In Re: M/s. R. Vidyasagar Rao Constructions (RVRC)
GST
2018 (12) TMI 1228 – APPELLATE AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – 2019 (20) G. S. T. L. 737 (App. A. A. R. – GST), [2019] 65 G S.T.R. 184 (AAR)
APPELLATE AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – AAAR
Dated:- 4-9-2018
AAAR/02/2018 (A. R. ) A. R. Reference-No. AAAR/01/2018
GST
SHRI V. ANIL KUMAR AND BANKEY BEHARI AGARWAL MEMBER
A.R. Reference-No. AAAR/01/2018 Dated: 04 September, 2018
ORDER-IN-APPEAL NO. AAAR/02/2018 (A.R)
(Passed by Telangana State Appellate Authority for Advance Ruling under Section 101 (1) of the Telangana Goods and Services Tax Act, 2017)
Preamble
1. In terms of Section 102 of the Telangana Goods & Services Tax Act, 2017 (“the Act”, in short), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate authority on its own accord, or is brought to its notice by
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ed by it under sub-Section (1 ) of Section 1 01 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made.
* * * * *
1. The subject reference has been made by the Telangana State Authority for Advance Ruling (Goods & Service Tax) (“TSAAR” or “Authority” or “lower authority”, in short) to this Appellate Authority in terms of Section 98(5) of the Telangana Goods and Services Tax Act, 2017 (hereinafter referred to as “TGST Act, 201 7” or “the Act”, in short) with regard to an application for Advance Ruling filed by M/s. R. Vidyasagar Rao Constructions, Plot No.98 & 99, Lumbini Layout, near Euro School, Gachibowli, Hyderabad – 36 having GSTIN No. 36AAGFR6627L1ZQ1 – hereinafter referred to as “M/s. RVRC” or “the applicant”.
2.1. Vide
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application filed by M/S. R. Vidyasagar Rao Constructions, Plot No. 98 & 99, Lumbini Layout, near Euro School, Gachibowli, Hyderabad – 36 (GSTIN No. 36AAGFR6627L12Q) is being referred to the Appellate Authority for Advance Ruling for the state of Telangana in terms of Section 98 (5) of the CGST Act, 2017 for hearing and decision on the question on which the advance ruling is sought”
Brief Facts of the case:
3.1. M/s. RVRC is a registered partnership firm dealing in mining business. They had entered into Agreement (Ref.No. Contract Agreement No.08-TSMDC/DamerakuntaIll/Annaram. Sand/Legal/2017) dated 1 8th March, 2017 (“Agreement” / “Contract” in short) with M/s. TeIangana State Mineral Development Corporation, Hyderabad (“TSMDC” or “service recipient” in short), pursuant to TSMDC's acceptance of the tender submitted by M/s.RVRC in response to TSMDC's Tender / Short E-procurement Tender No.TSMDC / SAND / EXC / Damerakunta-III / Annaram / 2016 dated 29-12-201 6 (“Tender” / “Tender docum
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plication (i.e., Statement containing applicant's interpretation), M/s. RVRC claimed that:
(i) the above activity/services rendered would fit into the ambit of 'Works contract' as defined under sub-Section (119) of Section 2 of the GST Acts further read with Sl.No. 6(a) of Schedule II to the GST Acts; and that the same Would be eligible for the benefit of CGST 2.5% + SGST 2.5% = total 5% rate of tax in terms of Notification No. 31/201 7-Central Tax (Rate) dated 31-10-201 7 (and G.O. Ms. No. 253, Revenue (CT-II) Department dated 23-1 1-2017); or
(ii) Alternatively, the activity amounts to 'composite services' in which the transportation part is predominant and therefore also the rate would be 5% GST (2.5% CGST + 2.5% SGST), as per the entry 'transportation of goods''3.
3.3. After examining the issue and analysing the terms of the Agreement / Tender documents and the scope of work involved vis-d-vis statutory provisions and Notification-entries, the two Members constituting the Advanc
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5 (Goods transport services) in Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017.
