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TMI Blog2019 (4) TMI 1446X X X X Extracts X X X X X X X X Extracts X X X X ..... n itself is a composite supply in which construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning etc are involved along with transfer or property in goods. The activity of O M of Fluoride Control Project on ESCO Model and O M work by the applicant is being undertaken for a Government Department. In this activity of Composite supply of goods and services if supply of goods is below 25% out of total value of supply then GST will be NIL and if more than 25% of the total value of supply then GST will be @12%. - ADVANCE RULING NO.RAJ/AAR/2018-19/41 - - - Dated:- 25-3-2019 - J.P. Meena Additional Commissioner Member (Central Tax) And Hemant Jain Joint Commissioner Member (State Tax) Present for the applicant: Ms Shuchi Sethi (Authorized Representative) ORDER Note: Under Section 100 of the CGST/RGST Act 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act 2017, within a period of 30 days from the date of service of this orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, since composite supply of works contract has been specifically classified as supply of service under Schedule II, it should be first analysed whether the contract can be classified as a works contract or not. e. The scope of work involves Pump House/ Replacement/ refurbishment/ repair/ rehabilitation of existing pump sets, switchgears, mechanical and electrical equipment, capacitor banks etc. Repair/ remodel of pump foundation according to new pump sets or as per requirement. Extension of pump house if required to remodel the configuration of pump sets or as per site condition. The supply and installation of new pumping machinery and other equipments shall be done as per best engineering practice. f. The operation and maintenance work shall be carried out of all the electrical and mechanical instruments, pumping machinery etc. g. The pumping station and its surrounding shall be kept clean and in dry condition, properly ventilated and illuminated. For the purpose of illumination, replacement of fitting/ fixtures shall be done by the contractor, if required. h. The applicant shall be responsible for painting, color ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rized as, the applicant is in the process of bidding for tender floated by P.H.E.D. for which they will provide comprehensive water services for operation and maintenance of Fluoride Control Project on ESCO and O M ( Text missing ) 5. FINDINGS, ANALYSIS CONCLUSION: a. The scope of work in ESCO model requires improvement of the whole water supply system involving pump houses, pumping stations, transmission lines, switchyards, storage tanks and headwork campus. Re-modelling of pump foundation and extension of pump house, replacement of fittings/fixtures and painting of all permanent structures like pumping station building etc. are involved in the contract. b. The given activities undertaken by the applicant are culminating into works contract services. Now works contract service in itself is a composite supply. The same has been defined under Schedule-II under Entry 6 which is read under: 6. Composite supply The following composite supplies shall be treated as a supply of services, namely: (a) works contract as defined in clause (119) of section 2; and (b) supply, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... station building, thrice during the entire contract period. Transmission Pipelines The contractor shall be responsible for Patrolling, operation and maintenance of the pipelines, repairing of leakages of pipelines, replacement of burst pipes, repairing of appurtenances of pipelines like air valves, scour valves air vessels system, intermediate OHSR (for vacuum filling system), pressure gauges, joints etc. Switchyards He shall be responsible for replacement of transformers if required according to year 2027 designed capacity of pump sets. He shall also be responsible for painting, color/ white washing, distempering etc. to the switchyard stuff thrice during the entire contract period. Storage Tanks (CWR) He shall also be responsible for painting, color/white washing, distempering etc. to the CWR, compound wall, store etc thrice during the entire contract period. Headworks Campus Contractor shall maintain whole campus neat and clean by removing unwanted trees, bushes, vegetation etc, pruning of trees watering to sapling and maintenance of lawn/ garden, plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmovable property. Any attachment with earth which is temporary in nature or can be shifted from part of earth to another without causing substantial damage to it cannot be treated as immovable property. o. On the given issue, CBEC has also clarified in its circular number 58/1/2002-CX dated 15/1/2002 where in para (e) it was clarified that;- If items assembled or erected at site and attached by foundation to earth cannot be dismantled without substantial damage to its components and thus cannot be reassembled, then the items involved not be considered as moveable and will, therefore, not be excisable goods. p. According to definition of works contract under GST regime, the supply of goods and services are done by the supplier simultaneously which is for immovable property. Hence in works contract supply of goods and services together is compulsory. Thus, based on above facts and concept such contract shall be a single supply and cannot be treated as distinct supplies. Since all the conditions of composite supply are satisfied, it is a composite supply. q. Now, under Notification No 12/2017-CT (Rate) dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and aesthetic aspects. 14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums. 15. Cattle ponds; prevention of cruelty to animals. 16. Vital statistics including registration of births and deaths. 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. 18. Regulation of slaughter houses and tanneries. On perusal of said Schedule it is evident that under point number 5, the water supply for domestic, industrial and commercial purposes is responsibility of Municipality. It is pertinent to note that given activity of ESCO plant redevelopment is in relation to clean drinking water facility to the citizens. Thus, it is easily ascertained that the applicant is engaged in a Work Contract (Composite supply) to a Governmental Authority. s. If it is held that the rate of tax in given service shall be determined in accordance with the Notification No 11/2017-CT (Rate) dated 28.06.2017, as amended from time to time. On perusal of said Notification under S. No. 3(iii), for schedule of rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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