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TMI Blog2022 (2) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing four separate contracts: Contract 1: Supply of plant and equipment from abroad Contract 2: Supply of domestically manufactured plant and equipment. Under the contract there are two categories of supplies - a) Supply of goods manufactured by the Claimant (hereinafter referred to as 'Contract 2 -Direct Transactions') b) Supply of goods directly from sub-contractor's premises (hereinafter referred to as 'Contract 2 - Bought Out Items') Contract 3: Supply of services including inland transportation, inland transit insurance, installation, testing & commissioning, guarantee test and other incidental services(hereinafter referred to as 'Contract 3 - Transportation, Installation and Testing Services' or 'Contract 3') Contract 4: Supply of civil & structural works and all other related installation services(hereinafter referred to as 'Contract 4 - Civil Works' or 'Contract 4') (2) The above-mentioned contracts were awarded to the applicant in response to a single tender notification, and the general terms and conditions are commonly applicable to all the four contracts. (3) Contract - 3 was awarded to the applicant vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the GST law. Guidance in this regard can be taken from the meaning prescribed to the term in the erstwhile Service tax regime. As per Explanation to rule 4B of the Service Tax Rules, 1994 "For the purposes of this rule and the second proviso to rule 4A, "consignment note" means a document, issued by a goods transport agency against the receipt of goods for the purpose of transport of goods by road in a goods carriage, which is serially numbered, and contains the name of the consignor and consignee, registration number of the goods carriage in which the goods are transported, details of the goods transported, details of the place of origin and destination, person liable for paying service tax whether consignor, consignee or the goods transport agency." (8.5) on the basis of above, it is submitted that the term GTA includes in its ambit only those service providers who provide services of transport of goods by road, and who issue a document against the receipt of goods for the purpose of transport of goods by road (i.e. a consignment note). (8.6) there have been various judicial precedents wherein it has been held that a consignment note means a document which transfers the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons may engage in the activities of a goods carrier. Under the said act, issuance of a document specifying the liability of the person transporting the goods (or of the person having the physical possession of the goods) with respect to the goods being transported by such transporting person is sine qua-non for such person to be considered as a goods carrier (8.8) It is submitted that such provisions of 'Carriage by Road Act' are similar in nature and in requirement to the provisions of the GST law and the erstwhile Service tax law. Thus, the term "goods carrier" can be treated as analogous to the term "GTA" and "goods receipt" to "consignment note". On the basis of this, it is submitted that if a person does not issue a document such as a goods receipt or a consignment note to declare his liability with respect to the goods being transported then he would not qualify as a goods carrier or a GTA. (8.9) the applicant hires third-party transporters for the purpose of transportation of goods. Such transporter undertakes physical possession of the goods for safety point of view during transportation and he is responsible for transportation of the goods till delivery at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the `CGST Act'. 8. We have gone through the Form GST ARA-01 filed by the applicant and observed that the applicant has ticked following issues on which advance ruling required- (v) Determination of the liability to pay tax on any goods or services or both At the outset, we find that the issue raised in the application is squarely covered under Section 97(2) of the CGST Act 2017. We therefore, admit the application for consideration on merits. 9. We have gone through the submissions made by the applicant and have examined the same. We observe that the applicant has sought advance ruling on the following questions- `Whether tax would be applicable on the service of transportation of goods by road to be provided by the company under one of its contracts? ' 10. We find that the applicant had been awarded the erection, procurement and commissioning (EPC) pac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of supply of goods and services under erection, procurement and commissioning (EPC) package for 1x660 MW Harduaganj TPS Extn-II thermal power station by M/s UPRVUNL. As such, the applicant is isolating transportation services not only from other services (i.e. installation services and training charges) envisaged under third contract but also isolating it from whole contract of supply of goods and services allotted to the applicant. Hence most important issue to be examined by us is to verify whether the transportation services and other services provided by the appellant are altogether separate contract independent of any obligation cast on the applicant under the whole contract or not. 14. We find that the Contract - 3 was awarded to the applicant vide Notification of Award (NOA) No. 2205/PPMM/SE-II/Harduaganj Extn.