TaxTMI 
TaxTMI 
2025 (11) TMI 111
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....ss a mention is particularly made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mean reference to the corresponding similar provisions in the APGST Act, 2017. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The applicant has paid fees Rs. 5,000/- under SGST (25073700077234 dated 17.07.2025), and another Rs. 5,000/- under CGST (25073700077234 dated 17.07.2025) towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided by nor are pending before any authority under any provisions of the GST Act. 4. Brief Facts of the case: * M/s Greater Visakhapatnam Smart City Corporation Limited(GVSCCL) is a special purpose vehicle (SPV) incorporated as Public Limited Company under the Companies Act, 2013, owned by the State Government of Andhra Pradesh and the Greater Visakhapatnam Municipal Corporation (GVMC) on 50:50 paid up capital and shall be governed as per the rules and guidelines issued by the Government of India and the State Government from time to time. * The aim of the SPV is to drive economic growth and impro....
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.... 4. Further clause 9 of the tripartite agreement towards supply of recycled water specifies that Metering for determining the exact quantities of the Product supplied shall be done at the Delivery Point in the premises of HPCL. GVSCCL shall install a meter with a standby at the Delivery Point i.e. M/s HPCL. 5. In continuation to above facts, the renewed tripartite agreement dated 10.06.2025 contained the clause for levy of charges for maintenance of meters, instrumentation, automation etc at the rate of 0.75% of monthly supply of recycled water bill. 6. GVSCCL has installed only flow meters in the premises of M/s HPCL to measure recycled water and there is no other instrumentation/automation of GVSCCL installed at the premises of M/s HPCL. 7. Further the definition of composite supply as per CGST act 2107 is as below: "A composite supply means a supply made by a taxable person to a recipient comprising two or more supplies of goods or services or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply" 5. Questions raised before the authority: T....
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.... provide separately by any third party in ordinary course of business. For providing these services such as calibration of up keeping of meters is required certain technical expertise are required. In ordinary course of business, the services engaged by the third-party agencies. Hence the maintenance of flow meters and supply of recycled water do not constitute as composite supply. The supply of recycled water constitutes a taxable supply under Section 7 of the CGST Act, 2017. However, the same is exempted from GST under Sr. No. 99 of Notification No. 02/2017-CT (Rate), dated 28.06.2017, as already clarified in the earlier Advance Ruling pronounced by the Andhra Pradesh Authority for Advance Ruling (AAR). The installation of flow meters and their subsequent maintenance are distinct supplies, with maintenance services falling under SAC 9987, taxable at 18%. 6. Applicant's Interpretation of Law: 6.1 Statement containing the Applicant's interpretation of law and/or facts, as the case may be, in respect of the questions(s) on which advance ruling is sought The applicant submitted that the supply of recycled water constitutes the principal supply, and the installation an....
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....all be done at the delivery point in HPCL's premises, and GVSCCL shall install and maintain the flow meters. The renewed agreement dated 10.06.2025 provides for levy of charges at the rate of 0.75% of the monthly recycled water bill towards maintenance of meters, instrumentation, and automation systems. 8.4 It is noticed that GVSCCL has installed only flow meters at the consumer's end to record water flow. There are no other automation or instrumentation systems involved at HPCL's premises. The maintenance charges are being collected separately on a monthly basis as a percentage of the recycled water supply bill. The issue for determination is whether such maintenance of flow meters constitutes a part of a composite supply along with the supply of recycled water, and if not, what rate of GST and classification would be applicable for such activity. 8.5 The applicant has contended that the supply of recycled water is the principal supply and the maintenance of flow meters is ancillary to it, being necessary for measurement and continuity of water supply. It was argued that since the meters serve the purpose of quantifying water supplied, the maintenance thereof is integrally c....
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....ervices relate. Such normal and frequent practices adopted in a business can be ascertained from several indicators few of which are listed below - ♦ The perception of the consumer or the service receiver. If large number of service receivers of such bundle of services reasonably 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.[emphasis added] ♦ 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. ♦ The nature of the various services in a bundle of services will also help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. For example service of stay in a hotel is often combined with a service or laundering of 3-4 items of clothing f....
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....ner that is naturally bundled in the ordinary course of business, so as to fall within the scope of a composite supply. This threshold determination is a prerequisite for any further analysis on the merits of the case. 8.10 The relevant paragraphs of the Amended Tripartite agreement dated 10.6.2025 relating to 'Supply price for the Product and Clear Water' and 'Metering and Calibration' are extracted hereunder for an immediate reference: 5. Supply Price for the Product and Clear Water: (a) Supply by GVSCCL (Product): i. The supply Price of the Product payable by HPCL to GVSCCL for the supply of the Product will be Rs. 59.85/- per KL (inclusive of all taxes) from 1st July 2024 and Rs. 62.85/- per KL (inclusive of all taxes) w.e.f 1 July 2025 and thereon with 5% escalation every successive year. ii. HPCL shall be charged for at least 60% of the Contracted Quantity of Product per month (Contracted Quantity of Product per month is defined as 66.2 LIGD (30.10 MLD x number of days in that particular month) if the quantity of Product consumed in a month is less than 60% of the Contracted quantity. iii. HPCL shall be charged for the actual qu....
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....-laws as framed and amended from time to time by the GVMC shall form part of this Agreement to the extent they are consistent with the provisions hereof. 9. Metering and Calibration (a) Product: i. Metering for determining the exact quantities of the Product supplied shall be done at the Delivery Point in the premises of HPCL. GVSCCL shall install a meter with a standby at the Delivery Point. ii. Periodical calibration of the meter shall be carried out by GVSCCL. iii. HPCL shall provide adequate space (2m x 2m) for installation of the water meters. iv. Power requirement for the metering station shall be provided by HPCL while power backup by way of UPS shall be provided by GVSCCL. (b) Clear Water: i. The metering and connected automation will be arranged immediately at the tapping point of GVMC water supply main. 8.11 It is pertinent to note that as per the provisions contained in Para 5(a)(vi) and 5(b)(vi) of the agreement executed between the parties, it is explicitly stipulated that Greater Visakhapatnam Municipal Corporation (GVMC) and Greater Visakhapatnam Smart City Corporation Limited (GVSCCL) are lev....