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TMI Blog2019 (2) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... herein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract” Existence of immovable property or not which is transferred in the execution of the contract - Held that:- The work of applicant involves supply, erection, testing and commissioning including transport, loading, unloading, insurance etc of transformer substations, HT & LT Overhead Line & Cable Through Underground. Their EPC contract for electrical cable supply and laying work can be classified as contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract - there are no hesitation in holding that the applicant is supplying Works Contract Services. It is also apparent that the nature of the works undertaken by the applicant are not in the nature of ‘Original Works’ as per detailed discussions in the latter part of the findings. Works contract or not? - applicability of N/N. 11/2017-Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Whether EPC Contract for electrical cable supply and laying work can be classified as contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. 2 Whether these contracts can be classified as works contracts as per GST Law and whether notification no. 11/2017-Central Tax (Rate) dated 28th June 2017 as amended by notification Tax (Rate) dated 25th Jan 2018 is applicable to the present case? At the outset, we would like 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 such 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, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcavation of earth and can be re-installed at other place. The cable is embedded in earth for safety of human and cable itself. The name of the work itself says Shifting providing 315 KVA transformer substation HT LT Overhead Line Cable Through Underground, . The said NMRCL department is insisting us to charge 12% GST as per the notification number 11/2017-Central Tax (Rate) dated 28th June 2017 as amended by notification no. 01/2018-Central Tax (Rate) dated 25th Jan 2018, treating above work as Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to,- (a) railways, including monorail and metro; Statement containing the applicant s interpretation of law and/or facts, as the case may be, in respect of the aforesaid question(s) (i.e. applicant s view point and submissions on issues on which the advance ruling is sought). As per Section 2(119) of the Central Goods and Services Tax (CGST) Act, 2017, unless the context otherwise requires, the term works contract means a contract for building, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sists of aluminium, bus bar 500V 300A complete 5.2.15 erected in 14 gauge CIRCA sheet box with supporting angles, self locks, gasket and slanting top to be erected on provided foundation as per per specification No. SW-SWR/MFP 7 Each 48487.00 339409.00 3. 5.2.14 Supplying and erecting mini feeder pillar triple pole with 200A FPMCCB as incomer and 2 outgoing circuits with HIRC Fuse base and Cartridge of 100A consists of aluminium, bus bar 500 V 200 A. complete erected in 14 gauge CRCA sheet box with supporting angles, self locks, gasket and slanting top to be erected on provided foundation as per per specification No. SW-SWR/MFP 2 Each 34752.00 69504.00 4. 16.3.4 Providing Cement concrete foundation for pump in with required size and length of foundation bolts and nuts (cost with required size and lengthf foundation bolts and nuts (cost with wooden box is included). 110 Cu.Mtrs 5673.00 624030.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 15764.00 78820.00 12. 9.1.3 Providing earthing with Galvanised cast iron earth plate size 60 x 60 x 0.6 cm with funnel with a wire mesh for watering and brick masonry block C.I. 76 cover complete with all materials, testing recording the results as per specification No. EA-EP 76 Each 5495.70 417673.20 13. 5.9.6 Supplying erecting 11 kV 630A, Indoor type Ring Main unit with 1 or 2 Incoming 2 or 1 Outgoing with HRC fuses complete erected on provided cc foundation/ MS channels/trench, etc, in an approved manner as per specification no SW-HTS/RMU 7 Each 432050.00 3024350.00 14. 8.8.2 Dismantling the existing pole above 6 m height with brackets, clamps, insulators, stay from the cement concrete foundation and making the site clear by refilling the pits with excavated materials and bringing it to the ground level. 60 Each 615.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Providing and spreading stone metal 25mm size for 100 mm depth above the 1000 ground level. 1000 Cu m 66.00 66000.00 22. 16.5.15 Supplying and erecting ISI mark G.I. pipe 100 mm dia C class position with accessories. As per specification No. CWPLB/GP 372 Mtr 1821 677412.00 23. 16.3.6 Providing cement concrete for foundation or for concrete filling in ratio with 20 to 25 mm. stone meta} duly plastered 278 with necessary curing for pole muffing or any 278 Cu.Mtr 4211 1170658.00 24. 9.1.4 Providing pipe type earthing with 40mm. dia. G.I. pipe or 20 mm dia. G.I. Rod complete with all materials as per specification No. EA-EP 34 Each 1536 52224.00 25. 10.1.4 Supplying and Erecting approved make 200kVA3 phase, 50 c/s Oil immersed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31. 10.2.2 Supplying and erecting approved make 11 kV out door type gang operated air break, triple pole switch 400A, capacity with 3 post pin type insulator per phase, mounted in horizontal or vertical position with necessary channels on provided cross arm with adequate length of C class G.I. pipe for operating handle erected on extended square shaft. The operating handle provided with lock and key at suitable height from ground level with necessary clamp. 