TMI Blog2019 (7) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... oling/heating, circulation, collection drain circuit. TPL should erect these fluid systems at the site along with their piping circuits and instrumentations by means of minor civil works done with concrete, brick masonry, grouting, bolts etc. TPL should fabricate and procure the relevant materials, instruments and equipment as defined in the contract. Along with these, TPL should also manage the complete project, plan, review the design, and give detailed engineering drawing for all these systems. They should also ensure inspection, transportation, construction and commissioning of the FSS, though various activities are to be done with assistance of IPRC. TPL supplies Goods and Services as required in the contract. It is to determine if the supply of goods and services by the applicant under contract to ISRO can be considered as a composite supply. Mere supply of the equipment, instruments, pipes and fluid tanks is not enough, the same has to be integrated and erected and finally commissioned at the test - bed facility. The Contract itself shows that the supply of these equipment and instruments are necessarily to be given with a host of services such as designing, engineer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Subsection (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s. Tata Projects Limited , No.9, First Floor, AF Block, 8th Street, 11th Main Road, Anna Nagar, Chennai-600040 (hereinafter called the Applicant or TPL) are engaged in the process, design, detailed engineering, procurement, shop fabrication inspection, supply, storage, site fabrication, erection, inspection commissioning of fluid servicing system of Semi Cryo Integrated Engine Test Facility. They are registered under GST with GSTIN 33AAACT4119L1ZF. They have preferred an application seeking Advance Ruling on : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portation of items to Chennai Seaport/Trivandrum Airport Supervision during Erection Supervision of Commissioning. Supply of Materials: All the materials such as equipments, flow components, instruments, pipes and fittings are to be purchased and supplied by the applicant. Spare parts and consumables for erection and commissioning: For the materials used in the FSS, the applicant is responsible to provide spare parts and consumables to be replaced /used during erection commission. Civil Works: Major Civil Works: Major Civil works are not in their Scope. The following major Civil works will be provided by ISRO- Test-bays with foundation; Pavement and approach roads; Buildings and Sheds; Blast wall spillage protection walls; Foundation for equipment. Minor Civil Works: The minor civil works are in the scope of the applicant which covers providing Plain cement concrete, Reinforced cement concrete, brick masonry, grouting, anchor bolts. Erection Commissioning Includes: Mounting of Equipments Structural Works. Electrical works Commissioning The composition of the price breakup of contract price is as below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble supplies should be supplied in conjunction with each other; and (d) One taxable supply should be principal supply It is evident from the above that the contract involves supply of various equipment and services. As per the contract, TPL will supply goods and also carryout services related to the erection, installation and commissioning of the goods. As per Clause 15 of the Contract Agreement, the applicant is the prime contractor and is responsible for performance of all systems involved. Hence, entire contract(both goods and services) is bundled and linked where the main intent is provision of the goods which constitute establishment of Fluids Servicing System.; As mentioned in the scope of the Contract, TPL shall supply all the materials and complete erection and commissioning for the supplied goods with the specifications of contract.; It is evident from Clause 18.1 and Annexure-7 of the contract agreement and the price break-up given , procurement and supply of materials pertaining to scope including shop fabrication, testing and inspection at manufacturers site constitutes 86% of the Total contract Value. Works Contract is also defined as Composite Supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Technical Write-up, the applicant stated: ISRO is developing Semi Cryogenic Engine of thrust 2000kN working on Isrosene/ Liquid Oxygen propellant combination for propelling launch vehicles capable of placing satellites of mass 6t to 10t in Geo-Stationary Transfer Orbit. ISRO Propulsion complex (IPRC), Mahendragiri is entrusted with the task of integrating and testing of Semi Cryogenic propulsion systems. TPLs Scope of work:- This is an item rated contract and unit price for all items remain valid as long as price of actual quality installed is within + /10% of contract value. The FSS is intended to supply propellants and service fluids to the test articles and the associated facility systems. The process design of entire fluid system is done by ISRO. The equipment layout and P IDs is also produced by ISRO. TPLs responsibility is to carry out the detailed engineering and calculating the quantities based on the layouts and P IDs provided by the client. TPL s scope of supply include low pressure Run Tank, LN2 storage tank, Bath type heat exchanger, mixer, liquid oxygen tank, liquid nitrogen tank, isosene tank, spiral heat exchanger, atmospheric vaporizer, isosene pum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter erection, all the fluid circuits for cryogenic and non-cryogenic systems first undergo functional testing involving functional check, analysis, verification of instruments and validation. These are standalone tests and no integrated commissioning is carried out. The FSS which they are supplying is only ancillary to the entire engine test facility and is not integrated to the test facility. It is a standalone system comprising of equipments, piping and electrical and instrumentation items which can be removed as such and therefore it is not immovable. The same FSS can be created elsewhere with the above equipments. Therefore, the project undertaken is primarily supply of equipments, pipes vales and instrumentation items with minor services like structural works equipment erection commissioning and performance tests which would qualify as composite supply of goods and services and do not qualify as works contract. 