9911796707
TMI Blog2021 (2) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be classified as solar power device, resultantly would not be covered under the entry 234 of Schedule I of the notification No. 1/2017 entry no. 38 of Notification No. 11/2017 -Central Tax (Rate) dated 28.06.2017. The activity proposed to be undertaken is a composite supply of works contract, 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. As per tender document the setting up the irrigation project including Construction of Intake well, Pump House, Panel Room and Supply, Erecting/Laying, Testing Commissioning Submerge V.T. Pumps, Rising Mains, Distribution network of Pipe Line at Chaks, O M for Eight years including installation of Solar Power unit of 5x100 KW capacity, EPC contract on turnkey basis by the applicant is a Works Contract of Composite Supply. This composite supply is a mixed of goods and services. Since this supply is undertaken for a Water Resources Department, a unit of Government of Rajasthan, hence shall attract GST @12% (6% CGST and 6% SGST) under S. No. 3 (Heading 9954) (iii) of Notification No. 11/2017, dated 28.06.2017. - RAJ/AAR/2020- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest) process for pressurized Irrigation (Sprinkler System) including Construction of Intake well, Pump House, Panel Room and Supply, Erecting/Laying, Testing Commissioning Submerge V.T. Pumps, Rising Mains, Distribution network of Pipe Line at Chaks, O M for Eight years including installation of Solar Power unit of 5x100 KW capacity, EPC contract on turnkey basis. (There are three volumes of the tender document and copies of all three volumes of the Tender document issued by Water Resources Department are enclosed and marked as Annexure-3, 4 and 5 respectively.) 4. That the tender document is clear on the levy of taxes/duties that the Contractor shall be responsible for payment of all Taxes/Duties/Levies etc. The contractor's prices are deemed to be inclusive of all such all taxes/duties/levies etc. Hence, it is important for the applicant to understand their liability of GST in relation to the said activity. 5. That the Solar power unit to be constructed in the EPC contract is required for power supply for running the pressurized Irrigation Sprinkler system and it is mandatorily required to have a sufficient capacity to run the complete irrigation system. 6. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is reproduced as under: S.No. Chapter Description 234. 84, 85 or 94 Following renewable energy devices parts for their manufacture: a) Bio-gas plant b) Solar power based devices c) Solar power generating system d) Wind mills, Wind Operated Electricity Generator (WOEG) e) Waste to energy plants/devices f) Solar lantern/solar lamp g) Ocean waves/tidal waves energy devices/plants h) Photo voltaic cells, whether or not assembled in modules or made up into panels Explanation : If the goods specified in this entry are supplied, by a supplier, along with supplies of other goods and services, one of which being a taxable service specified in the entry at S. No. 38 of the Table mentioned in the notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTION TO PROJECT is given in Volume-I (TECHNICAL BID) of Tender Document from where extract of Introduction to Project is reproduced as under: Introduction and History Ambapura Lift Irrigation Project is proposed in Mahi dam submergence area near village Padla of Banswara District. The water lift from Mahi dam reservoir for irrigation purpose in the command area by sprinkle system. 3. That according to the scope of works under the contract, the applicant has to develop a pressurized irrigation sprinkler system on turnkey basis to be operated on Solar power which includes the following activities to be carried out: Survey and Investigation Land acquisition (Private and Forest) Designing and Detailed planning Construction of Intake well, Pump House and Panel room Erecting/Laying, Testing, Commissioning of Submerge V.T. Pumps, Rising Mains, Distribution network of Pipe Line Installation of Solar Power unit of 5x100 KW capacity O M for Eight years 4. A detailed scope of work is given in Tender Document VOLUME-I (TECHNICAL BID) wherein parameters for every activity covered in the contract have been iterated. In Para 1.5 of Scope of W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be recognized. 8. As per the understanding of the applicant, the HSN Code of the irrigation sprinkler system should be 8424 falling under the below highlighted entry of Chapter 84 as specified in the First Schedule to the Customs Tariff Act, 1975 which has to be referred as Tariff Item for GST Tariff Schedule as per Explanation provided therein: Tariff Item Description of Goods 8424 MECHANICAL APPLIANCES (WHETHER OR NOT HAND OPERATED) FOR PROJECTING, DISPERSING OR SPRAYING LIQUIDS OR POWDERS; FIRE EXTINGUISHERS, WHETHER OR NOT CHARGED; SPRAY GUNS AND SIMILAR APPLIANCES; STEAM OR SAND BLASTING MACHINES AND SIMILAR JET PROJECTING MACHINES - Agricultural or horticultural sprayers: 8424 41 00 -- Portable sprayers 8424 49 00 -- Other 9. Thus, all the materials to be supplied by the applicant like Submerge V.T. Pumps, Rising Mains or material for Distribution network of Pipe Line are the goods to be supplied by the applicant which are parts for manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 11/2017-CT (Rate) where the relevant entry for construction services in relation to solar power based devices is notified being taxable at the rate of 18% and the relevant extract of the said entry is as under: (1) (2) (3) (4) (5) 38 9954 or 9983 or 9987 Service by way of construction or engineering or installation or other technical services, provided in relation of setting up of following, (b) Solar power based devices (c) Solar power generating system 9 - Explanation : - This entry shall be read in conjunction with serial number 234 of Schedule I of the notification No. 1/2017- Central Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated 28th June, 2017 vide GSR number 673(E) dated 28th June, 2017. 