Author: admin_gst

Goods and Services Tax – Started By: – UpendraKumar Diwan – Dated:- 20-2-2018 Last Replied Date:- 21-2-2018 – GST and Capital gain Tax in Joint Dev.Agreement on the share of land owner I had 1500 SQM land,did JDA 2013 with builder in 35% and 65%.The guideline value of land in 2001-02 was 1200/- per SQM.Now the duplexes are ready for possession of my 35% share i.e.the 3 duplex (constructed area of 108.82,120.7,110.5=340.02 SQM)in lue of the whole land.The guideline value are land=22000/- per SQM

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Goods and Services Tax – Started By: – raja raja – Dated:- 20-2-2018 Last Replied Date:- 8-3-2018 – Our company received advance against servicesAdvanced received 9,80,000/-Tds 2% recovered 20,000/- Above case we have to pay gst on 9,80,0000(980000*18/118=149492) or 10,00,000( 1000000*18/118=152543)Please advice me Thanks in advance – Reply By Ganeshan Kalyani – The Reply = on ₹ 10 lacs. – Reply By MARIAPPAN GOVINDARAJAN – The Reply = GST is to be leviable on ₹ 10,00,000/- Reply By Ravikumar muthusamy – The Reply = is GST payable on advance also? – Reply By Ganeshan Kalyani – The Reply = on service- yeson goods – no. – Reply By Ravikumar muthusamy – The Reply = I request reconfirmation of gst liability on advances received for

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yment, attracts Tax, at appropriate rate, the hands of the Supplier (Forward Charge) or Recipient (Reverse Charge) of Goods or Services or both.Notification No. 66/2017-Central Tax dtd. 15.11.2017 for the time being has kept the GST applicability on Advance at Abeyance on Supply of Goods & Services upto 31.03.2018 and accordingly, when Advance Payment is received by the Supplier of Services (where tax is payable under Forward charge) or such Advance Payment is made by the Recipient of Services (where tax is payable under Reverse Charge), Advance payment would Not attract Tax under GST Law, in respect of Supply of Goods or Services. – Reply By rajkumar shukla – The Reply = Yes.post poned but does it apply to services as well? and postpon

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VAT and Sales Tax – TNGST 1959 – Section 3(5) of the Act is a beneficial provision. It provides for concession in tax to encourage industrial activity. It is well settled principle that a taxing provi

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M/s Global Agency Versus The General Manager South Western Railway Gm Office, The Divisional Railway Manager Bangalore Division, The Divisional Environment & House Keeping Manager, The Senior Divisional Finance Manager Bangalore Division, The Director General Goods And Services Tax – 2018 (3) TMI 389 – KARNATAKA HIGH COURT – 2018 (17) G. S. T. L. 197 (Kar.) – Reimbursement of additional burden due to implementation of GST – scope and extent of the contract with railways – Held that: – no cause of action has been arisen to the petitioner-assessee yet in the matter and the present petition has been filed by the petitioner- assessee prematurely against the Respondents not to take any action against them under the newly enacted GST law enforced

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undertake a false declaration arbitrarily. (b) Direct the Respondent Railways to reimburse the additional burden due to implementation of GST which is not part of the original contract of the subject matter to maintain status-quo anti of the contract. (c) Restrain the GST Authorities enforcing any penalities till the writ petition is disposed off to maintain status-quo anti of the contract. 3. Apparently, no cause of action has been arisen to the petitioner-assessee yet in the matter and the present petition has been filed by the petitioner- assessee prematurely against the Respondents not to take any action against them under the newly enacted GST law enforced from 01.07.2017. 4. Unless a cause of action arises to the petitioner-assessee

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GST – States – S.O. No. 10-04/2018-State Tax – Dated:- 20-2-2018 – COMMERCIAL TAXES DEPARTMENT Notification 20th February, 2018 Notification No. 04/2018-State Tax S.O. No. 10 Dated – 20th February, 2018 – In exercise of the powers conferred by section 128 of the Jharkhand Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the State Government, on the recommendations of the Council, hereby waives the amount of late fee payable by any regi

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GST – States – S.O. No. 11-05/2018-State Tax – Dated:- 20-2-2018 – COMMERCIAL TAXES DEPARTMENT Notification 20th February, 2018 Notification No. – 05/2018-State Tax S.O. No. 11 Dated – 20th February, 2018 – In exercise of the powers conferred by section 128 of the Jharkhand Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the State Government, on the recommendations of the Council, hereby waives the amount of late fee payable by any re

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GST – States – S.O. No. 12-06/2018-State Tax – Dated:- 20-2-2018 – COMMERCIAL TAXES DEPARTMENT Notification 20th February, 2018 Notification No. – 06/2018-State Tax S.O. No. 12 Dated – 20th February, 2018 – In exercise of the powers conferred by section 128 of the Jharkhand Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the State Government, on the recommendations of the Council, hereby waives the amount of late fee payable by any re

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GST – States – S.O. No. 13-07/2018-State Tax – Dated:- 20-2-2018 – COMMERCIAL TAXES DEPARTMENT Notification 20th February, 2018 Notification No. – 07/2018-State Tax S.O. No. 13 Dated – 20th February, 2018 – In exercise of the powers conferred by section 128 of the Jharkhand Goods and Services Tax Act, 2017 (12 of 2017) (hereafter in this notification referred to as the said Act), the State Government, on the recommendations of the Council, hereby waives the amount of late fee payable by any re

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GST – States – S.O. No. 14-08/2018-State Tax – Dated:- 20-2-2018 – COMMERCIAL TAXES DEPARTMENT Notification 20th February, 2018 Notification No. – 08/2018-State Tax S.O. No. 14 Dated – 20th February, 2018 – In exercise of the powers conferred by sub-section (6) of section 39 read with section 168 of the Jharkhand Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act) and in supersession of notification No. S.O 137-State Tax, dated the 14th November, 2017, publi

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2018 (3) TMI 1440 – CESTAT NEW DELHI – 2018 (363) E.L.T. 905 (Tri. – Del.) – Concessional rate of duty – appellant has imported components at concessional rate of duty for manufacture of mobile phone and LED/LCD televisions at their factory in Uttarakhand – goods were rejected and cleared them as scrap – Held that: – these components have not been used for manufacture of the finished goods and hence, as per Rule 8 of the 1996 Rules, the demand was raised by the department. The goods were initially consumed and after assembly, tested and found defective, When the goods were not of the quality that can be re-exported so that it gets out of production. There was no provision under which the appellant can claim the benefit – appeal dismissed.

