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TMI Blog2019 (2) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling. 1. SUBMISSION AND INTERPRETATION OF THE APPLICANT: 1.1. The applicant is engaged in providing the comprehensive water services to the clients by way of water conservation, water distribution, water purification, water supply management, etc. That currently the applicant is in the process of bidding for tender floated by P.H.E.D., a unit of Rajasthan Government for designing, providing, installation, commissioning, operation and maintenance of solar energy based bore well water pumping systems, Reverse Osmosis Plant and operation and maintenance of Fluoride Control Project on ESCO and O & M contract. 1.2. That in relation to such tender the applicant is required to quote a rate for undertaking all the aforesaid activities which shall be inclusive of all the costs of site visits on the part of the applicant, packaging, forwarding, spare parts, insurance and taxes & duties as may be applicable. Hence, in view of the same the applicant is desirous of knowing its liability of GST in relation to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng fluoride free water and water saving on prime places like gram panchayat bhawan/ office, school/ govt. building/ main choraha as approved by Engineer-in charge. h) Providing potable water to villagers regularly free of cost at site of SPV plant during and up to end of O&M period i) Complete system shall be under comprehensive warranty of contractor for a period of seven years from the date of commissioning against any defects. j) The operation and maintenance of complete system shall be responsibility of the contractor during this entire period of 7 years wherein the applicant shall keep the plants operational regularly with specified flow/ quantity of water. k) That on the expiry of the O&M period, the applicant may remove the plant at its own cost and vacate the land subject to prior intimation to PHED and shall take the possession of the plant. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and thus it is the predominant element of the composite supply, to which its installation, commissioning, operation and maintenance is ancillary since these services are provided for better functioning of the system supplied. 1.9. In addition to this, the proportion of the consideration for both supplies as per the payment schedule of the contract indicate that providing the solar energy based water system is the predominant supply. 1.10. On the basis of above facts and interpretation, in the given contract the principal supply is supply of solar power based water system and since such system is a movable property, thus the given work is a composite supply where principal supply is supply of goods and thus, applicant understands that the given work should be treated as a supply of goods and cannot be treated as supply of service. 1.11. Since solar power based water pumping system is a system, consisting of various individual components such PV modules, pumps interconnected by various cables and other transmission devices, intended to contribute for filtering or purification of water, thus, it should be classified under the heading 8421 and further under tariff item 8421 21 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Jain (Authorised Representative) of applicant appeared for PH. During the PH, he reiterated the submissions made in the application. He further submitted an additional document and requested that the case may be decided at the earliest. 4. COMMENTS OF THE JURISDICTIONAL OFFICER The jurisdiction officer has stated that on the basis of submissions submitted it is found that the activities undertaken by the applicant is a composite supply of goods and GST is as applicable to it. 5. FINDINGS. ANALYSIS & CONCLUSION: a. According to Section 8 of Central Goods and Services Tax Act, 2017 8. The tax liability on a composite or a mixed supply shall be determined in namely:- (a) comprising two or more supplies, one of which is a 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 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence the reliance needs to be placed on other laws and judicial precedents. Under the General Clauses Act 1897 the term immovable property has been defined under Section 3(26) as "immovable property" shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth; 4. On the given issue, CBEC has also clarified in its circular number 58/1/2002-CX dated 15/1/2002 where in para (e) it was clarified that e) If items assembled or erected at site and attached by foundation to earth cannot be dismantled without substantial damage to 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 of solar energy based water pumping systems along with construction of housing str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration 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, darn 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, commissioning and testing of solar ener47 based water pumping systems along with construction 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 se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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