3.3 The Applicant was again heard on 22.02.2019 and stated that they are constructing various fuel tanks along with heat exchange pipelines, valves, switches connecting to the test bed of the Cryogenic Engine. The test bed is built by ISRO. The Civil work inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equipment(including computers) to public funded research institution other than a hospital or an university or an Indian Institute of Technology or Indian Institute of Science, Bengaluru or National Institute of technology/ Regional Engineering College subject to condition that such institution produces a certificate to the supplier at the time of supply of specified goods. Being so, the establishment of FSS may include supply of Scientific and technical instruments, apparatus, equipment. ISRP propulsion Complex (abbreviated as IPRC) is responsible for the supply of storage liquid propellants for ISRO s launch vehicle and satellite programme. ISRO is funded through union budget from Government of India. Hence, the exemption under Notification no.45/2017- Central Tax(Rate) dated 14th November 2017, may apply in the instant case for the applicant subject to condition that such institution produces a certificate to supplier at the time of supply of the specified goods. At the same time, intention of the notification 45/2017 CT (Rate) specifically mentioned that exemption is only to supply of scientific and technical instruments, apparatus, equipment etc. and the same is not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponsibility and Obligation Matrix between IPRC, TPL CGM (Annexure 10) it is seen that TPL is responsible for Project Management - Plan, Coordination with ISRO, Documentation from/ to ISRO, Schedule Control, Quality Control in respect of Project management; o Basic Design Review - Design review for comprises ISROSENE system, Liquid Oxygen System, Liquid Nitrogen system, Gaseous Nitrogen System, Gaseous Helium System, Water System process facility, pipe line layout, legal regulations Detail Engineering - Engineering, design, drawing, manufacturing / procurement of equipment for the various fluid systems, pump, machinery Piping- Design, plot plan, equipment layout, procurement, erection, test analysis Instrument Control-Design, procurement, Electrical, Insulation - Design, procurement, o Chemical consumables- Procurement Inspection Transportation - Third party inspection and inland offshore transportation of all material supply Construction - Planning, supervision, installation work, piping, civil, structural, building electrical installation, insulation works of equipment, machinery instruments Pre-commissioning Commissioning- Planning, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . They should also ensure inspection, transportation, construction and commissioning of the FSS, though various activities are to be done with assistance of IPRC. From the listed summary, it is seen that TPL supplies Goods and Services as required in the contract. It is to determine if the supply of goods and services by the applicant under contract to ISRO can be considered as a composite supply. 6.2 Section 2(30) of CGST Act, 2017 defines Composite Supply as: 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; In the case at hand, TPL supplies Non Cryogenic Tanks, Heat exchanger and Pumps for cooling ISROSENE, Ejector System, LN2 Bath Type Heat Exchanger For Cooling GN 2 and GHe, Vaporizers, Chilling Water Plant, Steel Pipes, Pipe Fittings including Flanges, Super-insulated Pipelines, Flexible Hoses, Electro-Pneumatic Valves, Control Valves, Non-return Valves, Safety Relief valves, Rupture Disc De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty which is embedded in earth. Hon ble Supreme Court in the case of Commissioner of C.Ex. Ahmedabad Vs. Solid Correct engineering works [2010 (252) E.L.T. 481 (S.C.)] = 2010 (4) TMI 15 - SUPREME COURT , has stated 33. It is noteworthy that in none of the cases relied upon by the assessee referred to above was there any element of installation of the machine for a given period of time as is the position in the instant case. The machines in question were by their very nature intended to be fixed permanently to the structures which were embedded in the earth. The structures were also custom made for the fixing of such machines without which the same could not become functional. The machines thus becoming a part and parcel of the structures in which they were fitted were no longer moveable goods. It was in those peculiar circumstances that the installation and erection of machines at site were held to be by this Court, to be immovable property that ceased to remain moveable or marketable as they were at the time of their purchase. Once such a machine is fixed, embedded or assimilated in a permanent structure, the movable character of the machine becomes extinct. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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