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s at concessional rate of duty under Sl. No.431 of Notification No.12/2012 -Cus dated 17.3.2012. The appellant has used the components in the manufacture of mobile phones. But on testing, it was found that parts were defective. The appellant rejected and cleared them as scrap. The Department claimed that these parts were not utilized, so attract the duty. So, they demanded the duty along with penalty. Being aggrieved, the appellant has filed the present appeal. 3. With this background, we heard Shri Amit Jain and Ms. Nupur Maheshwari, learned advocates for the appellant and Shri R K Majhi, learned DR for the Revenue. 4. Shri Amit Jain, learned advocate submits that the goods which were found defective, against the same, appellant has import

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the defective parts. In the case of Jhunjhunwala Vanaspati Ltd. (supra), some goods were lost in transit and not reached the factory. Thus, the supply was in a less quantity. In the instant case, case is different as goods were neither re-exported nor stolen. 6. On the other hand, Shri Majhi, learned DR supported the impugned order relying on Rule 7 and 7A of the Customs (Import of Goods at Concessional Rate of Duty) Rules, 1996. He also submits that there was no provision to clear the goods as scrap which were not exported. 7. After hearing both the sides, it appears that these components have not been used for manufacture of the finished goods and hence, as per Rule 8 of the 1996 Rules, the demand was raised by the department. The goods w

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2018 (4) TMI 25 – CESTAT MUMBAI – 2018 (12) G. S. T. L. 328 (Tri. – Mumbai) – Refund – relevant date – Whether the period of one year for filing the refund should be taken from the date of receipt of foreign exchange i.e. date of FIRC or from the date of invoice? – Held that: – in case of export of service, the same qualifies as export only when convertible foreign exchange is received – In the present case, the appellant has admittedly filed the refund claim within one year from the receipt of convertible foreign exchange – the relevant date is the date of FIRC and not the date of service.
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Whether the remittance received against the export in Indian rupees will be considered as receipt of convertible foreign exchange for the purpose

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rom the date of receipt of foreign exchange i.e. date of FIRC or from the date of invoice; (ii) Whether the remittance received against the export in Indian rupees will be considered as receipt of convertible foreign exchange for the purpose of qualifying the supply of service as export. 2. Shri D. Shinde, learned Assistant Commissioner (AR) appearing on behalf of the Revenue, reiterates the grounds of appeal. He submits that the export of service should be considered on the basis of invoice. Therefore, the date of export should be taken as date of invoice not from the date of FIRC. As regards the receipt of remittance against the service, he submits that in the present case, undoubtedly the remittance was received in Indian rupees. Therefo

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ndian rupees, he submits that the payment was received through HSBC Bank. In case of even Indian rupees received through foreign bank, the payment is considered as convertible foreign exchange. The identical issue has been dealt in detail in the case of Sun-Area Real Estate Pvt. Ltd. Vs. CST, Mumbai-I – 2015 (39) STR 897 (Tri.-Mumbai). 4. I have carefully considered the submissions made by both the sides and perused the records. I find that in case of export of service, the same qualifies as export only when convertible foreign exchange is received. In the present case, the appellant has admittedly filed the refund claim within one year from the receipt of convertible foreign exchange. Therefore, the relevant date is the date of FIRC and no

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2018 (4) TMI 479 – CESTAT BANGALORE – TMI – 100% EOU – refund claim – rejection on the ground that the refund claim was beyond the time limit of one year – Section 11B of the CEA – Held that: – Larger Bench decision of the Tribunal in the case of CCE&CST, Bangalore Vs. Span Infotech (India) Pvt Ltd. [2018 (2) TMI 946 – CESTAT BANGALORE] has held that in respect of export of services, the relevant date for purposes of deciding the time limit for consideration of refund claims under Rule 5 of the CCR may be taken as the end of the quarter in which the FIRC is received, in cases where the refund claims are filed on a quarterly basis.
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Matter remanded to the original authority to compute the refund from the last day of the quarter in which the FIRCs are received – appeal allowed by way of remand. – ST/COD/20440/2017 in ST/ 21327/2017-SM in ST/21327/2017-SM – 20303/2018 – Dated:- 20-2-2018 – MR. SS GARG, JUDICIAL MEMBER Shri N. Jagadish, Superintendent(AR), For the Appellant Shri Sh

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the refund claim was beyond the time limit of one year in terms of Section 11B of the Central Excise Act. Aggrieved by the said order, the assessee preferred an appeal before the Commissioner(Appeals) who vide the common impugned order disposed of three appeals. 4. Heard the learned AR and the counsel for the assessee. 5. The learned AR submitted that the impugned order is not sustainable in law and is liable to be set aside. He further submitted that for the purpose of Section 1 1B read with Notification No.27/2012-CE, the h date of export of service. On the other hand, the learned counsel for the assessee submitted that the issue involved in the present case stands settled by the recent judgment of the Larger Bench of the Tribunal wherein it has been held that the relevant date for the purpose of Section 1 1B would be the last day of the quarter in which the FIRCs are received in case of export of service. 6. After considering the submissions of both the parties and perusal of mater

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undai Motors [2015(39) STR 984 (AP)]. 12. The related question for consideration is whether the time limit is to be restricted to the date of F/RC or can be considered from the end of the quarter. The Tribunal in the case of Site/ India Ltd. (supra) has observed that the relevant date can be taken as the end of the quarter in which F/RC is received since the refund claim is filed for the quarter. 13. Revenue has expressed the view that relevant date in the case of export of services may be adopted on the same lines as the amendment carried out in the Notification No.27/2012, w.e.f. 01/03/2016. Essentially after this amendment the relevant date is to be considered as the date of receipt of foreign exchange, While this proposition appears attractive, we are also persuaded to keep in view the observations of the Hon'ble Supreme Court in the case of Vatika Township (supra), in which the Constitutional Bench has laid down the guideline that any beneficial amendment to the statute may be

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2018 (4) TMI 665 – CESTAT MUMBAI – TMI – Refund claim – time limitation – relevant date – whether for the purpose of refund claim u/r 5 and Notification issued thereunder, the time period of 1 year for filing the refund should be reckoned from the date of invoice of the export service or from the receipt of convertible foreign exchange?
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Held that: – this Tribunal consistently held that the relevant date for filing the refund is date of receipt of convertible foreign exchange/ FIRC – reliance placed in the case of M/s. Bechtel India Pvt. Ltd. Versus CCE, Delhi [2013 (7) TMI 490 – CESTAT NEW DELHI].
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Appeal dismissed – decided against Revenue. – ST/87596/2017 – A/85458/2018 – Dated:- 20-2-2018 – Shri Ramesh Nair, Member (Judicial)

