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TMI Blog2023 (1) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... produced before GAAR, there are no error found in the findings given by GAAR that there was only one recipient of supply which was M/s AGEL. The Technical Specification issued by M/s. AGEL contains details relating to both supply of goods viz. Aluminium Winding Inverter Duty Transformers and supply of services viz. Supervision of Erection, Testing Commissioning of Aluminium Foil Type Winding Inverter Duty Transformers. The signature of the 'Authorized Signatory' appearing on the Purchase Order and Service Order appears to be the same for both M/s AGEL and M/s Adani Solar Energy Chitrakoot One Ltd. The supply in question is a one involving both supply of goods and associated services and are to be supplied by the appellant. From the above discussion, it is found that the supply of goods and the supply of services are single and connected and to be used for the same purpose viz. for supply and effective functioning of the IDT and trouble free operation of Solar Power Plant. The appellant has been harping on the fact that they had received two separate purchase orders from two distinct entity. It is seen that the purchase order PO No. 4500315135 for the supply of Alum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NJAN, MEMBER Present for the appellant : Shri Dhruvank Parikh, CA At the outset we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 (hereinafter referred to as the 'CGST Act, 2017' and the 'GGST Act, 2017') are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act, 2017 would also mean reference to the corresponding similar provisions in the GGST Act, 2017. 2. The present appeal has been filed under Section 100 of the CGST Act. 2017 and the GGST Act, 2017 by M/s Shilchar Technologies Limited (hereinafter referred to as Appellant) against the Advance Ruling No. GUJ/GAAR/R/07/2021 dated 20.01.2021. 3. Brief facts of the case: 3.1 M/s Shilchar Technologies Limited, Bil Road, Bil, Vadodara- 391410 (hereinafter referred to as 'the appellant'), holding GSTIN: 24AADCS3108B1Z2, are manufactures of Electronics and Telecom and Power Distribution Transformers. 3.2 The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be liable to GST @ 2.5% CGST and 2.5% SGST only in terms of Sr. No 234 referred above. 3.4 In view of the above, the advance ruling was sought by the appellant as under:- Whether supply of Aluminium Foil Type Winding Inverter Duty Transformer classifiable under Chapter Heading 8504 and parts of Transformer supplied/to be supplied for initial setting up of solar project falls under Sr. no. 234 in Schedule-I to Notification No. 01/2017-Central Tax (Rate) dated 28,h June, 2017 and liable to Central GST 2.5% along with State GST at the rate of 2.5%. 4. The Gujarat Authority for Advance Ruling (hereinafter referred to as GAAR) vide its order No. GUJ/GAAR/R/07/2021 dated 20.01.2021, gave the following ruling to the above question.- The appellant is liable for payment of GST on the total value of both the purchase order i.e supply of goods and supply of service in terms of explanation inserted vide Entry No. 234 of Noti. No. 01/2017-CT (Rate) dated 28.06.2017 vide Notification No. 24/2018-CT (Rate) dated 31.12.2018. Explanation stated that out of the gross value of the supply, 70% shall be deemed to be on account of goods and 30% deemed to be on account of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply there has to be only one taxable person supplying combination of goods or services. In the case of M/s EAPRO Global Limited (AAR No. 07/2018-19 (2018) TaxCorp (GST) 3689(AAR)) the Authority for Advance Rulings, Uttarkhand held that the entire supply would fall under composite supply as much as 'Solar Power Generating System' is predominant element in the composite supply and it takes the character of the principal supply. Therefore, all the goods should be taxable @5% as 'Solar Power Generating System'. (e) No civil work is involved in this case and the transformer can be moved 'as such' and it is possible for the transformers to shift the base from time to time elsewhere at frequent intervals, unlike solar plants. This is not a typical EPC contract involving the erection, commissioning and installation at the premise of the customer and whatever is done on transformer is being carried out or done at the premises of the appellant. (f) Para No. 30 of the impugned order erroneously mentions that the agreement is for supply of an effectively running transformer as installation and commissioning has not been mentioned in the findings and is bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Limited dated 26.08.2022 whereby it was submitted that the Service Order purely dealt with supply of Supervision of Erection, Testing and Commissioning and Type Test charges i.e complete inspection of equipment and rectification or repairing of parts (in case testing is to be done) of Aluminium Foil Type Winding Inverter Duty transformers and thus no civil works was included in the scope of service. It was further clarified that M/s Adani Solar Energy Chitrakoot One Limited had commissioned the solar power plant in UP District and they are a subsidiary unit of M/s Adani Green Energy Limited and a separate Special Purpose Vehicle and a distinct entity registered entity under the Companies act, 2013. (ii) The appellant stated that when the competent legislature mandates taxing certain person/certain objects in certain circumstances, it cannot be expanded/ interpreted to include those, which were not intended by the legislature. The appellant requested to modify the ruling of the GA AR by holding that the amendment made to Sr.234 of Notification No.01/2017- Integrated Tax (Rate) vide Notification No. 25/2018- Integrated Tax (Rate) dated 31.12.2018 and Notification No.28/2018-In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luminium Foil Type Winding Inverter Duty Transformer and their parts, by the appellants. 