TMI Blog2019 (2) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rate) dated 28.06.2017, as amended from time to time. Thus, the activity of supply, design, installation, commissioning and testing of reverse osmosis plant and O &M work by the applicant is a Works Contract of Composite Supply. This composite supply is a mixed of goods and services and predominant supply is supply of services. Since this supply is undertaken for a Government Department viz. PHED which is a Government of Rajasthan Department, hence the rate of tax applicable on given service (as it is a works contract service) shall fall under Entry 3(iii) with HSN Code 99544 and it should be IGST @ 12% (CGST @ 6%, SGST @6%). - ARN No. RAJ/AAR/2018-19/31 - - - Dated:- 31-1-2019 - J.P. MEENA AND HEMANT JAIN MEMBER Present for the applicant: Mr. Mudit Jain, (Authorised Representative) Note : Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order. The issue raised by Mr. Kailash Chandra, (M/s. Mali Construction), situated at Mali Vas, Maandava, Mandwa, Sirohi, Rajast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... installation and commissioning of Solar/ Battery operated Cluster dispensers (a standalone Cement Ring Structure having storage water tank) and transporting water from mother Reverse Osmosis Plant to Cluster dispensers, wherever installed, through Water tankers. c) Transporting water from mother Reverse Osmosis Plant to Cluster dispensers, wherever installed, through Water tanker suitable for the purpose of providing / storage drinking / potable water fitted with Submersible pump to transmit water from water tanker to Cluster dispenser. d) A comprehensive operation and maintenance of the installations for a period of 7 years. e) Delivering potable water from plant site that meets BIS norms at all times. Providing potable treated water to be supplied to the general public at the site of RO plant on charging prescribed rates. 1.3. Since composite supply of works contract has been explicitly classified as supply of service under Schedule Il, tax liability on works contract service has been expressly prescribed. Therefore, the concept of works contract should to be discussed and settled first. However under GST, there is a monumental shift in concept of Works Contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tallation; commissioning, operation and maintenance are services availed for better functioning and operation of the RO plant supplied. The payment schedule for supply, erection, commissioning and O M of RO unit also indicate that supply of RO plant is the predominant supply. 1.8. Since the predominant element of the supply shall be supply of RO plant, thus the proposed work should be treated as a supply of goods and not a supply of service. The installation, commissioning, operation and maintenance of the plant, construction of waste water disposal system shall be the ancillary services. 1.9. Since RO plant is a system consisting of various individual components such pumps, filtration units, tanks, controllers etc. interconnected by various devices and cluster dispensers being a part of the system although separately placed, and the whole RO plant is intended to contribute for filtering or purification of water, thus it should be classified under the heading 8421 and further under tariff item 84212190 in the First Schedule to the Customs Tariff Act, 1975 under Entry 322 of the Notification No. 01/2017- CT(Rate). 1.10. Hence according to applicant, the proposed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b) b. As per Section 2(30) composite supply is defined as (30) composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; c. Further principal supply is defined under Section 2(90) as (90) principal supply means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; d. Further, clause 6 of the Schedule II is read as under The following composite supplies shall be treated as a supply of services, namely:- i. works contract as defined in clause (119) of section 2 e. The term works contract has been defined under Section 2(119) as (119) works contract means a contract for building, construction, fabrication, completio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its components and thus cannot be reassembled, then the items would not be considered as moveable and will, therefore, not be excisable goods. Though the concept of excisable is not applicable here but the inference can be drawn what is movable and what can be immovable from given clarification. 5. As mentioned in the facts above, that in brief, following activities are covered under the scope of works proposed to be undertaken by the applicant: Design, supply, install, test and commission Reverse Osmosis Plants to treat ground water and provide potable water of BIS standards, along with raw water and treated water storage tanks, construction of housing structure for RO plant and all the necessary works for operation for such work. Bidder may install containerized RO plants. Providing, installation and commissioning of Solar/ Battery operated Cluster dispensers (a standalone Cement Ring Structure having storage water tank) and transporting water from mother Reverse Osmosis Plant to Cluster dispensers, wherever installed, through Water tankers. A comprehensive operation and maintenance of the installations for a period of 7 years. Delivering potable wat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, - (a) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); (b) canal, dam or other irrigation works; (c) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal. 6 6 12 Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be; K. It is therefore, the activity of supply, design, installation, c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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