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TMI Blog2019 (7) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... t IPRC , Mahendragiri. Each of these systems (for each fluid) involves various tanks, pressure, and venting, cooling/heating, circulation, collection drain circuit. TPL should erect these fluid systems at the site along with their piping circuits and instrumentations by means of minor civil works done with concrete, brick masonry, grouting, bolts etc. TPL should fabricate and procure the relevant materials, instruments and equipment as defined in the contract. Along with these, TPL should also manage the complete project, plan, review the design, and give detailed engineering drawing for all these systems. They should also ensure inspection, transportation, construction and commissioning of the FSS, though various activities are to be done with assistance of IPRC. TPL supplies Goods and Services as required in the contract. It is to determine if the supply of goods and services by the applicant under contract to ISRO can be considered as a composite supply. Mere supply of the equipment, instruments, pipes and fluid tanks is not enough, the same has to be integrated and erected and finally commissioned at the test - bed facility. The Contract itself shows that the supply of these eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Subsection (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s. Tata Projects Limited , No.9, First Floor, AF Block, 8th Street, 11th Main Road, Anna Nagar, Chennai-600040 (hereinafter called the Applicant or TPL) are engaged in the process, design, detailed engineering, procurement, shop fabrication & inspection, supply, storage, site fabrication, erection, inspection & commissioning of fluid servicing system of Semi Cryo Integrated Engine Test Facility. They are registered under GST with GSTIN 33AAACT4119L1ZF. They have preferred an application seekin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsportation of items to Chennai Seaport/Trivandrum Airport * Supervision during Erection * Supervision of Commissioning. * Supply of Materials: All the materials such as equipments, flow components, instruments, pipes and fittings are to be purchased and supplied by the applicant. * Spare parts and consumables for erection and commissioning: For the materials used in the FSS, the applicant is responsible to provide spare parts and consumables to be replaced /used during erection & commission. * Civil Works: Major Civil Works: Major Civil works are not in their Scope. The following major Civil works will be provided by ISRO- Test-bays with foundation; Pavement and approach roads; Buildings and Sheds; Blast wall & spillage protection walls; Foundation for equipment. Minor Civil Works: The minor civil works are in the scope of the applicant which covers providing Plain cement concrete, Reinforced cement concrete, brick masonry, grouting, anchor bolts. * Erection & Commissioning Includes: * Mounting of Equipments * Structural Works. * Electrical works * Commissioning The composition of the price breakup of contract price is as below: Sl.No. Particulars Payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erection and commissioning for the supplied goods with the specifications of contract.; It is evident from Clause 18.1 and Annexure-7 of the contract agreement and the price break-up given , procurement and supply of materials pertaining to scope including shop fabrication, testing and inspection at manufacturers' site constitutes 86% of the Total contract Value. * Works Contract is also defined as Composite Supply and includes a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, Renovation, alteration or commission of immovable property wherein transfer of property in goods is involved in the execution of such Contract. The intent of the contract executed by them is not in the nature of erection, commissioning. The main intention of Contract is to supply the Whole FSS in totality consisting of various goods and services are incidental to provision of such goods. * ISRO wants functional FSS and services such as erection, commissioning, etc are only a means to provide the main supply of goods and are only incidental. The principal supply will be provision of FSS and not provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt layout and P & IDs is also produced by ISRO. TPLs responsibility is to carry out the detailed engineering and calculating the quantities based on the layouts and P&IDs provided by the client. * TPL's scope of supply include low pressure Run Tank, LN2 storage tank, Bath type heat exchanger, mixer, liquid oxygen tank, liquid nitrogen tank, isosene tank, spiral heat exchanger, atmospheric vaporizer, isosene pumps, vacuum system, chiller system, supply of instruments, EP valves, Control Valves, pressure switch and isolation valve, cable glands. * The major equipment and other free issue material will be erected on the foundations provided by ISRO, with bolts which are grouted on the foundations. These equipments therefore can be removed as such by untightening of bolts and can be used elsewhere. * The structural works to be done by TPL include design, supply of material, fabrication, assembly and erection of all types of structures like pipe supports, templates, spreader beams, structural bridges, structural staircases, access platform at the top of pressure vessels etc., * The minor civil works will be done with plain cement concrete, reinforced cement concrete, brick mason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... works equipment erection commissioning and performance tests which would qualify as composite supply of goods and services and do not qualify as works contract. 