8. We find that GAAR has given findings that the appellant to avoid payment of GST in terms of the explanation inserted in the entry No.234 of Notification No.01/2017-CT (Rate) dated 28.06.2017 vide Notification No.24/2018-CT (Rate) dated 31.12.2018 w.e.f. 01.01.2019, providing deemed bifurcation of contract value into 70% of goods and 30% of service, artificially bifurcated the purchase order into supply of goods and service. However, according to GAAR the contract is linked/ single for both the supply of goods and services. We find that the GAAR in its order at Para No. 33 has inadvertently mentioned P.O. No. PO:4500315135 dated 08.11.2019 for service order instead of S.O. No. SO: 5700280769 dated 23.12.2019. 8.1 It is the contention of the appellant that GAAR has erred in holding that the recipient of supply and service is the same i.e M/s Adani Green Energy Ltd whereas they had received two separate Purchase orders i.e one for the supply of Aluminum Foil Type Winding Inverter Duty Transformers for initial setting up of Solar Power Generating System from M/s Adani Green Energy Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent submitted to GAAR whereby it can be inferred that the service order has been placed by M/s Adani Solar Energy Chitrakoot One Ltd. 10. It is found that the appellant had submitted before GAAR copies of two purchase order and one Technical Specification issued by M/s AGEL for Aluminum Winding Inverter Duty Transformers and had discussed and placed reliance on the clauses containing the details of 'Intent of Specification' and the 'Scope of Supply and Services' mentioned in the Technical Specification. Therefore, we find that GAAR has in its findings discussed these three documents in detail and gave the ruling vide the impugned order. As discussed above, the name of M/s Adani Solar Energy Chitrakoot One Limited had never appeared before GAAR as the 'recipient of service' and therefore the contention of the appellant that GAAR has erred in its finding that there is only one recipient of supply, is misleading and far from truth. 10.1 We find that the appellant had referred to the following clauses in its submissions before the GAAR which is reproduced herein under: i) Para 1.1.0 of the 'Intent of Specification' mentions the following:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced the order for the service of Supervision of erection, testing and commissioning of these IDT. We further find that the appellant have at this stage submitted that M/s Adani Solar Energy Chitrakoot One Limited is a subsidiary of M/s AGEL and is an Special Purpose Vehicle and has commissioned the Solar Plant in Chitrakoot. We find that no documentary evidences or Agreement have been produced by the appellant in this regard except the two declarations mentioned at para No. 5. l(i) above. 12. On careful reading of the referred 'Technical Specification' issued by M/s AGEL reproduced at para 10.1 above, it is evident from Clause 1.1.0 of the 'Intent of Specification' and Clause 2.1.0 of the 'Scope of Supply' that M/s AGEL had prepared a comprehensive contract consisting of both the supply of the material and supply of services by way of supervision of erection, testing and commissioning of the Transformers manufactured and supplied by appellant. This is also something which has been submitted by the appellant in their application before GAAR. A conjoint reading of the clauses mentioned above clearly establishes that this is a contract involving supply of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2019. Further it is seen that the 'Technical Specification for Aluminum Winding Inverter Duty Transformers bearing No. 5353-E-SEP-EES-TE-S-L 002' bears the date as 15.7.2019 and the same is issued by M/s. AGEL. It is seen that on 15.07.2019 the Technical specification was issued for the tender purpose and this technical work had a comprehensive clause consisting of the scope for both i.e supply for works and service. From the wordings of the clauses of the Technical Specification issued, it is clear that the contract was for a single supply of goods and supply of services which has been artificially split. Hence, we find that the aforesaid artificial splitting of the contract into two separate orders being placed by two different entities is merely an afterthought so as to circumvent the explanation inserted in entry No 234 of Notification No 01/2017 CT according to which, of the value of gross consideration 70% shall be deemed to be on account of goods and 30% deemed to be on account of service. 14. We produce below the relevant details appearing under Sr. No.234 of Schedule-I to Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 amended vide Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 2017 vide GSR number 673(E) dated 28th June, 2017 9 - The SAC Group Code mentioned above and the service description covered under same is as follows: Heading No. 9954 Construction services Heading no. 9983 Other professional, technical and business services Heading no. 9987 Maintenance, repair and installation (except construction) services. From the description of services given above and covered under the aforesaid Notification entry it is evident that the supplies undertaken by the appellant is squarely covered within the scope of the aforesaid entry. 14.1 The contention of the appellant that their service i.e. supervision of erection and commissioning does not fall either in SAC 9954, 99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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. 11/2017-Central Tax (Rate), dated 28th June, 2017 [G.S.R. 690(E)], the value of supply of goods for the purposes of this entry shall be deemed as seventy per cent, of the gross consideration charged for all such supplies, and the remaining thirty per cent, of the gross consideration charged shall be deemed as value of the said taxable service , it is clear that the explanation provided is supplier based and not recipient based. Here, on examination of the purchase orders of supply of goods and services and the technical specification for the said supply of goods and services it is found that the supply of goods is made alongwith the supply of services and it therefore fulfills the conditions laid down under the said explanation. 17. Further we find that the Entry No. 234 appearing under Schedule-I to the Notification No.01/2017-CT (Rate) dated 28.06.2017, was omitted vide Notification No. 8/2021-CT (Rate) dated 30.09.2021. The description of goods covered under Entry No.234 alongwith the explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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