3 Set 18414 55242.00 32. 8.6.15 Supplying and erecting Distribution class, 11 kV thyrite type lightening arrester, on provided cross arm as per specification No. OH-INS/LA 2 Set 1373 2746.00 33. 10.2.5 Supplying and erecting approved make, 11 kV out door type drop out fuse with insulator complete with fuse holders, fuse barrel with metal fitting, fuse element mounted on M.S. channel with working current of 15 Amps capacity complete erected on provided cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete with caution board barbed wire. D.P. Structure shall be erected in provided c.c. foundation 1 Each 130443 130443.00 37. 8.4.17 Supplying erecting single pole cut point channel set of for 11 kV HTOH. Line. Two channel of size 100 x 50 mm 1.6 m Long having stud angle of size 50 x 50 x 6 mm 1.5 m long with top piece of size 100 x 50 mm 0.45 m. Long with necessary clamps, nut bolts etc. complete as per drawing. 1 Each 6364 6364.00 38. 5.9.1 Supplying and erecting approved make extendable / non- extendable type 11 kV, 630A, load break switch with fuses of required rating, on provided MS channels / trench / foundation in an approved manner as per specification no SW-HTS / LBS 3 Each 154214.00 462642.00 39. 7.3.27 Supplying, erecting terminating PVC armoured cable 34 core 120 sq mm aluminium conductor with continuous 12.97 sq mm (8 SWG) G.I. ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced here once again. Further Order No. 58/1/2002-CX dated 15.01.2002 issued under section 37B of the Central Excise Act clarified various items as immovable property after referring to various judgments of Hon ble Supreme Court. In para 5 of the order, examples of immovable property given are as follows: 5. Keeping the above factors in mind the position is clarified further in respect of specific instances which have been brought to the notice of the Board. (1) Turn key projects like Steel Plants, Cement plants, Power plants etc. involving supply of large number of components, machinery, equipment s, pipes and tubes etc. for their assembly/installation erection/integration/interconnectivity on foundation/ civil structure etc, at site, will not be considered as excisable goods for imposition of central excise duty, the components, however, would be dutiable in the normal course. Here we would like to draw your attention to the fact that our scope of work does not include construction of entire project of Metro stations, railway line, power supply, civil structures etc. but scope include Shifting LT,HT Overhead lines crossing which are obstructing metro rail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 (6) TMI 142 - CEGAT, CHENNAI Thus we are of the opinion that our work does not fall under the term works contract and we agree with the opinion expressed by Dy Commissioner State Tax vide letter dated 30th July 2018 that the said supply falls under composite supply as there are two or more taxable supplies which are naturally bundled and supplied in conjunction with each other and cannot be considered as a contract for building, construction..... of immovable property and the Notification No. 11/2017-Central tax (rate) dated 28th June 2017 is not applicable in our case and the same should be treated composite supply with principle item being supply of HT/LT cable and the rate of the principal supply should be applicable to whole contract. With regards to our advance ruling application we hereby submit challan (4 copies) for payment of balance fees of ₹ 5000 dated 6th August 2018 having CIN ORBC18082700076845 under CGST Act., Also as required by you we here by submit Tender document (4 sets) of works allotted to us by Nagpur Metro Rail Corporation. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract So as to qualify as works contracts work there should be of transfer of property in goods of immovable property is necessary. The Hon ble Supreme Court in the case of Commissioner of Central Excise, Ahmedabad vs. Solid Correct Engineering Works 2010 (252) ELT 481 = 2010 (4) TMI 15 - SUPREME COURT has with reference to case under Central Excise Act discussed the meaning of words immovable property . The Court has observed in paras 18 and 19 Of the judgment as follows: 18. That argument needs to be tested on the touch stone of the provisions referred to above. Section 3(26) of the General Clauses Act includes within the definition of the term immovable property things attached to the earth or permanently fastened to anything attached to the earth. The term attached to the earth has not been defined in the General Clauses Act, 1897. Section 3 of the Transfer of Property Act, however, gives the following meaning to the expression attached to the earth : (a) ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be easily shifted/ moved to other sites by lifting the same with the help of the crain without damaging the same. It is Very clear that material is not installed for beneficial enjoyment of land but it is installed for more beneficial use of that material itself. Section 2(30) defines composite supply as supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, 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 Thus going through the above facts it is crystal clear that above said supply (activity) constitutes composite Supply and not a works