-II dated 08 September 2015 as part of the EPC package-for the Harduaganj power plant project. Corrigendum to the said NOA was issued by the M/s UPRVUNL vide letter No. 2379/PPMM/SE-II/Harduaganj Extn. II dated 30.11.2015 vide which the contract was spilted and separate civil contract was made as 'fourth contract'. The Para C and D of the Corrigendum date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ird Contract'. It is also expressly understood and agreed by you that the equipments/materials to be supplied by you under the 'First Contract and 'Second Contract' and civil and structural works under 'Fourth Contract', when installed and commissioned under this 'Third Contract' shall give satisfactory performance in accordance with the provisions of the contract. D. The total contract price for the entire scope of work under this Contract shall be INR 3,729,877,295.00 (inclusive of all taxes and duties) as per the following breakup: SL.No. Particulars Price in INR (inclusive of all taxes and duties) 1 Local Transportation including Port Handling, Port Clearance and Port Charges, Inland Transit Insurance charge and other local costs incidental to delivery of Plant and Equipments covered under First Contract and Second Contract' 461,948,371.00 2 Local Transportation including Port Handling, Port Clearance and Port Charges, Inland Transit Insurance charge and other local csts incidental to delivery of Mandatory Spares covered under First Contract and Second Contract' 39,822,412.00 3 Installation services (Erection & Allied works) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated services of insurance, unloading and handling at site, installation including civil work, testing etc. are not separate contracts, but only form parts of an indivisible composite supply of goods and services with single source responsibility. Thus, from the above it is seen that the supply of the goods and the supply of services are inextricably linked with each other. The contract awarded in substance and essence is a composite contract as defined in section 2(30) of the C.G.S.T. Act, 2017 for supply of goods and services. 18. The term 'composite supply' is defined under clause 30 of Section 2 of the CGST Act, 2017 as under- "composite supply" means a 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; Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply; 19. The Contracts involve two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property. In order to decide whether the transaction is a works contract, it is for us to decide whether it is in respect of immovable property. The term 'immovable property' has not been defined under the GST Act. As per Section 3 (26) of the General Clauses Act, 1897, immovable property includes "land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth". From the said definition, it is clear that anything which become the integral part (i.e., coming within the civil structure) of anything attached to the earth is termed as immovable property. 22.1 We find that Contract 4 (bearing Ref. No. PPMM/SE-II/2015-16/04 dated 22.03.2016) is for the work of providing Civil and Structural works and all other installation services related to Civil and structural works leading to successful "completion of facilities" of the EPC Package for Harduaganj Thermal Power Station Extension-II. The contract price of the said contract is as under- SL.No. Particulars Price in INR (inclusive of all taxes and duties) 1 Installation services (Civil and Structural works) including Insurance (other than transit insurance and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubt that they were set up permanently in the land in question with a view to operate a fertilizer plant and the same was not embedded to dismantle and remove the same for the purpose of sale as machinery at any point of time. The facts as could be found also show that the purpose for which these machines were embedded was to use the plant as a factory for the manufacture of fertilizer at various stages of its production. Hence, the contention that these machines should be treated as movables cannot be accepted." 23.2 Thus, what can be seen from the above is that when machines are embedded with no visible intention to dismantle them and they are intended to be used for a fairly long period of time, they are 'immoveable property'. 24. Hence, in our view the total project assigned to the applicant is nothing but composite supply of works contract as envisaged under Section 2 (119) of CGST Act, 2017 and the entire contract is a supply of services as per entry 6(a) of schedule II of the GST Act and liable to GST @ 18% as per entry at Sr. no. 3(ii) of the Notification No. 11/2017 of Central Tax (Rate) dt. 28/06/2017 and corresponding notification under the UPGST Act 25. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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