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TMI Blog2018 (10) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... Water Supply Schemes with solar powered pumps and suitable treatment plants (aeration and activated carbon based) for removal of excessive iron from the Iron affected habitations of 9 districts on TURNKEY basis with 3 months trial runs after commissioning and comprehensive of 60 months after successful completion of trial run period” had been approved. The applicant has been awarded a contract for supply of water after removal of excess iron and to supply all goods and services for achieving the objective of supplying water after removing excess iron - From the work details submitted by the applicant it is very clear that the entire contact is in the form of a composite contract consisting of supply of goods and services and Where the main intention is to drinking water to the villages after removing excess Iron impurities and which therefore would be the main part of the contract. Here it would not be out of place to mention that the applicant is claiming that the work performed by them are 'water treatment schemes' and not 'water purification schemes'. The work done by them is a composite supply which attracts the provisions of Notification No. 11/2017-Central Tax (Rate) da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST GST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the GST Act . 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submission (Brief facts of the case), as reproduced verbatim, could be seen thus - FACTS OF THE CASE Nature of Work, Design, Construction, Supply commissioning of 200 mini piped water supply schemes with solar operated pump suitable treatment plant for removal of excessive Iron in Iron affected habitations of nine districts in the State of Bihar. Scheme is comprising of: 1) Drilling of tube well. 2) Solar panels its system to run the pump, and take the water through treatment plant and reach water to 5.95 overhead tank at 7 meter height 3) Iron Removal treatment plant 4) Mild Steel Staging (Steel Structure) for supporting overhead tank of 5000 Litre capacity enthusing treatmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as on date: The contract is issued by Public Health Engineering Department (PHED) of Bihar Government and till now (30h June 2017) they have been deducting VAT against each of supply and the work carried out and we have been filing VAT returns in Bihar State through proper channel. This has been a composite supply that needs to be noted specifically. Till date no import duty not excise duty was laviable since this was executed under Govt. of India's Notification. Notification 47/2002, 91-92-93/2002 cus, 6/2002 Excise and amended time to time and also followed by various circulars by Ministry of Finance and Company Affairs Department of Revenue, Tax Research Units etc. of Government of India clearly states that the duty exemptions (Excise and Customs) are given for setting up of the drinking water treatment plants meant for human and animal consumptions and in the interest of the citizen of the country and each scheme works only on SOLAR POWER. Such schemes being developed for the first time in the country, has been recognized as an INNOV ATION by the Ministry Of Rural Drinking Water Sanitation through Department of Science Technology in the year 2015. Our App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se connections of size 80 mm c40 mm 5.34 8. Automatic multiport valves operating on battery that is charged through solar energy 1.9425 9. House to house connections... 100 nos 1.75 Nature scope of work: It's supply, erection and commissioning of a house to house drinking water supply schemes being installed in rural part of villages in the state of Bihar. These schemes operate of a specially developed technology and it exclusively work only on SOLAR POWER. Purchase of the items are done in the form of composite supply where each sub-assembly is supplied and the assembly work of various sub-assemblies and thereafter integration of such sub-assemblies together is done at site in a rural village allotted by the local Govt. Tube Well: A tube well is dug in the ground and thereafter PVC pipes are inserted and assembled in the tube well by putting gravel around the pipes with strainer assembly at the bottom end of the tube well. Thereafter flushing of the tube well is done by an air compressor to ensure smooth supply of water ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teners. Entire production with prefabrication sequence is worked out in the factory and it is eventually assembled at site just in couple of days. Once the interconnecting piping is done right from the stage of tube well, overhead tank, treatment plant, and the distribution lines are completed, the scheme is started through connection of solar system. 7. Pipe Laying and house to house connections: GI pipes are laid down in the ground and branches are brought closure to each house and house to house pipe connections are provided using CPVC pipes. A typical lay out of assembly done at house to house is seen in an as build picture. The entire work is based on innovative design, engineering and each of the item is engineered and pre-fabricated in the factory and taken to the site and in a particular sequence it is assembled and the entire work is simplified to make it screwdriver technology and simply assembled at site. Since it is having interconnections with individual sub-assemblies and all such subassemblies are finally connected, it is treated as composite supply and the water supply gets started house to house for drinking water. Such system work only on the solar pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough joint funding of State Central Government of India. 5. Central Government till date has been giving benefit of Customs Excise Duty so also Service Tax under till such new law introduced in July 2017. 