contract. Thus in my humble opinion in the above said work that there is no transfer of immovable property involved and thus the above work cannot be considered as contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property but it is nothing but a composite supply which is taxable at the rate s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions made by both, the applicant and the department. The applicant has submitted that they have received order from Nagpur Metro Rail Corporation (a) Joint venture of Govt. of India Govt. of Maharashtra, with 50:50 equity) for Shifting of LT,HT O/H lines crossing and providing LT,HT U/G cables from Hingna Depot CH. 19500 to Ambazari Lake CH 12500 for the Nagpur Metro Rail Project. They have also submitted that the work involves Supply, erection, testing and commissioning including transport, loading, unloading, insurance etc of transformer substation, HT LT Overhead Line Cable through Underground, for the Metro Rail Project. In the tender/ work order, the work schedule separately describes each activity to be carried out to complete the work and also rate for each activity is separately mentioned, by adding amount of each activity total estimated tender cost is derived and they have quoted in percent % above or below of the estimated cost. Thus they had no option to quote the individual prices for each activity and the tender had to be accepted as a whole and they could not accept part activities. They have further stated that NMRCL department is insisting them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e works also includes as under :- 1. Providing Cement concrete foundation for pump in 1:2:4 with required size and length of foundation bolts and nuts (cost with required size and length of foundation bolts and nuts (cost With wooden box is included) 2. Supplying erecting 11 kV 630A, Indoor type Ring Main unit with 1 or 2 Incoming 2 or 1 Outgoing with HRC fuses complete erected on provided cc foundation/MS channels/trench , etc, in an approved manner as per specification no SW-HTS / RMU 3. Supplying and erecting fencing of section having size 2450 mm in height from ground level and 1200 mm width with angle iron frame work erected in C C foundation and painted as per specification NO SS-AS/FSG. 4. Supplying and erecting 50 x 50 x 6 mm. angle iron as corner support 2m long fixed at the middle of the fencing frame and the other side inclined at 30 degree angle, in C.C. foundation of 15 x 15 x 40cm complete duly painted with one coat of red oxide and two coats aluminum paint. 5. Supplying laying (including excavation) 15 cms. dia RCC Hume pipe with coupling collar of standard thickness at required depth up to 90 cms. below road/ ground surface, for enclosing pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectrical cable supply and laying work can be classified as contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. Hence we have no hesitation in holding that the applicant is supplying Works Contract Services. It is also apparent that the nature of the works undertaken by the applicant are not in the nature of Original Works as per detailed discussions in the latter part of the findings. The second question raised by the applicant is whether these contracts can be classified as works contracts as per GST Law and whether notification no. 11/2017-Central Tax (Rate) dated 28th June 2017 as amended by notification no.01/2018-Central Tax (Rate) dated 25th Jan 2018 is applicable to the present case? Since it is clear that the applicant is supplying Works Contract Services, we now reproduce the relevant provisions of Notification no. 11/2017-Central Tax (Rate) dated 28th June 2017 which is applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, supplied to the Government, ....alteration of, (a) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); (b) canal, dam or other irrigation pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) Sewerage treatment or disposal. 6 - (iv) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, ...of- (a) a road, bridge, tunnel, or terminal .; (b) a civil structure .. under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; (c) a civil structure under the Housing for All (Urban) Mission/Pradhnn Mantri Awas Yojana, .; (d) a civil structure or any other original works pertaining to .. under the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (e) a pollution control or effluent treatment plant,............. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding monorail and metro 6 (vi) Services provided to the Central 6 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) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017 6 (vii) Construction services other than (i), (ii), (iii), (iv), (v) and (vi) above. 6 Vide amendment Notfn No. 31/2017, dated 13.10.2017 and 46/2017 dated 11.11.2017, the ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017 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 local authority, as the case may be (vii) Construction services other than (i), (ii), (iii), (iv), (v) and (vi) above. Even with the amendment the applicant s position has not changed. Their composite supply of works contract as in the subject case falls under (ii) attracting 18% GST. The said Notification 11/2017 was also further amended on 25.01.2018 vide Notfn No. 01/2018 - Cen Tax (Rate) and vide this amendment clause (v) as above was changed to incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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