(iii) The services supplied by the applicant is a 'composite supply' as defined in clause (30) of Section 2 of the CGST Act. Out of the three components of the services involved viz., (1) excavation of sand, (2) transportation of the excavated sand from the submergence area to the identified stockyard and (3) loading of the sand into lorries at the stockyard; which are naturally bundled, the principal supply is that of 'excavation of sand'; the services of transportation and loading are ancillary to the said service of 'excavation of sand'. Hence, that the services rendered by the applicant are classifiable as “Excavating and Earthmoving Services” under Heading 995433 of GST Tariff and rate of tax applicable is 9% CGST + 9% SGST.
3.3.2. Summary of Opinion expressed by the State Member:-.
(i) Though a part of the contract i.e, construction of ramps/roads and their maintenance falls under work
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ansporting by vessel” and GST tariff and rate of tax applicable is 2.5% CGST + 2.5% SGST subject to the condition that the applicant is not entitled to ITC (input tax credit) to the extent mentioned in the proviso in Column (5) of (v) entry as mentioned above as per the GO Ms. No. 1 10 Revenue (CT-II) Department dated 29-6-2017.
3.4. Thus, no uniform opinion was arrived at by Members of the lower Authority on the question framed for Advance Ruling. Accordingly, they referred the matter to this Appellate Authority in terms of Section 98 (5) of the Act by framing the reference, as reproduced in para 2.2 of this Order.
4. Section 98 (5) of the Act stipulates that:
“Where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question”.
Sub-section (1) of Section 101 of the Act specifies that :
“The Appellate A
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consisted in the opinion rendered by the Hon'ble Central Member of the Authority for Advance Ruling apart from the submissions of the understanding about the whole issue by the applicant.
c. The facts in the contract that the applicant entered into with Telangana State Mineral Development Corporation Ltd (TSMDC) may please be ascertained from the Short Tender Document dated 29-12-2016 and also from the Agreement dated 18-03-2018.
d. The above documents makes it clear that the following supplies are involved in the activity being rendered by the applicant:
i) Formation of internal ramps and roads and their maintenance i.e. from the outer place of the river to the places where the sand is stagnated in order that the applicant first reaches to the later place by its vehicles viz. bulk containers.
ii) Culling out the Sand from the places where it is stagnated, loading into the above containers.
iii) Transporting the above loaded Sand to the places chosen by the TSMDC, unloading the
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o.31/2017 dt.13.10.2017 issued in G.O.Ms.N0.253 Revenue (CT-II) Dept dated 23.11.2017 the rate oftax is to be 2.5% CGST AND 2.5% SGST.
The alternative urge of the applicant and its understanding is the object of the contract being to replace the sandfrom one place to another which could be done by moving it from it's place of source to the Stockyard, which could only be done by the mode of transportation of it from such place to such place as the case may be the principal supply is 'Transportation of Goods ' and other activities are incidental to such supply. In this event the applicant made a search to accommodate itself in the notified rates of tax, as after exhausting the same only by all possible means it can satisfy himself that this supply would fall under residual entry of tax. When done so, the applicant opines his activity can be and be subjected to tax under Sl.No.9 / Heading No. 9965 i.e. Goods Transport Service-(ii) Transport of goods in a vessel. Vide Notification No. 11/
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g bulk carriers and tankers. Therefore, 'vessel' includes bulk carriers and tankers. The word s 'other than ships' also carries much significance to give a meaning that 'Vessel' includes goods other than ships.
Submissions of the applicant on the opinion rendered by Hon'ble Central Member:
1. The observation made by the Hon'ble Central Member that the contract consist three parts only [(1), (11) & (111) i.e. excavation of sand, transportation of the excavated sand from the submergence area to the identified stock yard and loading of sand into the lorries at the stock yard] is misconstrued. In fact, the tender document Dt. 29-12-2016 reads at it's page 8 makes it clear that Rs. 7.50 out of rupees upset price of Rs. 100 is assigned for formation of rams and roads. These rams and roads are two kinds as already mentioned above. The activity of formation and maintenance of rams, internal and external roads are therefore one among the constituents parts of the contract.
