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TMI Blog2025 (3) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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. M/s. Tecnimont Private Limited, [for short 'appellant'] is a wholly owned subsidiary of Tecnimont S.P.A. Milan, Italy is an EPC [Engineering Procurement and Construction] Company and is registered with the department. 3. Briefly, the relevant facts concerning this appeal as is canvassed by the appellant, is as under: * that they have entered into a turnkey contract with IOCL [Indian Oil Corporation Ltd], for executing EPC work of Acrylic Acid Unit (90 KTA) and Butyl Acrylate Unit (150 KTA) at Vado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 high seas sale basis to 1OCL? If yes, what will be the applicable rate of tax on such goods supplied? 5. Consequent to personal hearing, the GAAR [Gujarat Authority for Advance Ruling] recorded the following findings viz: * the appellant ignores the fact that it is a lumpsum turnkey EPC contract; that to divid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecipient of the supply was legally bound via the agreement to provide for free diesel, yet the Hon'ble High Court, held that the free supply of diesel would form part of the transaction value, for the purpose of GST. * the argument that it is a divisible contract entailing [a] supply of imported goods and [b] supply of services is not borne out from the reading of the contract and the relevant documents thereof. * that the imported goods supplied on HSS basis are subject to tax as intra state supply belies fact, since what is supplied under the works contract is not the imported 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 follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and separate rights arising out of the contract depends entirely on the intention of the parties; * that the contract cannot be treated as an indivisible contract since imported supply is a distinct supply; * that they would like to rely on the case of Power Grid Corporation Ltd 2007 (108) ITD Hyd, Gannon Dunkerly & Company 1958 AIR 560, L.S. Chandramouli and Co 1966 (18) STC 325, Mahindra and Mahindra 1995 (76) ELT 481 SC, Mirah Exports P Ltd 1998 (98) ELT 3 SC, Bhopal Sugar Industries Ltd 1977 AIR 1275, Indure Ltd and Ors 2010 9 SCC 461, L & T 2015 SCC online Hyd 866. * that once the supplies are held to be distinct, the consideration of one supply cannot be added to the value of separate distinct supply for the purpose of GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree with the finding that in terms of section 15, ibid, the value of such imported goods invariably forms an integral part of the Transaction value. Thus, the averment that the GAAR had mis-interpreted the provisions of section 15 (2) (b) of the CGST Act, 2017 is not a plausible argument. 14. The next averment raised is that the sale of imported materials would not form part of the composite supply & hence would not form part of the overall works contract. The averment has already been answered in paragraphs 21 and 33 of the impugned ruling. Since nothing is produced compelling us to interfere with the said finding, we agree with the findings of the GAAR in this regard. 15. The appellant has further averred that the reliance on the judgem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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