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2018 (4) TMI 1075 – ALLAHABAD HIGH COURT – TMI – Extension of time period for filing of GST Tran-1 – despite making several efforts on the last date for filing of the application, the electronic system of the respondent no.2 did not respond – Held that: – the respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner – petition disposed off. – Writ Tax No. – 200 of 2018 Dated:- 20-2-2018 – BHARATI SAPRU AND NEERAJ TIWARI, JJ. Counsel For Petitioner: Shri Rishi Raj Kapoor, Advocate Counsel For Respondent: Shri B.K. Singh Raghuvanshi JUDGEMENT

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e credit that it is entitled to by passage of time. In view of the above, the respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. They will also ensure that the petitioner is allowed to pay its taxes on the regular electronic system also which is being maintained for use of the credit likely to be considered for the petitioner. With the aforesaid directions, the writ petition stand disposed of finally. – Case laws – Decisions – Judgements – Orders – Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia.com – T

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2018 (5) TMI 400 – CESTAT MUMBAI – 2018 (363) E.L.T. 1158 (Tri. – Mumbai) – Refund claim – relevant date – whether refund claim under Rule 5 of Cenvat Credit Rules, 2004 is barred by limitation should be reckoned from the date of receipt of foreign exchange as held by the Commissioner (Appeals) or it should be considered from the date of export of service or raising of invoices? – Held that: – issue of limitation is no longer res integara as has been held in various judgements that in case of export of service relevant date for computing the limitation is date of receipt of convertible foreign exchange against the service exported and not from the date of invoice issued for providing the export service.
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Whether the Commissioner (Appeals) is right in holding that the eligible refund amount will not be reduced due to the assessee having utilized part of the cenvat credit balance for payment of service tax on domestic output services during the relevant period? – Held that: – amoun

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sue of admissibility of input service was raised in disposal of the refund claim filed under Rule 5 of the Cenvat Credit Rules. There cannot be two yardsticks i.e. one for allowing the credit and other for deciding the refund and therefore the refund claim cannot be rejected on the ground of admissibility of the input service at the stage of processing of refund claim.
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Appeal dismissed – decided against Revenue. – ST/87882/2017 – A/85850/2018 – Dated:- 20-2-2018 – Shri Ramesh Nair, Member (Judicial) Shri Atul Sharma, Asstt.Commr. (A.R.) for Appellant Shri Prasad Paranjape, Advocate for respondent The Revenue has filed the present appeal raising the following three questions of law: (a)Whether the relevant date for the purpose of deciding whether refund claim under Rule 5 of Cenvat Credit Rules, 2004 is barred by limitation should be reckoned from the date of receipt of foreign exchange as held by the Commissioner (Appeals) or it should be considered from the date of export of ser

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pondent, except for ₹ 1,51,518/-, for which the respondent has not filed appeal. The Revenue is in appeal to the extent the Commissioner (Appeals) has allowed the refund of the respondent. 3. Shri Atul Sharma, Ld. Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the grounds of appeal. 4. Shri Prasad Paranjape the Ld. Counsel appearing on behalf of the respondent submits that as regard limitation in the case of respondent s own group-entities in Appeal No. ST/87435/2017 this Tribunal vide order No. A/85150-85151/2018 held that the computation of limitation in respect of filing the refund claim should be reckoned from the date of receipt of foreign exchange and not from the date of invoices or from the date of export of service, therefore this issue is already settled. 5. As regard the computation of eligible refund. He submits that the refund is to be computed as per the formula provided in Rule 5 of Cenvat Credit Rules,2004. The notification issued unde

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the respondent to utilize opening balance of cenvat credit at the beginning of the relevant period for the payment of their domestic service tax liability. He proposed to consider only that amount of cenvat credit availed during the relevant period after deduction of the amount used for payment of service tax on domestic service tax liability which is contrary to the clear provision under Rule 5 read with notification issued thereunder. Therefore the Commissioner (Appeals) has rightly held in favour of the respondent which deserves to be sustained. 6. As regard the eligibility of certain input services he submits that the Commissioner (Appeals) has rightly examined the eligibility of all the services before him based on the submission made before him in the grounds of appeal and hence allowed the claim of the respondent. He further submits that Revenue has never objected the availment of cenvat credit as no show cause notice was issued for denial of the credit. The issue of inadmissibi

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s date of receipt of convertible foreign exchange against the service exported and not from the date of invoice issued for providing the export service. The Tribunal in their own case passed the following order: 4. We have carefully considered the submissions made by both sides and perused the records. We find that in both the cases, the period involved is after 1.7.2012. Prior to 1.7.2012, the definition of export of service under Rule 5 was as under: – export service means the service which is provided as per provision of Export of Service Rules, 2005 whether the payment is received or not. However, from 1.7.2012, the aforesaid definition of export service under Rule 5 was amended. The amended definition reads as under: – export service means the service which is provided as per Rule 6A of the Service Tax Rules, 1994. Since all the relevant claims are pertaining to the period after 1.7.2012 only the amended definition of export service is applicable. Rule 6A of Service Tax Rules, 199

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and limitations, as may be specified, by the Central Government, by notification.] From the plain reading of the above Rule 6A, it can be seen that as per sub-rule (1) clause (e), the payment for such service should be received by the provider of service in convertible foreign exchange. Therefore, unless and until the payment consideration in convertible foreign exchange against the export of service is received, the export of service is not complete. Accordingly, the relevant date of one year for filing of refund claim should be reckoned from the date of receipt of convertible foreign exchange. Since the department in appeal has raised only the issue of time limit for filing the refund claim, we are not going into any other issue. 5. Accordingly, the impugned order is upheld and Revenue s appeals are dismissed. 8. In view of the above judgements of this Tribunal in the appellant s own group entities case, I hold that refund cannot be denied on the ground of limitation. As regard the i

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e (g) it is crystal clear that amount of refund claimed by the respondent shall not be more than the amount lying in balance at the end of the quarter or at the time of filing of the refund whichever is less. As per the fact narrated by the Ld. Counsel the refund claim amount is lesser, both the amount and cenvat credit balance at the end of the quarter as well as cenvat credit balance at the time of filing the refund and therefore the condition envisaged under clause (g) of para 2 of the notification is scrupulously complied with. It is also observed that in formula given under Rule 5 is relevant which is reproduced below: 5. Refund of CENVAT Credit. – (1)A manufacturer who clears a final product or an intermediate product for export without payment of duty under bond or letter of undertaking, or a service provider who provides an output service which is exported without payment of service tax, shall be allowed refund of CENVAT credit as determined by the following formula subject to

