Home Case Index All Cases GST GST + AAAR GST - 2018 (12) TMI AAAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 1228 - AAAR - GSTClassification of services - Works Contract or Composite Supply - combination of services of excavation of sand including loading with machinery at reach, Formation of Ramps and Maintenance of Roads, Transportation charges for the tractors/tippers of sand from reach to stockyard and Loading cost at sand from stockyard to lorries - rate of tax. Principal supply in a composite supply - Whether, in the services provided by the applicant under the Agreement with TSMDC, the ‘principal supply’ is that of ‘excavation of sand’ as held by the Central Member or ‘transportation of goods i.e., sand’ as held by the State Member? - Held that:- The basic intent and purpose of the Tender / Contract-Agreement and the concomitant description of the scope of the work therein is to move / shift the mineral sand from one place to another, by means of transport by roads/ramps; for enabling the further despatch by TSMDC. The said activity i.e., transport of sand from one place to another therefore constitutes the predominant element in the instant case; the other activities of excavation (or extraction as also mentioned in Agreement), loading, unloading and reloading as also formation / maintenance of ramps/roads, are the incidental or ancillary activities, preceding, coinciding or following the said main activity of ‘transportation from one place to another’ - the principal supply involved in this case is ‘transportation of goods’ as held by the State Member and not ‘excavation of sand’ as held by the Central Member. What is the classification of the “principal supply” which would thereby be the classification of the “composite supply” as held by the lower Authority? - Held that:- The ‘principal supply’ in the instant case is that of transportation of goods i.e., sand. It is an urn-disputed fact and also explicitly recorded in the Agreement and tender documents that the said transport is by road only. The Scheme of Classification of services is laid down in the Annexure to the Notification No. 1 1/201 7-Central Tax (Rate) dated 28-6-201 7 which contains the entries pertaining to Land transport services - The classification of the services rendered by the applicant which have been held to be “composite supply” and in which the principal supply is found to be ‘transport of goods by road’ are correctly classifiable under the Service Code (Tariff) 996511 under the Scheme of Classification of services laid down in Annexure to Notification No. 1 1/201 7- Central Tax (Rate) dated 28-6-2017. Whether the vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are to be considered as covered by the term ‘vessel’ appearing in the Notification-entry as held by the State Member or as not covered by the term as held by the Central Member? - Held that:- The vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are not covered by the term ‘vessel’ appearing in the Notification-entry as held by the Central Member; the contrary opinion expressed by the State Member is found to be not legally correct. What is the applicable rate of tax on the consideration received by the applicant for the impugned services? - Held that:- The applicable entry in respect of the impugned services would be the entry item Sl.No. (v) viz., “Goods transport services other than (i), (ii), (iii) and (iv) above” for which the applicable rate of tax is prescribed as 9% CGST (and correspondingly 9 % SGST). Hence, the applicable rate of tax on the impugned services is 9 % CGST + 9 % SGST (aggregating to 18%). Ruling:- The opinion expressed by the State Member in so far as holding that the ‘Transport of goods’ is the principal supply in the impugned services, is confirmed. The classification of the impugned services is under Service Code (Tariff) 996511 Road Transport of goods.., as per Annexure to the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017. The opinion expressed by the Central Member in so far as holding that the term ‘vessel’ (appearing in item (ii) under Column (3) against entry at Sl.No.9 of the above Notification), is not applicable to the applicant’s case, is confirmed.
|