2. As the applican
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d from stock yard to nearby connectivity road for plying of lorries/vehicles and any incidental expenditure incurred and involved thereon for laying and maintenance of roads shall be borne by the contractor. This expenditure is necessarily to be met by the contractor from out of the 7.5% of the Rs. 74.36 and hence these supplies are constituent part of the contract.
5. The view point of the Hon'ble Central Member that the main work in the contact involved is excavation, transport and again loading to other lorries and the laying of the ramps, roads etc. is incidental is not correct. The main object in the contract is to shift the sand from one place to another by way of transportation of it, the applicant submits.
6. The view expressed by both the members that the contract of the applicant is composite supply falling under Sec.2 (30) of the CGST Act, is not being objected by the applicant as the applicant also made a submission that it is as such before the Authority for Advance ruli
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e sand from excavated from the submerged areas to nearby stock yard is incidental to transport of sand excavated. Thus, the Hon'ble Central Member pleased to identify principal supply is 'excavation of sand' and it has ancillary supplies other than formation of ramps and roads, there is one more supply i.e. transportation which he holds ancillary to the 'excavation of Sand' and such ancillary supply of 'transportation' in turn carries an ancillary supply viz. 'formation of ramps and roads'. Thus, the view point of the Hon'ble Central Member amounting to identification of more than one principal supply in a single composite contract, which is not possible as per law.
10. The Hon'ble Central Member thus deals with only about formation of internal roads, ignored the formation and maintenance of external roads besides on one count the central member opined such roads and rams and maintenance not at all integrated to the contract and on other count such formation of roads and rams are inci
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aspect also the opinion rendered by the central is self-contrary i.e. on one count, by placing reliance on the definition of 'Vessel' under Major Port Trust Act, 1963(dehorse the applicability of such a definition under the provisions of the GST Acts, for the reasons which are mentioned in the foregoing paragraphs) the Central Member while stating vessel is exclusively ship/large boat used for the transportation of goods by sea/in land waters and on the other count gives contrary opinion that the enumeration in the notification is not qua the goods and it is qua 'mode of transportation'. This may kindly be looked into.
13. When the word 'Vessel' is not defined under the Act, it's meaning is to be considered in general and meaning of it can't be borrowed unless mandated under the Act to be done so. In the following words GST Act mandates meaning of certain words from the other Acts.
a. “actionable claim” shall have the same meaning as assigned to it in section 3 of the transfer of P
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ble Member about contract not being amounting to a 'works contract' may be examined as per the law.
b. The applicant accepts the opinion of the Hon'ble Member about the contract being fallen under Sl.No.9/Heading No.9965 (ii) of Notification No.11/2017 dated 28-06- 2017 and hence liable to GST at the rates of 2.5% CGST and 2.5% SGST
Ultimately the applicant submits that in respect of Indirect Taxation, resorting to residual entry taxing shall be ultimate resort i.e. after exhausting all the possible modes to accommodate the taxable event in the lesser rate of enumerated entries”.
6.2. During the hearing before the Appellate Authority, the Advocate explained his case with reference to the above written submissions and the points which came up during the course of discussions and pleadings were recorded, are reproduced below:.
“…
1. He agrees that the composite/ aggregate price ofRs.74.36 as per page 3 of the agreement dated 18th March, 2017 does not have any breakup stated there
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contract, and therefore the submission made at Sl. No. (a) at the end of his written submissions filed today may be taken to be deleted.
4. He next explained that on going through the nature of the various component activities as mentioned on page 8 of the tender document, and as explained in their written submission, it is their claim that the component activity of transportation should be considered to be the principal supply and therefore it is their claim that in terms of the relevant provisions of GST Law, the entire composite supply deserves to be treated as principal supply, namely transportation of goods.