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ices + export services whose provision has been completed for which payment had been received in advance in any period prior to the relevant period – advances received for export services for which the provision of service has not been completed during the relevant period; (E) "Total turnover" means sum total of the value of – (a) all excisable goods cleared during the relevant period including exempted goods, dutiable goods and excisable goods exported; (b) export turnover of services determined in terms of clause (D) of sub-rule (1) above and the value of all other services, during the relevant period; and (c) all inputs removed as such under sub-rule (5) of rule 3 against an invoice, during the period for which the claim is filed. From the above formula, and definition of net cenvat credit, it is clear that only cenvat credit availed on the inputs and inputs services by the manufacturer or the output service provider should be taken as net Cenvat credit . The only amount w

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refore the refund claim cannot be rejected on the ground of admissibility of the input service at the stage of processing of refund claim. This was held by the Tribunal in the following cases : (i) Commissioner of Service Tax, Delhi v. Convergys India Pvt. Ltd. – 2009 (16) S.T.R. 198 (Tri.-Del.) (ii) Morgan Stanley Advantage Services Ltd. Versus Commr. Of S.T., Mumbai-II 2015 (37) S.T.R. 639 (Tri. – Mumbai) Thus, the adjudicating authority was supposed to first decide the issue of admissibility of the input service by way of issue of show cause notice and carry out adjudication thereof then only the refund could have been rejected on this point. But in the facts of the present case without carrying out any adjudication process straight away refund was rejected which is incorrect and illegal. Therefore on this count itself, the Revenue s appeal on the issue of admissibility of the input service does not sustain. As per my above discussion, the appeal of the Revenue is not maintainable.

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Customs – PUBLIC NOTICE No. 28/2018 – Dated:- 20-2-2018 – OFFICE OF THE COMMISSIONER OF CUSTOMS (EXPORT-II) NEW CUSTOM HOUSE, BALLARD ESTATE, MUMBAI – 400001. F. No. S/26-Misc-54 /2017 DBK Date: 20.02.2018 PUBLIC NOTICE No. 28/2018 Sub: FAQs related to IGST Refund. The Government has considered various representations and data related to issues arising from the IGST claims filing and disbursals. 2. In order to bring clarity regarding the same among trade, exporters, association: frequently Aske

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Goods and Services Tax – Started By: – RameshBabu Kari – Dated:- 19-2-2018 Last Replied Date:- 21-2-2018 – Dear Experts,In case of real estate, land owner gives development rights to the developer/builder to develop the land owned by the landowner. The built up area of the complex/apartment shall be shared by the land owner and the builder upon an agreed ratio. In such case, What would be the gst rate applicable on the share of landowner as well as on direct sale of builder to others ? In this

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Goods and Services Tax – GST – By: – Priya Sharma – Dated:- 19-2-2018 Last Replied Date:- 20-2-2018 – Since the Goods and Services Tax has been implemented in India, it has been undergoing various changes and maintenance as per the needs and requirements of the taxpayers of the nation. The GST Council brought to everyone s notice the information about the e-way billing system in India. The government made up the decision to launch and implement the system with full effect in the month of April 2018. But it happened early from the expected date and the whole act came as a shock to most of the businesses throughout the nation. What actually the e-way bill promises? As proposed by the government, the e-way bill curbs the inconvenience of the

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m. All the data is kept on a centralized platform for the access of the concerned authorities and public as well. The GST e-way billing system is built around a structure that compliments the idea of digitalizing the nation and is a way ahead in the future. It is an easy-to-use process with a simplicity that does not take much of an input. The old-fashioned errors and delays in the transportation of the goods can be studied and eliminated with the help of the data generated by the GST e-way billing method. The mandatory changes that the government has been bringing in the India GST bill details has proved to be beneficial for all making the taxation process even much easier. The trail run initiated before the formal implementation of the e-

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le side, couldn t perform to prove so. It turned out to be the biggest blunder of the GST Council so far. Now that the e-way billing system faces a temporary technology backlash, the people who already started to comply with the new rule are now swamped into uncertainty. Although the government will make the process come back in the form in no time by removing the glitches of the process, the assurance of the fact that there would be no more upcoming glitch in the system is feeble. But one point that is crystal clear is that the not even a single counteraction of the process is intended. Everything is a result of the technology that, one way or the other, comes with a glitch. Summary Keeping the strenuous and heartfelt efforts of the govern

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2018 (5) TMI 601 – CESTAT HYDERABAD – TMI – CENVAT credit – appellant had not received the goods of the description mentioned in the duty paying documents of the registered dealers – Held that: – The description given in the registered dealer invoice in the column of manufacturer tallies in the description given in the excise invoice in the registered dealers invoice and the description given in the commercial invoice is in accordance with the purchase order number reflected on all the documents – appellant cannot be put to any further strict proof as to call for the documents received by the dealer from the manufacturer and tally the description mentioned in the invoices raised by the registered dealer etc. – credit allowed.
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Time Limitation – Held that: – even if the records are audited, audit party will confine its findings to the cenvatable invoice and would not go into the documents like inward register and delivery challan and the audit party presumed that CENVAT invoice wo

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d by the registered dealers was different from the description mentioned in the original duty paying documents of the manufacturer coming to a conclusion that appellant had not received the goods of the description mentioned in the duty paying documents of the registered dealers, show cause notice was issued for demand of the amount availed as CENVAT credit with interest and also for imposition of penalties. Appellant contested the show cause notice on merits as well as on limitation. The Adjudicating Authority did not agree with the contentions raised and confirmed the demands with interest and imposed penalties on main appellant as well as the individual on the director. 3. Learned Counsel after taking the Bench through the records submits that appellant places purchase orders for the materials as per the required and procured the same after releasing the purchase orders on the suppliers either manufacturers or registered dealers; the said materials are accepted only if they conform