6. We are offering a solution and thus a product Safe drinking water even as spelt out in the PO given by the State Govt. Of Bihar through such innovation and by no way we believe can be categorized in the SERVICE group as deemed fit since there is no provision in the new GST law for water such solutions. In fact this is the reason we have approached eminent apex body like yours. 7. These schemes work on purely SOLAR POWER which is a nonconventional energy which otherwise is being promoted by the Govt. of India with MINIMUM DUTIES. 8. These are the water treatment schemes and not water purification schemes and the plant that we have designed, engineered through our innovative approach is converted as screw driver technology that involves over 95% of just an assembly work at site. 9. We could not find the appropriate HSN code for such unique scheme hence could not find appropriate GST tax. 10. Our humble request has been just not to find somehow a place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 20.06.2012 5] (A) classification of service/services as applicable. Centrifuges, including centrifugal dryers, filtering or purifying machinering apparent, for liquids for filtering, or purifying water, household filters etc. (b) Rate of service tax as applicable to services provided. 12.36% Details of benefits of notification of central excise tax if availed. 6] Copies of Advance ruling applications/orders if any obtained you under the provisions of central excise or service to the sales tax there presents status in your company related company or sister concern. Form GST ARA-01, Advance Ruling 7] Copy of show cause Notice/ Adjudication orders in respect of central Excises or service tax if any issued during the last five years, in case of your company related company or sister concern. No. 8] Cases of violation of central excises/ services tax if any booked during last five years. No. 9] Whether any proceeding is pending be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for setting-up drinking water projects will be subject to GST at a rate of 18 percent when procured domestically; the same shall become a cost for the project. 8) In case, where the output services are exempted from GST, proportionate Input Tax Credit (ITC) attributable to exempted services shall be disallowed and become a cost for the consultant/contractors, due to which, the overall cost of services will increase. Here is a summary of the overall impact of the changes in the tax laws: 1) Under the Old tax regime, specific tax concessions Were available in relation to excise duty on procurement of equipment and plant required for water projects in India. However, under the GST regime, cost in relation to procurement of domestic equipment and plant for setting up a water project is subject to tax at a rate of 18 percent. This Will lead to overall increase in the capital expenditure cost for the client. 2) Under the old tax system, counter vailing duty (CVD) and Special additional duty (SAD) were exempted on the imported equipment and machinery required for water projects. The water project falls under category of project imports and special privilege was given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Effective From Cess (%) Related Export/Import HSN Code 2201 Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, demineralized and water sold in sealed container] NIL 28/06/2017 NIL 22011010, 22011020, 22019090 04. HEARING The case was taken up for preliminary hearing on dt. 05.06.2018, with respect to admission or rejection of the application when Sh. Dilip V. Satbhai, C.A. alongwith Sh. Subhash L. Devi Chairman and Smt. Pratibha S Devi, Advocate appeared and requested for admission of application as per their contentions in ARA application. The jurisdictional officer, Sh. M. K. Lawate, Dy. Commr. of S.T.(PUN-VAT-E-706), Pune appeared and made written submissions. The application was admitted and final hearing was held on 04.07.2018, Sh. Dilip V. Satbhai, C.A. alongwith Sh. Subhash L. Devi Chairman and Smt. Pratibha S Devi, Advocate appeared and made submissions which were taken on record. The jurisdictional officer, Sh. M. K. Lawate, Dy. Commr. of S.T.(PUN-VAT-E-706), Pune appeared and made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the finally a 5000 Litre PVC tank is kept on the top of the structure. Foundation bolts get tightened provided on the civil structure. G I Sheet enclosure assembly en-housing treatment plant: This consists of assembly and fixing of GI sheet around the bottom part of steel structure in which assembly of treatment plant is carried out. Solar Panel Assembly: Large size Solar panels are assembled and interconnected once the structure is ready. Once this is done on the top of the structure, safety railing taken to site in prefabricated manner are assembled using appropriate size of nuts and bolts. Treatment plant: This is also pre-fabricated in their factory as per design and assembled at site as per the drawings. This is connected with interconnecting piping and CPVC unions and fittings are used for assemblies. Instruments and flow meters are also interconnected at site with the help of appropriate fasteners. Entire production with prefabrication sequence is worked out in the factory and it is eventually assembled at site. Once the interconnecting piping is done right from the stage of tube well, overhead tank, treatment plant, and the distribution lines are complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a local authority or a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, - (a) ; (b) ; (c) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal. 6 Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union Territory, or a local authority, as the case may be. A plain reading of Sr. No. 3, clause (iii) reveals that 'composite supply of WCS supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal attracts a tax rate of 6% each of CGST and SGST. However, the benefit of 12% tax rate would be available to the applicant only if the Works Contract services provided ..... X X X X Extracts X X X X X X X X Extracts X X X X
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