TaxTMI 
TaxTMI 
2026 (2) TMI 659
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....y the petitioner, inter-alia include:- I. Mud engineering services II. Operation and management of mud plant services III. Drilling, waste management services IV. Waste management V. Fluid management services, etc. 3. The petitioner was awarded a contract by M/s. Oil India Limited for providing mud engineering and other service in relation to the works being carried out by Oil India Limited in the Krishna-Godavari (KG) basin project in the State of Andhra Pradesh. This contract was award to the petitioner by way of a letter of award, dated 30.03.2014 and a contract was executed on 08.09.2014 between the petitioner and M/s. Oil India Limited. The scope of the services, to be given by the petitioner is set out in clause-10 of the contract reads as follows:- "Clause-10: SCOPE OF SERVICE The COMPANY invites bids for the supply of the following: • Drilling, Completion and Wellbore Clean-up Fluids Chemicals. • Mud Engineering Services. • Mud Laboratory and Mud Testing Equipment. • Centrifuges, De watering, Cuttings Dryer and Filtration Packages and Services. • CONTRACTOR....
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....eering services along with supply of imported mud chemicals and additives provided on consumption basis by the Applicant under the Contract qualify as composite supply. Answer (a): No Question (b): If answer to Para (a) is yes, then whether the supplies made under the Contract merits classification under Entry 9986 (ii)-Service of exploration, mining or drilling of petroleum crude or natural gas or both and subject to GST at the rate of 12%/18% as the case may be. Answer (b): Not applicable as its replied in question (a) Question (c): If the answer to Para (a) is no, then whether such supply of mud chemicals and additives on consumption basis at OIL India's location in India provided under the Contract qualify for concessional GST rate of 5% against an Essentiality Certificate ('EC") under Notification No. 50/2017-Customs dated 30 June 2017. Answer (c): The benefits under referred Customs Notification is available to supply of such goods at the time of their importation subject to fulfillment of description, tariff item, lists and conditions specified therein and subject to the satisfaction of the Proper Officer" 7. The authority for ....
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.... advance ruling then took the view that the consideration payable under the contract was not a single price but would be depended upon the differences invoices raised for these supplies separately and individually. The appellate authority for advance ruling also took the view that the supplies of the chemicals, additives and mud engineering services are two different services and separately available and consequently, they cannot be treated to be part of the composite supply. On the basis of these findings, the appellate authority for advance ruling took the view that both supplies would have to be treated separately and the GST would have to be levied independently. 10. Aggrieved by this Order, dated 09.11.2020, the petitioner has approached this Court by way of the present Writ Petition. 11. The petitioner assails the findings of the authority for advance ruling and the findings of the appellate authority for advance ruling on the following grounds:- I. Both the authorities have not read the agreement as a whole and had picked and chosen separate parts of the contract which is impermissible in view of the Judgment of the erstwhile High Court of Andhra Pradesh, in t....
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....ted out by the appellate authority for advance ruling, these two terms are not defined or explained in the GST Act. However, the meaning of these two terms is quite clear and unambiguous. The meaning of these two terms would be to ascertain whether there is a contract, between the supplier and the person receiving supplies, which requires the supply of services as well as supply of goods. The supply of both services and the supply of goods should be an essential and intertwined part of the contract. 16. In the present case, the contract between the petitioner and M/s. Oil India Limited, is set out in the clause-10 of the contract which has been extracted above. 17. M/s. Oil India Limited, in the course of its drilling of oil, operates various oil wells. The drilling of Oil Wells, at great depths and in geological structures has to be a very careful and calibrated exercise, requiring careful management of the oil well drilling. This requires the services of Mud engineering services companies. The main task of such mud engineering experts is to maintain borehole stability and various parameters of safe and efficient oil and gas drilling. For the purposes of maintaining the nece....