5. He therefore claims the benefit of Central Tax (Rate) Notification No. 11/2017 (para 27 of the lower authority order refers) and claims that there are five sub-entries in this notification column No.3 and he does not fall in the entries at (i), (iii) and (iv). It is his contention that he falls in the entry (ii) and therefore does not fall in the residual entry at (v).
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lauses Act should be referred to. He referred to the definition of the term 'vessel' as given under Section 3 sub-Section 63 of the General Clauses Act, 1897, as per which 'vessel' shall include any ship or boat or any other description of vessel used in navigation and therefore contended that since the definition under the said Act is only an inclusive definition, therefore the term 'vessel' is not required to be restricted to something that floats; the same meaning is given in the Law Lexicon also. He referred to Page No. 1955 from the Law Lexicon compiled by Sri P. Ramanatha Aiyar, 2nd Edition, Re-print 2010 and submitted a photocopy of the said pages 1955 & 1956. The Bench also referred the page No. 1951 and 1952 of the same Law Lexicon as produced by the learned advocate wherein the term 'vehicle' is defined and took a copy of that.
8. He next referred to para 33 and 34 of the finding by the State Member in the lower authority and contended that he supports that finding in suppor
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r hearing and decision on the question on which the advance ruling was sought” The point(s) on which the Members have differed, though are reflected within the reference-order. We further observe that Section 101 (1) of the Act mandates this Appellate Authority to 'pass such order as it thinks fit, confirming or modifying the ruling appealed against or referred to'. We also take note that various provisions under Chapter XVII of the Act dealing with “Advance Ruling” i.e, sub-Section (4) of Section 101, Section 103 (1) or Section 104 (1), inter-alia, refer to 'advance ruling pronounced by Appellate Authority', which envisages pronouncement of the Advance Ruling by this Appellate Authority after addressing the points of difference/reference in such situations.
8.1.2. The applicant vide the initial application and also in their submissions before the lower Authority, had claimed that their services fall under the ambit of 'works contract', as defined under Section 19) of the Act. As seen
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upply”.
8.1.4. However, the two Members have differed in their opinions on the following points:
(i) The Central Member held that in the aforesaid 'composite supply' provided by applicant, the 'principal supply' is 'excavation of sand' and hence, the same is classifiable as “Excavating and Earthmoving services” under Heading 995433 of GST Tariff and rate of tax applicable is 9% CGST + 9% SGST.
(ii) The Central Member further held that the entry 'Transport of goods in a vessel' [appearing at sub-category (ii) under Column (3) against entry Sl.No.9 in the Table given under Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017] is not applicable to the instant case, as the vehicles used for transportation of sand are by road and not covered under 'vessel' which as per definition of 'vessel' in Section 2(z) of the Major Port Trusts Act, 1963 includes only transport conveyances by water like ships, barges, boats, tankers etc.
As against the above,
(iii) The State Member held that
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held as a “composite supply” by both the Members], the 'principal supply' is that of 'excavation of sand' as held by the Central Member or 'transportation of goods i.e., sand' as held by the State Member ?
What is the classification of the “principal supply” determined under (i) above (which would thereby be the classification of the “composite supply”) ?
(iii) If the principal supply is determined to be “transport of goods”, then whether the vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are to be considered as covered by the term 'vessel' appearing in the Notification-entry as held by the State Member or as not covered by the said term as held by the Central Member ?
(iv) What is the applicable rate of tax on the consideration received by the applicant for the impugned services consequent to determination of (ii) and (iii) above ?
9.1. For the purpose of determination of the above questions, first t
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“8. Tax liability on composite and mixed supplies. – The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:-
(a) a composite 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) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax”.
