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TMI Blog2020 (8) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... estimated project cost as approved by the competent authority of N.T.R.O. is Rs. 122.30 Crores. The applicant has commenced the work as per the M.O.U. and the work is undertaken by the applicant by engaging various independent contractors. The applicant is entitled to get 7% of the actual expenditure for the-project as Engineering and Supervision charge which is also termed as project management service charges. The approved estimated cost also includes the 7% project management service charges of the applicant. The procedure presently followed by the applicant is that the contractors engaged by the applicant raise invoice on the applicant and the applicant in turn raise invoice on N.T.R.O. for the a M.O.U. including the project management service charges. The applicant is charging GST at the rate of 18% in the said invoices. In addition to the above the applicant is raising monthly invoices to N.T.R.O. claiming licence fees for the office building allotted to N.T.R.O. on license basis and also charges for electricity and water supplied to N.T.R.O.. They are charging 18% GST on the license fees and no GST is charged on the electricity and water charges as they are exempted from GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the N.T.R.O. Ship, which includes various facilities like Main Berth, approach bridge, gate office building, fire pump station, substation, development of land, construction of reclamation wall and approach road, firefighting facilities, electrical facilities, telephone / network facilities, Jetty Crane (a standard rail M.O.U. nted electric level luffing crane of 15/10 ton capacity with 20m reach), CCTV System, Parking, site office, building with furnished rooms, air conditioning, solar panels, security post, port container etc. b) Development of 1.8 acre land including providing allied facilities which amongst other things, comprises of land development including electric connection and Transformer with outlet, water connection, water tanks, pump house, security towers, compound wall and gate, internal roads, pavement and drainage facilities, porta container with air-conditioning etc. c) Development of 4.0 acre land including providing allied activities which includes land development, compound wall and gate, security tower, electric connection, water tanks and pump house etc. 5. The matter was examined meticulously. As per the M.O.U. dated 22.12.2016 the applicant has to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the use of their employees or other persons specified in paragraph 3 of the Schedule Ill of the Central Goods and Services Tax Act, 2017. Explanation.- For the purposes of this item, the term "business" shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities." (ix) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity. 9. The rate of GST applicable under both the above entries is 12% IGST [6% CGST and 6% SGST] 10. The activity undertaken by the applicant as per the M.O.U. is for the National Technical Research Organisation, a Technical Intelligence Agency of the Government of India. Since the services rendered by the applicant falls under the definition of "Works Contract" as per Section 2 (119) of the CGST Act, 2017 and the services being rendered to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies are also the same rate as applicable to the main supply as the activities cannot be segregated or vivisected from the main supply for a differential tax treatment. 16. In view of the observations as stated above, the following rulings are issued: 1. Whether, having regard to the background and details including the scope of work of the Deposit work contained in the M.O.U. entered into between CoPT and N.T.R.O., what is the nature of the services rendered by CoPT under the M.O.U. entered Into between CoPT and N.T.R.O.? Whether it would be treated as a "Works Contract" as per section 2 (119) of the CGST Act or as a Composite Supply for services as per Section 2 (30) of the CGST Act or as a mixed supply as defined in Section 2 (74) of the CGST Act? The activity undertaken by the applicant as per the M.O.U. dated 22.12.2016 entered with National Technical Research Organisation of the Government of India are covered under "Works Contract" as defined in Section 2 (119) of the CGST Act, 2017. 2. Whether, having regard to the background and details Including the scope of work of the Deposit work contained in the M.O.U. entered into between CoPT and N.T.R.O., whether CoPT is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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