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2022 (2) TMI 1099 - AAR - GSTClassification of services - Support services to exploration, mining or drilling of petroleum crude or natural gas or both - classified under Sr. No. 24(H) of Heading 9986 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 or not - services provided by the Applicant are classified under 'Other professional, technical and business services relating to exploration, mining, or drilling of petroleum crude or natural gas or both' under Sr. No 21(ia) of Heading 9983 of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 - appropriate classification - rate of GST - Whether the supply to be made by the applicant under the EPC contract awarded to them would be classified as “Support services to mining or other Professional, Technical & Business services relating to exploration, mining or drilling of Petroleum Crude or Natural Gas or Both or otherwise in any other service”? - HELD THAT:- From the explanatory note it reveals that Support Services shall include the services to be provided for exploration, once the infrastructure/facility for exploration is built & complete in all respect and ready to start exploration. But it does not include the services to be provided before creating the infrastructure/facility. Under the EPC contract the applicant has to undertake activities from Designing, Engineering, Procurement, construction of customised facility, commissioning of permanent facility, Test run and hand over of complete facility so designed, constructed, tested & commissioned. Thus it cannot be treated as support services to oil & gas extraction - Similarly other professional, technical & business services are classified under heading 9983. The heading covers other Professional, Technical and business services relating to exploration, mining or drilling of Petroleum crude of natural gas or both. This heading covers “pure services” of other Professional, technical & business related and not the services provided under a EPC contract which include Engineering, Procurement & Construction. The applicant has to undertake the Designing, Engineering, Procurement, construction of customised facility, commissioning of permanent facility, Test run and hand over of complete facility so designed, constructed, tested & commissioned. Thus it cannot be classified as other professional, Technical and Business services relating to exploration, mining or drilling of petroleum crude or natural gas or Both - the services provided by the applicant neither fall under “Support services to exploration mining or drilling of Petroleum crude or natural gas or other professional, Technical and business services relating to exploration, mining or drilling of Petroleum crude or natural gas or Both. The contract is for the engineering, procurement and commissioning of MLJPS2-EPC-2 project including various infrastructure facilities, all commissioned. What would be transferred is the project including the civil work and land involved in project. Various civil structure would be created and various equipment would be installed - the said project cannot be shifted anywhere; it is essentially of the nature of immovable property. The project after completion at the time of transfer will be an immobile property. It is thus, we are of the considered view that the work specified in the EPC contract qualifies as “work contract” and will be taxed accordingly. The services provided under EPC contract awarded to the applicant by M/S Vedanta for setting up of a project broadly ranging from designing, engineering, procurement, fabrication, manufacturing assembly, erection & installation, facilities construction, insulation, dismantling, Pre commissioning & Commissioning training etc. and satisfactory hand over of complete various infrastructure facilities all customised as per contract, it is a “work contract'' of composite supply. The composite supply is a mixed of goods & services and would be taxed accordingly under S. No. 3 Heading 9954 (ii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 and GST @ 18 % is payable.
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