9.2. Notification No. 1 1/201 7-Central Tax (Rate) dated 28-6-2017 issued under Section 9 of the Act provides for the levy of GST on intra-State supply of services. The Notification prescribes the rates of the tax applicable to various services and also provides for a Scheme of Classification of services, as given in Annexure to the Notification. The relevant entries in the Notification are reproduced and referred at the appropriate places in the further course of our discussions.
10.1. Coming to the services involved in the case,
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also the Tender document viz., Short Tender/ E-procurement Tender dated 29-12-2016:
(i) In page 4 of the Agreement, clause 2 reads as follows:
“2. The following documents issued for the above work shall be deemed to form part and parcel of this agreement and the same may be read and construed as part of this agreement viz.,
(a) Conditions of contract,
(b) Contractor's bid,
(c) Priced Bill of quantities,
(d) Letter of intent or work order,
(e) Agreement. All terms & conditions, al clauses of tender document and all other conditions as mentioned in the above documents have been agreed to by the parties and the same are binding on both the parties”.
However, the applicant had submitted copies of only the Agreement dated 18-32017, Tender / Short E-procurement tender notice dated 29-12-2016 and the Letter of intent dated 27-1-201 7 issued by TSMDC for the purpose of the subject proceedings.
(ii) The Short Tender / E-procurement tender dated 29-12-2016 issued by TSMDC conta
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'Conditions of contract', subclause (ix) (appearing on the 8th page) reads as under:
“ix) Laying of Roads:
It is the sole responsibility of the Contractor to lay / form required road from stockyard to nearby connectivity road for plying of Lorries / vehicles, any incidental expenditure incurred and involved thereon for laying & maintenance of roads shall be borne by the Contractor”.
From the above, it appears that there can be no dispute that the impugned include the element of formation/maintenance of roads apart from those of excavation, loading, transport etc., mentioned in the “Scope of Work”.
(iv) Clause 3(vii) of the Agreement, inter-alia, specifies Contractor's possession and deployment of a minimum (numbers) of equipment viz., 8 No.s Excavators, 2 No.s Mobile Water Tankers and 32 No.s Tractors / Tippers.
(v) Clauses 3 (viii), (x) of the Agreement stipulate respectively, that Contractor shall (a) obtain necessary licenses, permits etc., as required under Telangana State Sa
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ount payable to the Sand Raising Contractor shall be as per rates quoted by him / them and shall be finalised by TSMDC, based on transit pass (in CBM), which shall be issued at Stockyard on Sand despatches made by TSMDC..”.
11. Keeping in view the above detailed aspects, we proceed to determine the questions before us, as stated earlier.
12.1. Whether, in the services provided by the applicant under the Agreement with TSMDC [which has been held as a “composite supply” by both the Members], the 'principal supply' is that of 'excavation of sand' as held by the Central Member or 'transportation of goods i.e., sand' as held by the State Member ?
12.2. As per the statutory definition, 'principal supply' in a composite supply would be that which constitutes predominant element and to which other supplies forming part of composite supply are ancillary. The words/phrase 'predominant element' are neither defined in the Act nor any parameters such as quantum, value etc., specified for determi
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development of mineral resources including Exploration, exploitation and beneficiation6. Sand, undisputedly, being a mineral resource the same belongs to the State of Telangana; TSMDC is the State-instrumentality which is entrusted with the objectives as above.
(ii) The Agreement and the earlier Tender floated by TSMDC, in essence, aims for removal of sand located in the specified area (Submergence Area / Reach) and shifting the same to another area, termed as Stockyard @ approx.. 1 km distance from the Submergence area.
(iii) The said shifting and removal is to be done using Excavators and loading on to tippers/tractors or lorries/trucks as the case may be, which transport the sand by the ramps / roads to the said Stockyard.
(iv) At the Stockyard (for which TSMDC has to obtain Mineral Dealer License and also pay lease rentals), the sand is again loaded into lorries -which is for further onward despatch as per the Contractee-TSMDC's requirements.