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se verification where the registered dealer had procured the goods as per the description on manufacturing invoice. He would submit that the following case laws as laid down this proposition of law and which are in favour of the main appellant herein. i. CCE & Service Tax Vs. Juhi Alloys Ltd., [2014 (302) ELT 487 (ALL.)] ii. CCE, Kanpur Vs. Juhi Alloys Ltd., [2013 (296) ELT 533 (Tri. DEL)] iii. CCE & C. Ex, Kanpur Vs. RHL Profiles Pvt. Ltd., [2013 (292) ELT 313 (Tri. DEL)] iv. Luxmi Metal Industries Vs. CCE, Delhi [2013 (287) ELT 487 (Tri. DEL)] v. Transpek Industries Ltd., Vs. CCE, Vadodara [2010 (249) ELT 91 (Tri. AHMD)] vi. Elveety Industries Pvt. Ltd., Vs. CCE, Bangalore [2001 (130) ELT 199 (Tri. Chennai)] vii. CCE, Jaipur Vs. Unichem Trading Co Pvt. Ltd., [1998 (102) ELT 284 (Tri.)] It is his submission that the demands are hit by limitation as audit parties are fortified the records regularly and the same documents were produced before them; no objections were raised by t

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ed dealer, there is a correlation between the goods ordered, delivery challan, commercial invoices and the first stage registered dealer invoice conforms of mentioning the purchase orders and the invoice numbers. The description given in the registered dealer invoice in the column of manufacturer tallies in the description given in the excise invoice in the registered dealers invoice and the description given in the commercial invoice is in accordance with the purchase order number reflected on all the documents. We find that appellant cannot be put to any further strict proof as to call for the documents received by the dealer from the manufacturer and tally the description mentioned in the invoices raised by the registered dealer etc. This law is now fairly settled by the judgment of Hon ble High Court of Allahabad in the case of Juhi Alloys Ltd., (supra) and various other decisions of the Tribunal as mentioned herein above. On this point itself, the impugned order needs to be set as

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2018 (5) TMI 809 – AUTHORITY FOR ADVANCE RULINGS GUJARAT – 2018 (13) G. S. T. L. 247 (A. A. R. – GST), [2018] 2 GSTL (AAR) 92 (AAR) – Exemption from GST – amount charged as interest – Whether an amount charged as interest on transaction based short term loan given by the Del Credere Agent (DCA) to buyers of material is exempt from tax in terms of the N/N. 12/2017-Central Tax (Rate) dated 28.06.2017? – Held that: – the extension of loan by the applicant (DCA) to the customers is a transaction separate from the transaction of supply of goods by the principal to the customers against consideration wherein the applicant (DCA) also gets the commission from the principal – the interest received by the applicant is consideration towards loan extended to the customers and such interest is not towards the payment of consideration for supply of goods by the principal to the customers, which is a separate transaction.
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As per Sl. No. 27 of the table to N/N. 12/2017-Central Tax (Rate) dated

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sh S. Lakhani The applicant, M/s. Shreenath Polyplast Pvt. Ltd. has raised the following questions for advance ruling – "Whether an amount charged as interest on transaction based short term loan given by the Del Credere Agent (DCA) to buyers of material is exempt from tax in terms of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (Serial Number 27)? 2.1 The applicant has submitted in the application for Advance Ruling that they are Del Credere Agent (herein after referred to as "DCA") appointed by the supplier of goods (herein after referred to as "principal") and has dual role, the first role is to promote the sale and take orders for goods to be supplied by the principal directly and the second role is to guarantee the principal for the payment of goods supplied. If customers fail to make payment, DCA is required to make the payment to the principal. Normally, Principal takes Bank Guarantee (BG) and / or Security Deposit against which princ

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limited to order booking and guaranteeing payment. Supply of material is directly by the principal to the customer. Any delay in supply or any quality issue, it is principal who directly compensates the customer. DCA does not buy, store or sale any material of principal to any customer and therefore there is no transaction of any purchase or sale of goods in his books. 2.4 It is submitted that in the entire transaction, the maximum interaction buyer of the material has with DCA. Due to this, on some occasions, when the buyer is not in a position to pay to principal on the due date, he approaches DCA to extend short term loan and the loan is extended by the DCA by making payment to the principal on behalf of the customer. The loan is repaid to DCA by the customer along with agreed interest. The rate of interest on such short term transaction based loan (from 10 days to 90 days) is as mutually agreed between buyer of the material and DCA. Sometimes, customer does not make payment to the

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8.06.2017. 3.2 The applicant further submitted that DCA is giving the loan to the buyer and charging the interest thereon from them and accordingly it will be covered under item at serial number 27 of the table attached to the impugned Notification and therefore, no tax would become payable on the amount charged as interest. 3.3 The applicant referred to Section 15(2)(d) of the Central Goods and Services Tax Act, 2017 (herein after referred to as the 'CGST Act, 2017) and submitted that the said provision does not apply to the facts of the present matter. They submitted that in the present case, in the commercial practice as explained earlier, DCA is not supplying any goods to the customer but it is the principal who is directly supplying the goods to the customers. Thus, interest charged by DCA from customers is not for delayed payment of consideration of any underlying supply but said interest is charged towards loan given to the customers and hence such interest will be covered u

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ted 28.06.2017, or otherwise. 7. In the case of transaction of supply of goods through DCA, the principal supplies the goods to and receives payment from the customers. In case of failure of customer to make payment, the DCA makes payment to the principal. The DCA gets the commission from principal. It is submitted by the applicant that when the buyer is not in a position to pay to principal on the due date, he approaches the DCA, who extends short term loan by making payment to the principal on behalf of the customer and the loan is repaid to DCA by the customer along with agreed interest. It is also submitted that sometimes, customer does not make payment to the DCA and gives Letter of Credit for 60 / 90 days, which DCA gets discounted with the bank and in this transaction also, interest is payable for the period until Letter of Credit is discounted. For interest, DCA raises debit notes on the customers and customers pay interest while repaying the loan amount. 8. We find that the ex

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or supply of goods by the principal to the customers, which, as we have already observed, is a separate transaction. 10.1 Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, provides exemption to supply of various services, as specified in column (3) of the table to the said Notification. Sl. No. 27 of the table to the said Notification provides as follows:- TABLE Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 27 Heading 9971 Services by way of- (a) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services); (b) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign exchange or amongst banks and such dealers. Nil Nil 10.2 As per the aforesaid Sl. No. 27 of the table to Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017,

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Customs – 12/2018 – Dated:- 19-2-2018 – GOVERNMENT OF INDIA OFFICE OF THE COMMISSIONER OF CUSTOMS (AIRPORT & ADMN) AIR CARGO COMPLEX, NSCBI AIRPORT, KOLKATA: 700 052. F.No. S41(Misc.)-6412017CCX/Pt Date: 19.02.2018 PUBLIC NOTICE NO. 12/2018 Sub : Advisory on rectification of errors for credit of IGST Refund. Attention of the Exporters, Custom House Brokers, Airlines and all Members of Trade is invited to the issue of Refund of IGST paid on export of goods under Rule 96 of CGST Rules, 2017 and this office Public Notice No. 79/2017 dated 20.11.2017 and Public Notice No.08/2018 dated 06.02.2018. 2. It is also informed that the exporters can know the status of refund of IGST or errors, if, any, against a shipping Bill, by logging into thei

