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TMI Blog2024 (2) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... est Bengal Authority for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant submits that being a 100% Export Oriented Unit registered with Software Technology Park of India, Kolkata, it provides ITes services to its clients located in USA. The applicant, as a sub lessee, has entered into a 'Sub Lease Deed' with M/s Bengal Intelligent Parks Private Limited (hereinafter referred to as, BIPPL) whereby the sub lessor grants the applicant to use a specified area on the 11th floor in the Building Omega of Bengal Intelligent Park, Block EP & GP, Sector V, Salt lake to conduct busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be treated as a mixed supply on the ground that "there is purely supply of services and no supply of goods". The applicant argues that the instant supply would be classified as "leasing or rental services concerning office machinery and equipment (except computers) with or without operator" under SAC 997314 and therefore would attract tax @ 18%. 1.8 In terms of clause (a) of section 95 of the GST Act, an advance ruling means a decision provided by this authority or the appellate authority, as the case may be, on matters or any questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 of the GST Act in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. In the instant case, the question on which the applicant seeks an advance ruling is not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant rather it is found to be in relation to supply being received by the applicant. 1.9 Further, sub-section (1) of section 103 of the GST Act categorically speaks that the ruling pronounced is binding only on the applicant and on the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also been stated that BIPPL has made arrangements with TCGUIH to provide assets and fit outs on hire to the licensees and sub-lessees of the building including the said sub-leased space. 1.12 The applicant has also entered into an agreement with TCGUIH to avail facilities and services installed in the building as well as sub-leased space. It has been informed that inside the building, there is a central air conditioning plant in order to provide air conditioning facilities and supply of cooling air to each floor through installed Air Handling Unit (AHU) Duct systems. Also, there is common DG set in order to provide emergency power back up for each floor. There are also fit outs, assets like electrical equipment, fire extinguishing sprinkler system etc. installed to provide required facilities and services through such assets to the said sub-leased space. The applicants have no control/title over the said fit outs and assets, but have the right to use the facilities and services of such fit outs, fixed assets and services on payment of agreed rate as hire charges. 1.13 As per the agreement between TCGUIH and the applicant, the legal possession of the assets shall be with TCGUI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as submissions made by the authorised representatives of the applicant during the course of personal hearing. In this context, it is to be mentioned that the officer concerned from the revenue has not expressed any view on the issue raised by the applicant. The applicant contends that the supply received by him from TCGUIH is neither a composite supply nor a mixed supply and would be taxable @ 18% being supply of "leasing or rental services concerning office machinery and equipment (except computers) with or without operator" under SAC 997314. 1.18 Rate of tax of leasing or rental services under Heading 9973 has been specified in serial number 17 of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (corresponding West Bengal State Notification No. 1135 F.T. dated 28.06.2017), as amended from time to time. As on date, the said entry reads as under: Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 17 Heading 9973 (Leasing or rental services, without operator) (i) omitted (ii) Temporary or permanent transfer or permitting the use or enjoyment of Intellectual Property (IP) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, we need to examine whether the supply involves following characteristics: (1) that the supply is consisting of two or more individual supplies of goods or services, or any combination thereof; (2) that such different supplies are made in conjunction with each other for a single price; (3) that the supply does not constitute a composite supply. We have already expressed our view that the instant supply does not constitute a composite supply. Further, the supplies are made for a single price. Furthermore, in the instant case, we find that two or more individual supplies, independent of each other, are supplied in conjunction with each other out of which any particular supply does not bear the predominant element. In other way, the supply is a combination of two or more individual supplies without any principal supply against a single price. We are of the view that all the conditions specified in clause (74) of section 2 of the GST Act get satisfied in respect of the instant supply and we, therefore, hold the supply to be a mixed supply. 1.21 Tax liability on composite supply and mixed supply has been laid down in section 8 of the GST Act. As we have held the supply to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then the whole falls to be classified in the heading appropriate to that function. 5. For the purposes of these Notes, the expression "machine" means any machine, machinery, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85. 1.23 It thus appears that hiring of air conditioning machine and fire extinguisher would attract tax @ 28% and @ 18% respectively being the same rate applicable for supply of such items and when such are supplied in conjunction with each other for a single price, the supply being a mixed supply would attract tax @ 28%. However, in the instant case, we are of the view that air conditioning system and the fire extinguishing systems which have been installed in the building have lost its character of a movable property and thereby cannot be regarded as goods. 1.24 In Solid and Correct Engineering Works [2010 (252) E.L.T. 481 (S.C.)], the Hon'ble Supreme Court of India observed that attachment of the plant in question with the help of nuts and bolts to a foundation intended to provide stability to the working of the plant and prevent vibration/wobble free operation does not qualify for being described as attached to the earth. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver the evaporator coil. Low pressure and the temperature refrigerant passing through evaporator coil absorb heat from the air. Thus the air gets cooled. 15.6 As the construction of central air conditioning plant via a works contract services as pointed out above, makes it an immovable property, it ceases to be a plant and machinery. 19.3 In the present case too we find that there is an intention to install the "Fire Safety Extinguishers' permanently to the building. The Fire Safety Extinguishers once fitted, no longer remains movable goods as it gets assimilated in a permanent structure i.e., the administrative building of the appellant'. 1.27 In the light of foregoing discussions, we are of the opinion that in the instant case, rate of tax on supply of hiring services of air conditioning system and fire extinguishing system would not be determined vide serial number 17(iii) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. According to our view, each of the supplies would attract tax @ 18% under serial number 17(viii) of the said notification as leasing or rental services and therefore, the supply received by the applicant from TCGUIH, being a mixed supply, wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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