(v) The Agreement also requires the
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h by TSMDC. The said activity i.e., transport of sand from one place to another therefore constitutes the predominant element in the instant case; the other activities of excavation (or extraction as also mentioned in Agreement), loading, unloading and reloading as also formation / maintenance of ramps/roads, are the incidental or ancillary activities, preceding, coinciding or following the said main activity of 'transportation from one place to another'. The breakup of the Upset Price as per the TSMDC's Tender documents, referred at para 10.2 (ii) above, also shows that the activity of transportation and the loading activities which are directly related to the transport, is the predominant portion in impugned services; incidentally there is no separate /specific mention of any value/rate for only 'excavation' activity in the said Upset price.
12.5. In the lower Authority's reference, the Central Member's reasoning was that 'without excavation of sand, transportation and loading of sa
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not 'excavation of sand' as held by the Central Member.
14.1. The second question for determination is What is the classification of the “principal supply” determined under (i) above which would thereby be the classification of the “composite supply” as held by the lower Authority ?
14.2. As determined above, the 'principal supply' in the instant case is that of transportation of goods i.e., sand. It is an urn-disputed fact and also explicitly recorded in the Agreement and tender documents that the said transport is by road only. The Scheme of Classification of services is laid down in the Annexure to the Notification No. 1 1/201 7-Central Tax (Rate) dated 28-6-201 7 which contains the entries pertaining to Land transport services. The relevant extracts from the said Notification are as follows:
“Rate of GST on intra-State supply of specific services with Service Code Tariff (SAC):
In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, s
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“ANNEXURE : SCHEME OF CLASSIFICATION OF SERVICES
S.No.
Chapter,
Section, Heading or Group
Service
Code
(Tariff)
Service Description
107
Heading 9965
Goods Transport Services
108
Group 99651
Land transport services of Goods
109
996511
Road transport services of Goods including letters, parcels, live animals, household and office furniture, containers and the like by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles
110
996512
Railway transport services of Goods including letters, parcels, live animals, household and office furniture, intermodal containers, bulk cargo and the like
111
996513
Transport services of petroleum and natural gas, water, sewerage and other goods via pipeline
112
996519
Other land transport services of goods nowhere else classified
14.3. From the above, it can be seen that the broad category of Goods Transport services are classified with a 4-digit
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ervices are covered by the Service Code 996511, the application of residuary entry i.e, Service Code 996519 does not arise.
14.5. On the aforesaid basis, we therefore hold that the classification of the services rendered by the applicant which have been held to be “composite supply” and in which the principal supply is found to be 'transport of goods by road' are correctly classifiable under the Service Code (Tariff) 996511 under the Scheme of Classification of services laid down in Annexure to Notification No. 1 1/201 7- Central Tax (Rate) dated 28-6-2017.
15.1. In view of the above determination of the classification of impugned services as “transport of goods”, the next question for determination is “. whether the vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are to be considered as covered by the term 'vessel' appearing in the Notification-entry as held by the State Member or as not covered by the t
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ncluding used household goods for personal use).
Explanation. “goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.
2.5
Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no.
(iv)]
(iv) Transport of goods in containers by rail by any person other than Indian Railways.
6
(v) Goods transport services other than (i), (ii), (iii) and (iv) above.
9
15.3. The applicant's claim is that their activities, as a composite supply with principal supply of 'transportation of goods/sand', would be covered by the category “Transport of goods in a vessel” (appearing at sub-category (ii) under Column (3) in the entry at Sl.No.9 in the Table to the said Notification – hereinafter referred as 'impugned entry'). The differing views expressed by Members of lo
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d a caisson”.
The Central Member opined that 'vessel' in the impugned entry denotes those for transport of goods by sea / inland waters and the said term cannot be considered as 'container' as claimed by applicant.
(iii) The State Member referred to the proviso under Column (5) against the impugned entry, which reads as follows:
“Provided that credit of input tax charged on goods (other than on ships, vessels including bulk carriers and tankers) used in supplying the service has not been taken”
Accordingly, inferred that the term 'vessel' has been used in the proviso as including bulk carriers and tankers as also any goods used for transportation of other goods. Hence, the meaning of vessel for the entry would mean any container which contains other goods for movement from one place to other.