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Customs – TRADE NOTICE NO. 03/2018 – Dated:- 19-2-2018 – OFFICE OF THE COMMISSIONER OF CUSTOMS GST BHAVAN, 41/A, SASSON ROAD, PUNE-411001 F. No. VIII/Cus/Tech/PN&SI/48-47/2016 Pune Dated: – 19.02.2018 TRADE NOTICE NO. 03/2018 Subiect : reg. Attention of all Importers/ Exporters/ Customs Brokers and the Members of the Trade is drawn to notice issued under F. No. 450/1 19/2017 -Cus IV, dated 15.02.2018 by the Director (Customs), Ministry of Finance, Department of Revenue, Central Board of Ex

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Service Tax – Started By: – BHAKTIKANT BHATT – Dated:- 17-2-2018 Last Replied Date:- 20-5-2018 – SIR, we are a packaging material manufacture unit.We have import our Raw Material (Plastic Granual) Now Excise EA-2000 Auditor raise a question on import Raw Material and ask us to Pay Service Tax 1.5%on Import Material CIF Value From April-2017 to June-2017 IGST ON OCEAN FREIGHT IN RESPECT OF IMPORT MATERIAL. AS PER CIRCULAR NO.206/4/2017- Service Tax Dt.13/4/2017. Kindly give us your valuable suggestion with cited any case whether we need to PAY 1.5% Service tax on import material value and after it allowable to take credit then in GST Rule How can we take credit ? 2. query. We have paid service tax on our outwards transportation of goods from our factory to customer premises.Also we have paid Excise duty on transportation charge from our factory to customer premises and freight amount separate mention in our sale invoice. Now Excise Auditor say your are not avail cenvat credit of servic

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earance in India as specified in the negative list which thereby, exempted service from Service Tax U/s 66 D(p)(ii). The said entry under the Negative list as omitted with effect from 1.6.2016 and a provision was incorporated in the Mega Exemption Notification No.25/2012-ST, dtd 20.6.2012 vide Entry 53 continuing the exemption. Service Tax (Post-2017) 22.1.2017 – 01.07.2017 The Mega Exemption Notification was amended vide Notification No. 1/2017-ST, dtd. 12.1.2017 and a proviso was inserted excluding from the ambit of the exemption services by way of transportation of goods by a vessel from a place outside India upto the Customs station of clearance in India received by a person located in a non-taxable territory. Further Notification No. 2/2017-ST & 3/2017-ST dtd. 12.1.2017 were introduced and the same entrusted the liability to pay tax on the person in India who complied with Section 29, 30 or by their agent U/s 148 of the Customs Act, 1962 i.e., the foreign shipping liner. Notif

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by a vessel from a place outside India upto the customs station of clearance in India would vest on the importer, located in India. This is a double taxation issue where IGST is leviable on the CIF value of the goods and also separately on the Freight amount. Input Tax Credit is available on the IGST paid under RCM. Refer a recent case where the clarification from the Revenue is awaited for further proceedings against a the said issue. 2018 (2) TMI 770 – GUJARAT HIGH COURT Mohit Minerals Pvt Ltd Versus Union of India Dated:- 9-2-2018 In: GST Special Civil Application No. 726 of 2018 Levy GST on ocean freight whereas the value of import goods includes Ocean Freight. – Vires of N/N. 8/2017-Integrated Tax [Rate] dated 28th June 2017 and Entry 10 of the N/N. 10/2017-Integrated Tax [Rate] also dated 28th June 2017 – petitioner's grievance is that under the impugned Notifications, the petitioner is asked to pay tax at the prescribed rate all over again on the ocean freight – Counsel for

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and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto place of removal (C) place of removal means – a factory or any other place or premises of production or manufacture of the excisable goods ; a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; a depot, premises of consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; It is clear from the above definition of place of removal can be factory or any other place or depot, premises of consignment agent or any other place or premises from where the goods are to be sold which clearly includes customers premises or depot from where the goods are sold. As the place of removal is not defined in CENVAT Credit Rules, 20

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r of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; the seller bore the risk of loss of or damage to the goods during transit to the destination; and the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place. Trust the above explanation helps! – Reply By RamKumar Lakkoju – The Reply = Thank you Mr Praveen Nair for sharing facts of important judgement yet to come. – Reply By YAGAY and SUN – The Reply = In our view, the rationale behind the afore-noted entries against Sl. No 9(ii) of notification No. 8/2017-IT(R) and Sl. No. 10 of Noti

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Goods and Services Tax – GST – By: – Praveen Nair – Dated:- 17-2-2018 Last Replied Date:- 13-7-2018 – This is with reference to the processing of invoices of GSTR 1 pertaining to the export of goods with payment of IGST by the GST System, and transmission of validated invoices to ICEGATE for refund of IGST paid on exports of goods. As per Rule 96, the refund of IGST paid on export of goods is processed and disbursed by Customs. The GST System validates invoice data filed under Table 6A of GSTR 1 based on certain rules, which are specified in Para-E of this advisory, and transmits to ICEGATE for further validation and disbursement of refund. It has been observed that many records are failing validation at GST System, and hence data hasn't got transmitted to ICEGATE. The following are top reasons for validation failures: Export Invoices filed in Table 6A of GSTR 1 did not have information of SB Number, SB Date or Port Code, Total IGST, payable through export invoices specified under

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The following are the main reasons: Mismatch in invoice number and date of the invoices filed in GST System and invoices submitted in SB at customs. Mismatch of port code given in invoice filed in GST System and the invoices given in SB at customs Mismatch of other details of invoices filed at GST System and invoices filed with SB like value, IGST amount etc. Due to such validation failures, the refund of IGST paid on exports is impacted and not processed. Therefore, exporters/taxpayers are hereby requested to follow the following advisory so that they may file their returns (GSTR 1/ GSTR3B) correctly, ensuring that their refund of IGST paid on export of goods are processed successfully. Advisory to the Exporters for Refund of IGST Paid on Export of Goods To ensure that the GST System transmits invoice data, for refund of IGST paid on exports of good, the exporters are advised to provide Complete and Correct Data as per the points given below: File GSTR 1 for the corresponding tax per