3.3 The Applicant was again heard on 22.02.2019 and stated that they are constructing various fuel tanks along with heat exchange pipelines, valves, switches connecting to the test bed of the Cryogenic Engine. The test bed is built by ISRO. The Civil work involved is minor civil work of RCC foundation for pipeline. The applicant has to do commissioning of tanks and fluid pipelines and testing in standalone for the structure and not for the whole system They stated that it is a composite supply where Principal Supply is supply of goods which is Scientific/ equipments and hence it is eligible under Notification No.45/2017 Central tax (Rate) Sl.No. 1. 4. The State authority appeared in Person and submitted a written submission along with a copy of advance Ruling by A.P. The State Tax Authority regarding the question raised by the applicant has furnished the following Comments: * In the instant case, the supply of Engineering, Procurement & Construction (EPC) contract involves carryout of services related to installation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rate) dated 14th November 2017, may apply in the instant case for the applicant subject to condition that such institution produces a certificate to supplier at the time of supply of the specified goods. * At the same time, intention of the notification 45/2017 CT (Rate) specifically mentioned that exemption is only to supply of scientific and technical instruments, apparatus, equipment etc. and the same is not applicable for the supply other than that. In the present contract, the supply of the applicant extends to other than scientific and technical instruments, apparatus, equipment i.e. namely supply of tools, tackles and other materials clean up of work site, first aid services, electrical safety regulation services etc., Specifically the supply of tools and other materials involves the supply of expendable devices like anchor, grinding and abrasive wheels, plugs, hacksaw blades, taps, dies, drills, reamers, chisels, files, carborundum stones, oil stones, wire brushes, necessary scaffolding, ladders, wood planks, timbers sleepers etc. and consumable material like oxygen, acetylene, argon, lubrication oils, greases, cleaning fluids, cylinder oil, graphite powder and so on. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical, Insulation - Design, procurement, o Chemical consumables- Procurement * Inspection & Transportation - Third party inspection and inland & offshore transportation of all material supply * Construction - Planning, supervision, installation work, piping, civil, structural, building electrical installation, insulation works of equipment, machinery & instruments * Pre-commissioning & Commissioning- Planning, cleaning of equipment/ piping, purge and drying- out of Cryogenic equipment/ piping, conducting mechanical running, functional sequence test, commissioning & performance test, equipment required for this * The Semi-cryogenic Integrated Engine will be tested in a bay of 20 m X 20m X 31m (provided by IPRC) inside which the Isrosene , liquid oxygen, Liquid Nitrogen system, Gaseous Nitrogen System, Gaseous Helium System are mounted. Several of the piping circuits, vacuum pumps provided by TPL will be kept in the vacuum pump room and centrifugal pumps in the isrosene pump room. Water Systems are to be mounted in the chilling water pump room. * The payment schedule indicates timelines of completing process design review, detailed engineering, and supply of items pro-rata, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase at hand, TPL supplies Non Cryogenic Tanks, Heat exchanger and Pumps for cooling ISROSENE, Ejector System, LN2 Bath Type Heat Exchanger For Cooling GN2 and GHe, Vaporizers, Chilling Water Plant, Steel Pipes, Pipe Fittings including Flanges, Super-insulated Pipelines, Flexible Hoses, Electro-Pneumatic Valves, Control Valves, Non-return Valves, Safety Relief valves, Rupture Disc Devices, Filters, Pressure Regulators, Pressure Gauges. All the above materials are to be designed, engineered, tested and then erected at the site. Erection or Construction involves planning, installation of the civil, structural, electrical, insulation, piping circuits, equipment, instruments and the fluid systems using grouting, masonry, concrete work for installing the same at test bed facility often semi-cryogenic engine. Mere supply of the equipment, instruments, pipes and fluid tanks is not enough, the same has to be integrated and erected and finally commissioned at the test - bed facility. The Contract itself shows that the supply of these equipment and instruments are necessarily to be given with a host of services such as designing, engineering, inspection, construction, commissioning. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uliar circumstances that the installation and erection of machines at site were held to be by this Court, to be immovable property that ceased to remain moveable or marketable as they were at the time of their purchase. Once such a machine is fixed, embedded or assimilated in a permanent structure, the movable character of the machine becomes extinct. The same cannot thereafter be treated as moveable so as to be dutiable under the Excise Act. But cases in which there is no assimilation of the machine with the structure permanently, would stand on a different footing. In the instant case all that has been said by the assessee is that the machine is fixed by nuts and bolts to a foundation not because the intention was to permanently attach it to the earth but because a foundation was necessary to provide a wobble free operation to the machine. An attachment of this kind without the necessary intent of making the same permanent cannot, in our opinion, constitute permanent fixing, embedding or attachment in the sense that would make the machine a part and parcel of the earth permanently………." Applying the above to the case at hand, the erection of the System at sit ..... 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