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TMI BlogWorks Contract Services pertaining to Machinery for Processing of Agricultural ProduceX X X X Extracts X X X X X X X X Extracts X X X X ..... Works Contract Services pertaining to Machinery for Processing of Agricultural Produce X X X X Extracts X X X X X X X X Extracts X X X X ..... s divided into two parts viz * Civil work comprises of civil construction of Dairy plant building, service block, processing, administrative block, workers amenities, godown, time keeping office, boundary wall, roads, water tank, E.T.P. (only civil work) water supply/sanitary & plumbing, hard park, internal/external electrification and all complete works as per the drawing and specification on turn-key basis * Electro-mechanical work comprises of design, supply, installation and commissioning of equipments including dairy plant, utility/services, lab equipments, ETP (electromechanical works) etc. on turn-key basis. This part includes Supply Part as well as Installation Part * Applicant contention that above work would fall under the E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry No. (v)(f) of Sr. No. 3 of the table under Notification No. 11/2017-Central Tax (Rate) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 [other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above], supplied by way of construction, erection, commissioning, or installation of original works pertaining to mechanized food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages. * Accordingly benefit of lower rate of GST 12% (6%+6%) shall be available to the works contracts pertaining to the dairy industry in their case AAR Finding: Pouch Filling Machine has to pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s following tests to be eligible for inclusion under Entry No. (v)(f) of Sr. No. 3 of the table under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate):- (a) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017; (b) Supply by way of construction, erection, commissioning, or installation of original works; and (c) Supply pertaining to mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages'. Pouch Filling Machine with online pouch coding machine of Make-Domino, is not an immovable property and hence supply of the same cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be termed as supply of 'works contract'. Milk on which processes have been carried out by other than a cultivator or a producer shall not fall under Agricultural Produce. The milk when brought to process by the said Pouch Filling Machine would have already gone under various processes of filtration, straining, chilling, pasteurizing, cream processing, standardising curding etc and the essential characteristics of milk would have been already altered. Therefore the said machinery cannot be said to be used for processing agricultural produce. AAR Conclusions: First Part- Civil work nowhere involves any supply of machinery or equipment. In absence of the same it will not fall under Entry No. (v)(f) of Sr. No. 3 of the table under Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate). Second Part- Supply of Pouch Filling Machine with online pouch coding machine of Make-Domino, as well as other supplies of civil work and electro-mechanical work will NOT fall under Entry No. (v)(f) of Sr. No. 3 of the table under Notification No. 11/2017-Central Tax (Rate) as amended by Notification No. 20/2017-Central Tax (Rate). Our Comments: In our opinion AAR has erred in interpreting the Entry 3(v)(f) of the Principal Notification No- 11/2017 dated 28.06.2017 in the Notification read as follows: Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 [other than that cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by items (i), (ia), (ib), (ic), (id), (ie) and (if) above], supplied by way of construction, erection, commissioning, or installation of original works pertaining to mechanized food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages Significance of word "Pertaining to". There was no discussions on the term "Pertaining to". The term pertaining to is very wide and covers within its ambit not only the activity specified but all the other activity in relation to main activity. Doypack Systems Pvt Ltd vs Union of India [1988 (2) TMI 61 - SUPREME COURT] The words "pertaining to" and "in relation to" have the same wide meaning. The word "pertain" is synonymous w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the word "relate", see Corpus Juris Secundum, Volume 17, page 693- Para 47. The expression "in relation to" (so also "pertaining to"), is a very broad expression, which pre-supposes another subject matter. These are words of comprehensiveness which might both have a direct significance as well as an indirect significance depending on the context. "Relating to" has been held to be equivalent to or synonymous with as to "concerning with" and "pertaining to". The expression "pertaining to" is an expression of expansion and not of contraction. In an appeal filed before Appellate AAR in case of IN RE: M/S. SHREE CONSTRUCTION [2019 (3) TMI 1567 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA]- Benefit of Concessional Rate was exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to Sub-Contractor as the work was in relation to Railway. Merely the work was provided to Main contractor benefit of the reduced rate cannot be denied if such was work was pertaining to Railways Harmonious Reading of the Provisions In V.L.S.Finance Ltd., v. Union of India, reported in 2013 (5) TMI 348 - SUPREME COURT at Paragraph 18, the Hon'ble Supreme Court, held as follows: "As is well settled, while interpreting the provisions of a statute, the court avoids rejection or addition of words and resort to that only in exceptional circumstances to achieve the purpose of Act or give purposeful meaning. BUILDERS ASSOCIATION OF NAVI MUMBAI, NEELSIDHI REALTIES VERSUS UNION OF INDIA THROUGH THE SECRETARY, MINISTRY OF FINANCE, THE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... COMMISSIONER OF GOODS AND SERVICE TAX, THANE & OTHERS [2018 (4) TMI 461 - BOMBAY HIGH COURT]- Provisions in a taxing statute would have to be read together and harmoniously in order to understand the nature of the levy, the object and purpose of its imposition. No activity of the nature mentioned in the inclusive provision can thus be left out of the net of the tax.
In our view the Works Contract Services was pertaining to machinery of agricultural produce would fall within the entry no- 3(v)(f) of the Principal Notification No- 11/2017 dated 28.06.2017.
Above Analysis is based purely on Personal Understanding of the Author which may differ from person to person. X X X X Extracts X X X X X X X X Extracts X X X X ..... als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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