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which have incorrect port code, are likely to get rejected by ICEGATE) While filing GSTR 3B Return for the said tax period, please ensure that: IGST amount to be paid on export of goods/services outside India or to SEZ etc. are filed under Table 3.1 (b) and not under Table 3.1(a) or 3.1(c) of GSTR 3B, IGST amount filed in Table 3.1(b) of GSTR 3B is either equal to, or greater than the total IGST shown to have been paid under Table 6A, and Table 6B of GSTR 1 (NONE of the export invoices shall be processed for transmission to ICEGATE if correct IGST amount is not mentioned and paid through Table 3.1(b) of GSTR 3B) Advisory on upcoming facility to the Exporters for modification of GSTR 1 and adjustment of GSTR-3B data, where taxpayer has committed some mistakes: The taxpayers may modified their incorrect invoice data of Table 6A through Table 9A of subsequent tax period. Missing Shipping Bill details or port code detail can be completed Incorrect invoice numbers or other details can be co

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quent tax period. In all these cases, GST System shall aggregate the amount of IGST shown to have been paid under Table 6A/6B and 9A of GSTR 1 and the aggregate IGST amount actually paid through Table 3.1(b) and validation will be done on the basis of cumulative IGST amount of multiple tax period. – Reply By kamalakara ks – The Reply = Sir Thanks for very useful article. we have shown export with payment of IGST in Table 3(1) (a) of GSTR3B instead 3(1) (b). and declared in 6A of GSTR1 It is mentioned that appropriate adjustment may be done in subsequent month. Kindly explain how do make appropriate adjustment in GSTR 3B in subsequent month . – Reply By Harish Kohli – The Reply = Sir This is with reference to your point 1 (2) I have filled the IGST paid export in column 3.1(a). The appropriate tax has been paid in that months GSTR 3B after showing the export and tax in 3.1(a). As per your suggestion to correct this mistake , if I now show the export sale and tax paid of August 2017 in 3

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lly meant for amendment of previous months only related to individual transactions wrongly filled in 6A of that respective month. If there are no change in value the return filed for previous month, GSTR 3B, is valid. You should not add the sales value in the current return, GSTR 3B, since the sales value has already been considered in the previous GSTR 3B return of respective month. So to say: – Unless and until there is a need to revise/reset (which is not recommended), if wrongly filed in terms of value, GSTR 3B filed in earlier month will not be effected though the individual transaction if amended in the current month under GSTR1 9A Table. Revision / Reset has different process online, which should be read before initiating any steps further. Trust the clarification helps! – Reply By Pawan Jaiswal – The Reply = Sir I have declared Nil tax liability in July 2018 in GSTR 3B, but in GSTR -1 i have mentioned the details correctly, now can i pay the short amount paid in June 2018 (FY 2

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2018 (5) TMI 854 – AUTHORITY FOR ADVANCE RULING – MAHARASHTRA – 2018 (12) G. S. T. L. 538 (A. A. R. – GST), [2018] 59 G S.T.R. 363 (AAR) – Classification of Service – Rate of GST – Composite supply or works contract – Nature of supply – Supply of immovable property or supply is of goods and services under a single contract to be construed as composite supply or not – supply of turnkey Engineering, Procurement and Construction ('EPC') Contract for construction of a solar power plant – levy of GST
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Held that: – It is a big project and has a permanent location. Such a plant would, therefore, have an inherent element of permanency. – Further, here the output of the project i.e the power would be available to an identifiable segment of consumers. Thus, this output supply would involve an element of permanency for which it would not be possible and prudent to shift base from time to time or locate the Plant elsewhere at frequent intervals. – The project would be using goods which would

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therefore, there arises no occasion to answer the question as to what would be the “principal supply” in the impugned transaction – In the absence of any documents before us, we would not be able to deal with the issue of benefit of concessional rate of 5% of solar power generation system and parts thereof. – GST-ARA-01/2017/B- 05 Dated:- 17-2-2018 – Shri B.V. Borhade, Joint Commissioner of State Tax and Shri Pankaj Kumar, Joint Commissioner of Central Tax PROCEEDINGS (under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-01/2017/B- 01 Mumbai, dt. 17/02/2018 The present application has been preferred under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as "the CGST Act and MGST Act"] by Giriraj Renewables Private Limited, the applicant, seeking an advance ruling in respect of the following questions : Whether s

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under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION – AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- [A] AS SUBMITTED ALONGWITH APPLICATION Statement of the relevant facts having a bearing on the aforesaid clarification(s)/ transaction(s) 1. "The Applicant is an EPC contractor and enters into contract with various Developers who desire to set up and operate solar photovoltaic plants for supply of power generated. In various cases, the Applicant also is a Project developer wherein it is engaged in operation of renewable energy power plant projects. 2. Typically a turnkey contract is entered into by the Applicant to do end to end setting up of a solar power plant which includes supply of various goods (such as modules, structures, inverter transformer etc) as well as complete design, engineering and studies transportation, unloading, storage and site handling, installation and commissio

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ation(s)/transaction(s) The Applicant prefers to present the application before this Hon'ble Authority on the following, among other, grounds, each of which is taken in the alternative and without prejudice to the others: 1. Legal provisions and applicability 1.1 Rate of solar power generating system Under GST regime, various rates have been prescribed for goods and services. Per, Notification No. 1/2017-Integrated tax (Rate) (The notification is attached herewith as Annexure-A), dated 28 Jun 2017, solar power generating systems and parts for their manufactures are taxable at 5%. The relevant entry reads as follows: Chapter Heading Description 84 Or 85 Or 94 Following renewable enter devices and arts for their manufacture a) Bio-gas plant b) Solar power based devices c) Solar power generating system d) Wind mills and wind operated electricity generator e) Waste to energy plants/devices f) Solar lantem/solar lamp g) Ocean waves/tidal waves energy devices/plants h) Photo voltaic cell

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y as "principal supply" means 'the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary' , Further, mixed supply has been defined under the Act as "mixed supply" means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply". Hence, for mixed supply there should be a single price and entire contract gets taxed at the supply with highest rate of tax. 1.3 Concept of works contract Works contract has been defined under Section 2 (1 19) Of CGST Act as follows: "a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein

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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;' Further, Principal Supply has been defined in Section 2(90) of the CGST Act as 'principal supply means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary' Thus, principal supply refers to the supply which is the predominant element in a composite supply. Illustration as provided in GST law is that In case goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply. Further, in terms of Section 8 of the CGST Act, it has been clarified that

