TMI Blog2023 (7) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... . On examining further, it could be observed that even though the term attached to the earth has not been defined in the General Clauses Act, 1897 - The civil structure in this case is a sewerage pumping station under KMC, the very purpose of which is pumping of sewerage for further treatment disposal. The pump is essential to this activity and is thus expected to be installed and fastened at its place of installation throughout its operational life, and is thus installed for the permanent beneficial enjoyment of the civil structure to which it is attached to. Thus, in light of the facts of the case, the pump on installation would be an immovable property, and thus the installation, repair and maintenance of pump at the sewerage pumping station would qualify to be works contact service as per Section 2(119) of GST Act. Supply to Local authority - HELD THAT:- The Notification would be applicable to supplies made to a local authority. In this case, the applicant is making supply to Kolkata Municipal Corporation, hereinafter also referred to as KMC - Kolkata Municipal Corporation (KMC) is a Municipality constituted under Article 243P of the Constitution; KMC is a local authority, as d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply of works contract as defined in clause (119) of section 2 of the GST Act made to a local authority by way of erection, installation, and maintenance of a sewerage treatment plant and would be taxable at the rate specified in serial number 3(iii) of Notification No. 11/2017-CT (Rate) dated 28/06/2017 read with Notification No. 20/2017-Central Tax (Rate) dated 22/08/2017, as amended from time to time, subject to the provisions of section 14 of the GST Act. - SARTHAK SAXENA, AND JOYJIT BANIK, MEMBER Applicant s Representative Heard : Mr.Tushar Bhartia, Authorized Representative Preamble A person within the ambit of Section 100 (1) of the Central Goods and Services Tax Act, 2017 or West Bengal Goods and Services Tax Act, 2017 (hereinafter collectively called the GST Act ), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Tax Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned in the proviso to Section 100 (2) of the GST Act. Every such appeal shall be filed in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a notification issued under the provisions of this Act. 1.7 The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act. 1.8 The application is, therefore, admitted. 2. Submission of the Applicant 2.1 The applicant M/s KSB Limited, is engaged in the business of manufacturing selling pumps for various applications. They also provide services in relation to installation, commissioning, repair maintenance of such pumps. Their manufacturing facility is located in Maharashtra Tamil Nadu, and they have warehouses at different states, including West Bengal, from where they make the supply to their customers. 2.2 This instant case arises out of the supply being made to Kolkata Municipal Corporation (KMC), on the basis of their tender submitted on 9th December 2019, which mentions the work as: '... Manufacture, supply and installation of two nos. 240 cusec (480 m3/min) at 3 m head axial flow column type submersible pump motor units in place of poor performing old pump at Palmer Bridge Drainage Pumping station and at Ballygunge Drainage Pumping station under KMC. ... The applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er concerned from the revenue has not expressed any view in this regard. 4. Observations Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorised representative of the applicant during the course of personal hearing. The applicant has filed this application seeking an advance ruling in respect of applicability of serial number 3(iii) of the Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017 read with Notification No. 20/2017-Central Tax (Rate) dated 22nd August 2017. For the sake of convenience, the said entry, as amended from time to time, is reproduced below: Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 3 Heading 9954 (Construction services) (iii) Composite supply of works contract as defined in clause (119) of section 2 of the West Bengal Goods and Services Tax Act, 2017, supplied to the Government, a local authority or a Governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, (a) a historical monument, archaeological site or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2 In this case, the essential questions to be examined are: i. whether the transaction is in the nature of a works contract ; and ii. whether the supply is being made to a local authority as defined under Section 2(69) of the GST Act, 2017;and iii. whether the supply is for the purpose of sewerage treatment or disposal ;and iv. Applicability of the entry 3(iii) of the Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017 read with Notification No. 20/2017-Central Tax (Rate) dated 22th August 2017 in this case. Works contract service: 4.3.1 Section 2(119) of the GST Act defines works contract as: works contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract; As per the aforesaid definition, the essential feature for a service to be a works contract service is that whether the service is in relation to an immovable property or not. Consequently, it needs to be examined whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the object or intention of annexation is the pertinent test to determine whether something is for permanent beneficial enjoyment . Further, para. 28 also implies that this would be determined on the basis of the circumstances of each case . In view of the same, the facts of this case have to be examined to determine that whether the installation of pump could be classified as immovable property and consequential actions would follow. 4.3.5 This description shows that the tender is floated for the purpose of replacing the earlier pump on account of performance issues and installation of a new submersible pump by the applicant. The pump would be fastened to the civil structure by way of nuts, bolts and fastenings. The civil structure in this case is a sewerage pumping station under KMC, the very purpose of which is pumping of sewerage for further treatment disposal. The pump is essential to this activity and is thus expected to be installed and fastened at its place of installation throughout its operational life, and is thus installed for the permanent beneficial enjoyment of the civil structure to which it is attached to. Thus, in light of the facts of the case, the pump on insta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Municipal Corporation for a larger urban area, Further, Section 4 of the Kolkata Municipal Corporation Act, 1980 states that-: 4 (1) With effect from such date as the State Government may, by notification, appoint, there shall be a Corporation charged with the municipal government of Kolkata, to be known as the Kolkata Municipal Corporation. 4.4.2 Thus, we find that Kolkata Municipal Corporation (KMC) is a Municipality constituted under Article 243P of the Constitution; KMC is a local authority, as defined under Section 2(69) of the GST Act. The Notification would thus apply to this case, subject to other conditions being fulfilled. Purpose of sewerage disposal: 4.5.1 The tender is issued by the Sewerage and Drainage (S D) department of the KMC. The tender document itself states that the supply is in the nature of replacing the poor performing old pumps at the Palmer Bridge Drainage Pumping station and at the Ballygunge Drainage Pumping station. The applicant has also submitted the copy of the tender document issued by KMC, the catalogue of the submersible pump which is to be installed, pictures of the old and new pumps from the site of installation, for better understanding of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been made after the change in rate of tax. The determination of time of supply would be on the basis of supply of service, issuance of invoice and receipt of payment. 4.6.4 The applicant has not submitted any particulars regarding the extent of payment made by KMC against these two invoices, as submitted. No details have also been submitted regarding the extent of supply which has been made by the applicant to KMC under this works contract and nor have any details been made available regarding the mutual agreement between the applicant and KMC to the extent of supply which has been completed till 17th July 2022 after which the rate of tax has been changed. We are therefore unable to ascertain the time of supply as per the facts of the case. In view of the above discussions, we rule as under: RULING The instant supply qualifies as a composite supply of works contract as defined in clause (119) of section 2 of the GST Act made to a local authority by way of erection, installation, and maintenance of a sewerage treatment plant and would be taxable at the rate specified in serial number 3(iii) of Notification No. 11/2017-CT (Rate) dated 28/06/2017 read with Notification No. 20/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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