, be construed as a single source responsibility contract and the Gantrex shall remain responsible to ensure execution of both the contracts to achieve successful compl....
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.... Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 attracting GST @ 18%. 03. CONTENTION - AS PER THE CONCERNED OFFICER: Brief facts of the case: The applicant received a purchase/work order bearing reference no. SHAR/VAST/2018E099350101 dated 07.05.2019 from Satish Dhawan Space Centre SHAR (for the sake of brevity, hereinafter referred to as "contractee") for supply and erection, testing and commissioning of Rail tracks meant for handling assembled staged rockets from Assembly Building to Launch pad as the said agreed order. The said rail tracks being the civil structures are classifiable under immovable property. As per the said purchase/work order the affiliate being M/s. Gantrex SPRL, registered office address at Rue du Commerce 19, Rue de Commerce Nivelles, 1400, Brabant Wallon, Belgium was responsible for execution of the supply of the enlisted items in the work order to the contractee at an agreed rate. Whereas the applicant was responsible for the erection & commissioning part. of the items supplied by its affiliate to the contractee at an agreed price of Rs. 2,21,84,000/- including GST @18%. The said contract spreads over a period of 13 months where the ....
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....that makes it qualify as a 'work contracts'. Hence it is concluded by SHAR that the applicable GST rate in this case is as defined under the SAC Code 9954 i.e 12% under the following sub-Clause as SDSC SHAR, ISRO being a Central Government Organization under Department of Space. As per Serial no. 3(vi)a Of Notification No. 11/2017-Central Tax (Rate) New Delhi, the 28th June,2017 [(vi) [Composite supply of works contract as defined in clause (119) of section 2 of the Telangana Goods and Services Tax Act, 2017 [other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above] 27, provided] 28 to the Central Government, State Government, [Union territory or a local authority] 29] 30 by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; rate of tax applicable is 12%. Comment by this office: Notification No. 11/2017-Central Tax New Delhi, the 28th June, is amended several times. It notifies in serial number 3 that, [(....
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....ax at the rate 18%. When the buyer requests changes to an order after the invoice was issued, credit not must be issued by the supplier. As per GST act 2017 " section 34(1) If a seller has charged too much tax or the value of the goods or services in the invoice is higher than it should be, or if the buyer returns the goods, or if the goods or services are not up to standard, then the seller can give the buyer a 'credit note'. when a tax invoice is issued, and the same is required to be amended to reduce the tax liability mentioned in it, the supplier can issue a credit note. A supplier can issue a credit note against a Tax Invoice on or before 30th September of the next financial year or the date of filing of annual return pertaining to the Tax Invoice, whichever is earlier" Also, the time limit to avail Input Tax Credit ("ITC") in respect of any invoice or debit note under Section 16(4) of the CGST Act, through any return in FORM GSTR 3B filed upto November 30, 2021 for the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, was November 30, 2021. In the instant case, if the change in rate is applied and tax is reduced, the due date of issuing credit note and availing ITC t....
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....ernment of India. The center provides world class launch base infrastructure for national and international customers in accomplishing diverse launch vehicle/satellite missions for remote sensing, communication, navigation and scientific purposes. More particularly, we find that SDSC issued a purchase / work order No. SHAR/VAST/2018E099350101 dated 7.5.2019 to M/s. Gantrex SRP, Rue Du Commerce 19, Rue du commerce Nivelles, 1400, Brabant Wallon, Belgium for supply of Rails. Fish plates and clips. In the same order, the work of erection and commissioning of the rail track was awarded to the applicant i.e. M/s. Gantrex India Crane Rails Pvt. Ltd. The work comprises of erection and commissioning of rail tracks meant for handling assembled staged rockets from Assembly Building to Launch Pad. 5.2. Ongoing through the purchase order/work order, we find that the order has been divided into two portions i.e. one for supply of goods and one for providing service of erection and commissioning. The contract for the first portion for supply of goods has been awarded to M/s. Gantrex SRP, Belgium while the work of erecting and commissioning of the rail tracks has been given to the applicant. ....
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....ly expect such services to be provided as a package, then such a package could be treated as naturally bundled in the ordinary course of business. b) Majority of service providers in a particular area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines. c) Nature of the services offered is such that one is the main service and the other services combined with such a service are ancillary. d) Other illustrative indicators, not determinative but indicative of bundling of services in ordinary course of business are - There is a single price or the customer pays the same amount, no matter how much of the package they actually receive or use. The elements are normally advertised as a package. The different elements are not available separately. The different elements are integral to one overall supply - if one or more is removed, the nature of the supply would be affected. We find that in order to qualify as a composite supply, the supply has to be made by a taxable person. In the instant case, the goods are being....
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.... and clearly divisible and distinct, where both consideration and liability for breach of contract are distinct and separate on both the suppliers. 5.5. We find that the service provided by the applicant is in the nature of erection and commissioning of rail line from the Assembly Building to the Launch Pad. The rail line, fish plates and other goods necessary for the said service is provided by the client i.e. SDSC, SHAR and the applicant only provides their services of erecting and commissioning of the rail line as required by the client. Since no goods are supplied by the applicant, consequently, no goods are transferred from and therefore, it can be held the supply of service by the applicant does not involve transfer of property in goods. In view of the said fact, we hold that the service provided by the applicant to SDSC would not qualify as a works contract service. We find that as per Para 4.3.2 of the Tender Document, Supplier shall provide all supervision, labour, tools, machines, cranes, equipment, scaffolding, rigging material and incidental material such as bolts, wedges, anchors, etc. required to complete the works. Supplier shall also provide at his own cost all s....
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....ind that the applicant has specifically asked whether the services of erection and commissioning of rail tracks provided by them is classifiable under S. No. 3 (vi) (a) of Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017. We find that Sr. No. 3 (vi) of the said notification has been deleted with effect from 18.7.2022 vide Notification No. 3/2022 CT (Rate) dated 13.7.2022. The details of the said SI. No. 3 (vi)(a) prior to its deletion is as under: - S. No. Chapter, Section or Heading Description of Service Rate (Percent) Condition 3 9954 vi) Composite supply of works contract as defined in clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017, provided to the Central Government, State Government, Union Territory, a local authority a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; 6 (Provided that where the services are supplied to a Government entity, they should have ....