9911796707
TMI Blog2025 (3) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... SUPREME COURT] and Gannon Dunkerley & Co., [1958 (4) TMI 42 - SUPREME COURT], to aver that it is a divisible contract is not tenable owing to the fact that in terms of the contract the applicant was contractually bound/liable to supply both the goods and services. Levy of tax on that part of the goods which are sold on HSS basis - HELD THAT:- In terms of Schedule III, read with section 7 (2) of the CGST Act, 2017, supply on High Sea Sale basis, is treated as neither a supply of goods nor a supply of services. It is found that the impugned ruling clearly states that the EPC contract encompasses both the supply of goods and services and that in terms of the contract, the appellant is liable to provide the goods [supplied on HSS basis]. Therefore, the submission that the value is not to be included in the transaction value in respect of works contract service is legally not tenable more so since as is already mentioned, the applicant is contractually bound/liable to supply both the goods and the services. The averments even otherwise, stand answered in paragraph 34 of the impugned ruling. Hence, the finding that in terms of section 15, ibid, the value of such imported goods invariab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant raises a custom invoice with respect to such goods; that IOCL then files a B/E as the importer of the said goods and discharges customs duty and IGST by clearing the goods for warehousing or home consumption. The applicant treats this as a separate supply of goods distinct from the works contract supplies; * that the supply of goods in the course of import into India cannot be subject to tax as intra-state supply; * sale of goods on HSS basis cannot form part of a composite supply of works contract service. 4. In view of the foregoing facts, the appellant sought Advance Ruling on the following questions, viz: 1. Whether the transaction of sale of goods by Tecnimont Pvt. Ltd. (TCMPL) to Indian Oil Corporation Ltd. (IOCL) on High Seas Sale basis in terms of Contract No. 44AC9100-EPCC-1 would be covered under Entry No. 8(b) of Schedule III of the CGST Act and shall be excluded from the value of work contract service for charging GST? 2. Whether the transaction of sale of goods on high seas sale basis by the Applicant to IOCL in terms of Contract No. 44AC9100-EPCC-1 would be treated as works contract and whether Applicant is liable to charge GST on the goods sold on hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods but Acrylic Acid & Butyl Acrylate Unit of Acrylic /Oxo-Alcohol Project. 6. The GAAR, thereafter, vide the impugned ruling dated 30.5.2024, held as follows: 1. The transaction of sale of goods by Tecnimont Pvt. Ltd. (TCMPL) to Indian Oil Corporation Ltd. (IOCL) on High Seas Sale [HSS] basis in terms of Contract No. 44AC9100-EPCC-1 is covered under Entry No. 8(b) of Schedule III of the CGST Act. However, in terms of the findings recorded supra, the value of such HSS supply would form a part of the transaction value under section 15, ibid, for computing the value of work contract service for charging GST. 2. The transaction of sale of goods on high seas sale [HSS] basis by the applicant to IOCL in terms of Contract No. 44AC9100-EPCC-1 as has been held supra, is covered under entry 8(b) of Schedule III of the CGST Act, 2017 and therefore the HSS supply is neither a supply of goods nor a supply of services. 7. Aggrieved, the appellant is before us, raising the following contentions, viz * that the impugned ruling in so far as it holds the value of HSS supply to form part of transaction value u/s 15 for computing the value of WCS for charging GST, is erroneous; * that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act; (ii) that the provisions of section 15 (2) (b) of the CGST Act, 2017 has been mis-interpreted; (iii) that the reliance on the judgement of M/s. Shree Jeet Transport of the Hon'ble Chhattisgarh High Court is misplaced; (iv) that even if the contract is considered indivisible, no tax can be levied on that part of the goods which are sold on HSS basis; (v) that the sale of imported materials would not form part of the composite supply & hence would not form part of the overall works contract; (vi) that the sale of goods on HSS suffers IGST & hence treating it as a part of the works contract would result in double taxation. 11. Moving on to the first averment that the contract is a divisible contract, we find that the GAAR vide its impugned ruling dated 5.1.2024 after dwelling into what is a works contract in terms of section 2(119), ibid, and further relying on the judgement of Kone Elevator India Private Limited 2014 (304) E.L.T. 161 (S.C.) held that [i] works contract for EPC work pertaining to EPCC-1 project; & [ii] supply of imported materials for the said project, is a lumpsum turnkey EPC contract & hence division of a turnkey EPC contract into two parts, is legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that in this judgement the emphasis is on the nature of the business & that the Hon'ble Court seems to have completely ignored the pre-requisite of an obligation to fall under the scope of Section 15 (2) (b) of the CGST Act, 2017. While making this argument the appellant ignores the inclusions in the letter of acceptance, which is reproduced in paragraph 29 of the impugned ruling, which clearly depict that the averment that there is no obligation for supply of impugned goods is not factually true. Given the facts of the case, the findings recorded by the Hon'ble Chhattisgarh High Court, we are in agreement with the view taken by the GAAR by relying on this judgement. 16. Moving on to the other averments raised we observe that the averments have already been raised by the appellant during the course of proceedings before the GAAR. The same have been answered in detail by the GAAR. The appellant we find has repeated the averments already made before the GAAR has not been in a position to point out or place any material which would call for an interference with the impugned ruling. 17. In view of the foregoing, we uphold the impugned ruling dated 5.1.2024 and reject the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