(iv) The applicant referred to definition of 'vessel' vide Section 3 (63) of the General Clauses Act, 1897 as also meaning thereof as per Law Lexicon7, which read as follows:
Section 3 (63)
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MPT Act, 1 963 is not supported by the GST-law provisions and hence not correct. They support the finding of State Member in this regard.
15.5. With regard to the above, we find as follows:
(i) The word 'vessel' is not defined in the Notification nor in the Act (nor also in the allied Acts to which reference is made by sub-Section (120)8 of the Act).
(ii) However, the word 'vessel' finds a mention in the Act in the definition of 'conveyance' cited earlier. The said definition shows that 'vessel', apart from 'an aircraft' and 'a vehicle' are included therein as three separate types of conveyances. In other words, in the very same statutory definition of 'conveyance', the words 'vessel' and 'vehicle' have been separately mentioned.
It is a settled principle of legal interpretation that when two expressions are used in a statute they have to be assigned two different meanings and both cannot be construed as having the same meaning. The said principle is enunciated / reflected in a cat
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different expressions in the Explanation to two distinct provisions, this Court cannot presume the effect of both the Explanations to be the same. When two different expressions are used by the same statute, one has to construe these different expressions as carrying different meanings. [Kailash Nath Agarwal v. Pradeshiya Industrial & Investment Corpn. of U.P. Ltd. – (2003) 4 SCC 305] = 2003 (2) TMI 338 – SUPREME COURT OF INDIA. Different use of expressions in two provisions of a statute is for a purpose for, otherwise, the same expression would have been used. [B.R. Enterprises v. State of U.P. – (1999) 9 SCC 700 = AIR 1999 SC 1867 = 1999 (5) TMI 498 – SUPREME COURT OF INDIA]. It would be difficult to maintain that, when two expressions of different import are used in a statute in two consecutive provisions, they are used in the same sense, and the conclusion must follow that the two expressions have different connotations. [Member, Board of Revenue v. Arthur Paul Benthall – AIR 1956
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rvices depicts the Goods Transport Services as follows:
ANNEXURE : SCHEME OF CLASSIFICATION OF SERVICES
S.No.
Chapter, Section, Heading or Group
Service Code (Tariff)
Service Description
(1)
(2)
(3)
(4)
107
Heading 9965
Goods Transport Services
108
Group 99651
Land transport services of Goods
109
996511
Road transport services of Goods including letters, parcels, live animals, household and office furniture, containers and the like by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles
110
996512
Railway transport services of Goods including letters, parcels, live animals, household and office furniture, intermodal containers, bulk cargo and the like
111
996513
Transport services of petroleum and natural gas, water, sewerage and other goods via pipeline
112
996519
Other land transport services of goods nowhere else classified
113
Group 99652
Water transport serv
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rway operation services (excluding cargo handling) such as operation services of ports, docks, light houses, light ships and the like
146
996752
Pilotage and berthing services
147
996753
Vessel salvage and refloating services
(Above are the only entries in the Notification including Annexure wherein the word 'vessel' is used (highlighted above), apart from the impugned entry. The words 'vehicles', 'road vehicles' or 'trucks' are also highlighted for reference).
(iv) From the above, it is seen that the Notification delineating the Scheme of classification of services (apart from prescribing the rates of tax) contains and shows the following distinct aspects:
(1) The word 'vessel' has been used specifically in respect of the category/categories of services pertaining to 'Water transport services of goods' only;
(2) The word 'vessel' has not been used in the context of Land transport services nor the services such as 'rental' services related to Land transport;
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Act and Law Lexicon as also that of 'conveyance' in the Act is an inclusive definition and hence as also by considering a general meaning, the word 'vessel' in the impugned entry would also cover their vehicles -trucks/lorries. We find no merit in the above contentions on various counts, as detailed below:
(i) Firstly, as detailed above, the Notification uses the word 'vessel' specifically and distinctly only in relation to 'water transport'. Hence, there is no scope for treating 'vessel' as covering means of land transport also, merely because of usage of 'includes' in the cited definition / meanings.
