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TMI Blog2024 (2) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Supreme Court of India observed that attachment of the plant in question with the help of nuts and bolts to a foundation intended to provide stability to the working of the plant and prevent vibration/wobble free operation does not qualify for being described as attached to the earth. The court further held that manufacture of the plants in question do not constitute annexation hence cannot be termed as immovable property. However, in the case at hand, there can be no dispute in this regard that the intention of annexation of air conditioning system and fire extinguishing system involves significant degree of permanence. Further, contrary to the observation made by the Hon ble Apex court that the plant can be moved and is indeed moved after the road construction or repair project , air conditioning system and fire extinguishing system are not intended to be moved and indeed not moved after they are installed in the building. In the instant case, rate of tax on supply of hiring services of air conditioning system and fire extinguishing system would not be determined vide serial number 17(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. According to ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eforth for the purposes of these proceedings, the expression GST Act would mean the CGST Act and the WBGST Act both. 1.2 The applicant submits that being a 100% Export Oriented Unit registered with Software Technology Park of India, Kolkata, it provides ITes services to its clients located in USA. The applicant, as a sub lessee, has entered into a Sub Lease Deed with M/s Bengal Intelligent Parks Private Limited (hereinafter referred to as, BIPPL) whereby the sub lessor grants the applicant to use a specified area on the 11th floor in the Building Omega of Bengal Intelligent Park, Block EP GP, Sector V, Salt lake to conduct business activities from the said premises. 1.3 The applicant submits further that BIPPL has made arrangements with M/s TCG Urban Infrastructure Holding Pvt Ltd (hereinafter referred to as, TCGUIH) to provide assets and fit-outs on hire to the licensees and sublessees of the said building. Accordingly, the applicant has entered into an agreement with TCGUIH to avail facilities and services installed in the building which includes inter alia central air conditioning system, DG set, electrical equipment, sprinkler system etc. 1.4 The applicant clarifies that it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 97 or sub-section (1) of section 100 of the GST Act in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. In the instant case, the question on which the applicant seeks an advance ruling is not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant rather it is found to be in relation to supply being received by the applicant. 1.9 Further, sub-section (1) of section 103 of the GST Act categorically speaks that the ruling pronounced is binding only on the applicant and on the concerned officer or the jurisdictional officer in respect of the applicant. Therefore, if an application is filed by the recipient of goods or services or both on the taxability of his inward supply of goods or services and ruling is pronounced accordingly, such ruling shall be binding only on him and on the concerned officer or the jurisdictional officer of him. In no way, the ruling shall be binding on the supplier of such goods or services. In the instant case, the applicant has sought an advance ruling on the applicable rate of tax to be charged by its supplier namely TCGU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is common DG set in order to provide emergency power back up for each floor. There are also fit outs, assets like electrical equipment, fire extinguishing sprinkler system etc. installed to provide required facilities and services through such assets to the said sub-leased space. The applicants have no control/title over the said fit outs and assets, but have the right to use the facilities and services of such fit outs, fixed assets and services on payment of agreed rate as hire charges. 1.13 As per the agreement between TCGUIH and the applicant, the legal possession of the assets shall be with TCGUIH at all times. The applicant only has right to use the said fit outs and assets, facilities/ services till the period of the agreement. Hence, nature of agreement between TCGUIH and the applicant is not that of hire purchase but only operational service lease. 1.14 The applicant has furnished copies of few invoices wherefrom it is noticed that tax has been charged @ 28% by TCGUIH declaring the same under SAC 997314. However, the applicant contends that the instant supply of services would attract tax @ 18% for the following reason: As per second schedule of the agreement made betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Heading 9973 has been specified in serial number 17 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (corresponding West Bengal State Notification No. 1135 F.T. dated 28.06.2017), as amended from time to time. As on date, the said entry reads as under: Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 17 Heading 9973 (Leasing or rental services, without operator) (i) omitted (ii) Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) right. 9 (iii) Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration. (iv) Any transfer of right in goods or of undivided share in goods without the transfer of title thereof. Same rate of State tax as on supply of like goods involving transfer of title in goods (v) omitted (vi) Leasing of motor vehicles purchased and leased prior to 1st July 2017; . (vii) omitted (viia) Leasing or renting of goods (viii) Leasing or rental services, without operator, other than (i), (ii), (iii), (iv), (vi), and (viia) above. 9 65 per cent. of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re individual supplies without any principal supply against a single price. We are of the view that all the conditions specified in clause (74) of section 2 of the GST Act get satisfied in respect of the instant supply and we, therefore, hold the supply to be a mixed supply. 1.21 Tax liability on composite supply and mixed supply has been laid down in section 8 of the GST Act. As we have held the supply to be a mixed supply, we reproduce the relevant portion of the said section herein under: The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:- (a) * * * * (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. 1.22 So, in order to determine the rate of tax of the instant supply, it is necessary to ascertain the supply that attracts highest rate of tax. As per serial number 17(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration attracts same rate of tax as on supply of like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be regarded as goods. 1.24 In Solid and Correct Engineering Works [2010 (252) E.L.T. 481 (S.C.)], the Hon ble Supreme Court of India observed that attachment of the plant in question with the help of nuts and bolts to a foundation intended to provide stability to the working of the plant and prevent vibration/wobble free operation does not qualify for being described as attached to the earth. The court further held that manufacture of the plants in question do not constitute annexation hence cannot be termed as immovable property for the following reasons: (i) The plants in question are not per se immovable property. (ii) Such plants cannot be said to be attached to the earth within the meaning of that expression as defined in Section 3 of the Transfer of Property Act. (iii) The fixing of the plants to a foundation is meant only to give stability to the plant and keep its operation vibration free. (iv)The setting up of the plant itself is not intended to be permanent at a given place. The plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed. 1.25 However, in the case at hand, there can be no dispute in this regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m would not be determined vide serial number 17(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. According to our view, each of the supplies would attract tax @ 18% under serial number 17(viii) of the said notification as leasing or rental services and therefore, the supply received by the applicant from TCGUIH, being a mixed supply, would also be taxable @ 18% i.e., supply which attracts the highest rate of tax. 1.28 The issue now left with us is to determine whether the applicant is eligible to avail the credit of tax being paid by him to the supplier. The term input tax has been defined in clause (62) of section 2 of the GST Act which reads as under: input tax in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes- (a) the integrated goods and services tax charged on import of goods; (b) the tax payable under the provisions of sub-sections (3) and (4) of section 9 ; (c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act; (d) the tax payable under the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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