14. The services of construction and installation to be provided by the applicant in respect of setting up of lift irrigation sprinkler system based on solar power are clearly classifiable under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to undertake an EPC on turnkey basis in respect of a tender floated by water resource department, a unit of Govt, of Raj. For pressurized irrigation (Sprinkler System) including Construction of Intake well, pump house, panel room and supply, erecting/laying, testing commissioning submerge V.T. Pumps, rising mains, distribution network of pipeline at Chaks, O and M for eight years including installation of solar power unit of 5*100 KW capacity, EPC contract on turnkey basis, as mentioned by the applicant in their form GST ARA-01 dated 13.05.2020. 2. The applicant has sought advance ruling on classification of any Goods or Services or both through their GST ARA-01 dated 13.05.2020. The GST rate on goods have been notified by the Govt, in notification no. 01/2017-Central Tax(Rate) dated 28.06.2017 which has been amended by various Notifications, wherein it has been described as follows: - Sl.No. Chapter Description 234 84, 85 or 94 Following renewable energy devices and part for their manufacture:- a) Bio gas plant b) Solar power based devices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, the project of instant case falls under Notification No. 11/2017 dated 28.06.2017 which specifies the levy of rate of duty on goods as well as services. This notification is totally applicable for the goods/services covered under chapter-84, 85 or 94 there is no ambiguity on the levy of taxes. Therefore, this application is not fit for consideration under the advance ruling. It is also submitted that Turnkey project are always changeable during project period so this office cannot comment on the applicability of rate of levy of taxes, of the project contract as submitted by the party. E. FINDINGS, ANALYSIS CONCLUSION: 1. We have considered the submissions in their application and also during personal hearing made by the applicant. We have also gone through the tender document issued by Water Resources Department of Government of Rajasthan for awarding EPC contract for pressurized Irrigation (Sprinkler System) including Construction of Intake well, Pump House, Panel Room and Supply, Erecting/Laying, Testing Commissioning Submerge V. T. Pumps, Rising Mains, Distribution network of Pipe Line at Chaks, O M for Eight years including installation of Solar Power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided in relation of setting up of following, - (a) Bio-gas plant (b) Solar power based devices (c) Solar power generating system (d) Wind mills, Wind Operated Electricity Generator (WOEG) (e) Waste to energy plants / devices (f) Ocean waves/tidal waves energy devices/plants Explanation :- This entry shall be read in conjunction with serial number 234 of Schedule I of the notification No. 1/2017- Central Tax (Rate), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated 28th June, 201 7 vide GSR number 673(E) dated 28th June, 2017. 3. Now the question arises whether the supply to be made by the appellant would be covered under the term Solar power devices or otherwise. Solar power device has not been defined under GST law. A device means an object, the Oxford dictionary defines 'device' as 'an object or a piece of equipment that has been designed to do a particular job: Further, Solar power device means: - Device which uses solar energy directly as heat or convert it into electricity, i.e. solar cooker, solar lamp, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntake wells, Pump House, Panel Room and Supply, Erecting/Laying, Testing Commissioning Submerge V. T. Pumps, Rising Mains, Distribution network of Pipe Line at Chaks. O M for eight year including installation of Solar power unit of 5*100 KV EPC contract on turnkey basis. Thus, the tender is primarily for setting up of the sprinkler system based irrigation Project as a whole, various goods and services are involved in setting of the project. The contractor has to start from the scratch and bring into existence a fully operational irrigation project. The execution of the project would also involve the transfer of property in goods. 5. In light of these fact, we examine the definition of work contract as provided under Section 2(119) of the CGST Act 2017 which reads as under: - (119) works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract; The tender is for the engine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement, modification, repair, maintenance, renovation, alteration or commissioning etc. are involved along with transfer or property in goods. b. Under GST, as per definition of works contract service if construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning is for immovable property, only then it will be classified as works contract. 11. Further, we observe that the activity proposed to be undertaken is a composite supply of works contract, 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. The relevant portion of the S. No. 3(Heading 9954) (iii) of the Notification No 11/2017-CT (Rate) dated 28.06.2017 (as amended) is as under: - Heading 9954 (Construction services) CGST Rate % SGST Rate % IGST Rate % Remarks (iii) Composite supply of works contract as defined in clause (119) of section 2 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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