(ii) The mention of the word 'includes' in a statutory definition does not envisage that the definition can be expanded beyond any limit to cover all or any items which have no relation whatsoever to the defined word in the given context.
(iii) The reference to external aids of interpretation such as General Clauses Act or Law Lexicon is not at all necessitated, rather obviated in vie
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des bicycles, tricycles, automotor cars and wheeled conveyances used or capable of being used on public street” which relates to road transport. On the other hand, the meanings given to “vessel” in the Law Lexicon, as reproduced earlier, are seen to be invariably with a specific reference to water transport only. It is pertinent to also mention that one of the meanings given in the Lexicon against 'vehicle' reads as “Vehicle could be read to include a boat” (as per a cited case law w.r.t. West Bengal Zilla Parishads Act, 1935). Whereas, in respect of the word “vessel”, there is no meaning or citation given to show the converse i.e, that a vessel would include any vehicle / truck / lorry etc.
(vi) Further, it would be pertinent to mention that during the hearing, the applicant's advocate, in response to our query vis-d-vis the definition of 'conveyance' in the Act, had fairly stated that among the three categories viz., a vessel or an aircraft or a vehicle in the definition, they would
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e trucks/lorries in this case is therefore found to be correct in view of what has been discussed above; though the analysis and reasoning given for the same is seen to be rather cryptic and not comprehensive and further the reference to external aid of another Act i.e, MPTA being not at all warranted, in view of our above discussions.
16. In view of the above, we therefore hold that the vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are not covered by the term 'vessel' appearing in the Notification-entry as held by the Central Member; the contrary opinion expressed by the State Member is found to be not legally correct.
17.1. The last question for our determination is “What is the applicable rate of tax on the consideration received by the applicant for the impugned services consequent to determination of earlier two questions (ii) and (iii) ?
17.2. Vide entry Sl.No. 9 in the Table to Notification No.
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'vessel' is not applicable in view of our discussion and findings in the preceding paragraphs. Hence, the applicable entry in respect of the impugned services would be the entry item Sl.No. (v) above viz., “Goods transport services other than (i), (ii), (iii) and (iv) above” for which the applicable rate of tax is prescribed as 9% CGST (and correspondingly 9 % SGST). Hence, the applicable rate of tax on the impugned services is 9 % CGST + 9 % SGST (aggregating to 18%).
18. In view of the aforesaid discussion and findings, we pronounce the Advance Ruling in respect of the question framed by the applicant in the instant proceedings, as follows:
S.No.
Question framed for Advance ruling
Ruling by this Appellate Authority
A)
The combination of services of excavation of sand including loading with machinery at reach, Formation of Ramps and Maintenance of Roads, Transportation charges for the tractors/tippers of sand from reach to stockyard and Loading cost at sand from stockyard to lo
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ion expressed by the State Member in so far as holding that the 'Transport of goods' is the principal supply in the impugned services, is confirmed.
(ii) The classification of the impugned services is under Service Code (Tariff) 996511 Road Transport of goods.., as per Annexure to the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017.
(iii) The opinion expressed by the Central Member in so far as holding that the term 'vessel' (appearing in item (ii) under Column (3) against entry at Sl.No.9 of the above Notification), is not applicable to the applicant's case, is confirmed.
(iv) The Advance Ruling on the question framed by the applicant is pronounced as specified in para 18 above.
The subject reference is disposed of accordingly.
Notes:-
1. Last three digits incorrectly mentioned as '12Q' in application filed by M/s. RVRC as well as the Reference order passed by the Authority.
2. The vehicles are mentioned as 'tractors/tippers' herein, whereas in t
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