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upply. In the present case, the Applicant would like to submit that the main intent of the contract is provision of the solar power generation system which consists of various components such as modules, structures, inverter transformers, cables, SCADA, transmission lines, etc. Services like civil construction are merely incidental to provision of such goods and form an ancillary part of the contract. It is submitted that service portion of the contract is only 10 to 15% and balance is supply of goods. This also substantiates the fact that provision of services is incidental to supply of goods and hence, the supply of goods should form the principal supply and the entire contract should be taxed as supply of goods itself. It is submitted that the entire contract including goods supplied used in AC electrical, DC electrical, transmission lines as well as other ancillary parts/ goods and services should get covered as composite supply and be taxable principal supply of 'solar power g

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be put to further use. Solar power system has been defined under Solar Power -Grid Connected Ground Mounted and Solar Rooftop and metering Regulation -2014 issued by State of Goa. Solar power system as per the regulation means 'a grid-connected solar generating station including the evacuation system up to the Grid inter-connection point' Typically the term system has a wide ambit. As per the Oxford Dictionary, the definition of the term 'system' is "a complex whole, a set of things working together as a mechanism or interconnecting network". Similarly, the system is defined in Chambers 20th Century Dictionary as "anything formed of parts placed together or adjusted into a regular and connected whole". Hence, system typically includes various components/ parts which are manufactured/ assembled together for performing a function. In the present case, the term system should include all goods provided under the contract which help in end to end generati

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Further, in the case of Bangalore Tribunal in the case of B.H.E.L. vs. Commissioner of Central Excise, Hyderabad it was held that "In the present case, the appellants have claimed exemption in respect of "inverter charger card" as solar power generating system. The appellants actual Iy manufactured SPV lantern. The above lantern required electricity for its working. It is possible to convert solar energy to electricity with the help of inverter charger manufactured by the appellants. The Dy. General Manager has certified that the inverter merger constitutes solar power generating system as it performs the function of generating the required high frequency AC power from Sun-light with, the help of SPV module and supplying it to the compact fluorescent lamp of a solar lantern. In view of the above, expert opinion, we hold that the impugned item can be considered as solar power generating system and is entitled for the benefit of the exemption Notification. Therefore, we a

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re naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character' 2. If various elements of a bundled service are not naturally bundled in the ordinary course of business, it shall be treated as provision of a service which attracts the highest amount of service tax. The concept of naturally bundled services was explained in the Education Guide issued by the CBEC in the year 2012 ('the Education Guide'). The relevant extract of the Education Guide is reproduced as under for ease of reference: Bundled service means a bundle of provision of various services wherein an element of provision of one service is combined with an element or elements of provision of any other service or services. An example of 'bundled service' would be air transport services provided by airlines wherein an element of transportation of passenger by air is combined with an element of provision of cater

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f which are listed below – • The perception of the consumer or the service receiver, If large number of service receivers of such bundle of services reasonably expect such services to be provided as a package then such a package could be treated as naturally bundled in the ordinary course of business • Majority of service providers in a particular area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines • The nature of the various services in a bundle of services will also help in determining whether the services are bundled in the ordinary course of business, If the nature of services is such that one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. For example service of stay in a hotel is often combined with a service or launde

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junction with each other. Also, such composite supply is supplied in the ordinary course of business. • The composite supply would qualify as supply of the principal supply. Taxes would be applicable as on such principal supply. Drawing reference to the above, it is submitted that the customer perceives the entire contract is for supply of solar power generating system as the intent of both the parties is supply of the goods/ system which would help in generation of electricity. Hence, the entire contract (both goods and services) and bundled and linked wherein the main intent is provision of the goods which constitute solar power generating system. 2.4. Global Jurisprudence – Meaning of Composite Supply The concept of 'composite supply' is a global concept and has been discussed in various countries. Provided below is relevant extract from various countries regarding the same: 2.4.1. Australia In terms Of Goods and Services Tax Ruling 2001 /8 issued under Australia, Compo

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such by the purchaser. The fact that either the frame or the lenses may be purchased separately is not to the point. Similarly the fact that one component, the lenses, is GST-free or that one component is subject to a discount does not alter the characterisation. • In the case of Saga Holidays, Stone J focused on the 'social and economic reality' of the supply and found that there was a single supply of accommodation and the adjuncts to that supply (including the use of the furniture and facilities within each room, cleaning and linen services, access to common areas and facilities such as pools and gymnasiums and various other hotel services such as porterage and concierge) were incidental and ancillary to the accommodation part of the supply.' Per the above, composite supply is taxed as supply of the dominant activity to which others are merely ancillary. In the present case also, the dominant supply is those of goods (which constitutes solar power generating system

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ting system and services are only a means to enjoy the same and hence, services are incidental to the main supply of goods. 2.4.3. United Kingdom Under the UK VAT laws, a multiple supply (also known as a combined or composite supply) involves the supply of a number of goods or services. The supplies may or may not be liable to the same VAT rate. If a supply is seen as insignificant or incidental to the main supply, then for the purposes of VAT it is usually ignored – the liability is fixed by the VAT rate applicable to the main supply (or supplies). In the case of Tumble Tots (UK) Ltd v R & C Commrs [2007] BVC 179. Members of a playgroup received a T-shirt (children's clothing is potentially zero rated) and a magazine (potentially zero rated) as well as the right to attend classes which would be standard rated. The Court decided that there was a single standard rated supply of the right to belong to the playgroup and the T shirt and magazine were incidental to that main supply.

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site supply. In the present case, the intention of both the parties is to supply the whole of solar power generating system in totality' which consists of various goods and services are incidental to provision of such goods. What the customer wants is a functional solar power system and services such as erection, commissioning etc are only a means to provide the main supply of goods. 4. Contract does not constitute works contract It is submitted additionally that works contract is also defined as a composite contract and includes 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. It is our case that the intent of the contract executed by the Applicant are not in the nature of erection, commissioni

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be cases wherein the Developer divides the EPC contract between two separate EPC Contracts of construction of solar power generation system. 5.2 Notification no. 1/2017-lntegrated Tax (Rate), which provides concessional rate on solar power generating system does not specify the persons who would be eligible for concessional rate of 5% i.e. developer, EPC contractor or manufacturer/ supplier/ sun-contractor. 5.3 Since the concessional rate of 5% is provided to renewable energy products and parts thereof, the same should be applicable to all suppliers providing such products as long as it can be established (through certification or otherwise) that these are to be used in solar power generation system. This would also be in line with practice under erstwhile excise law wherein benefit was extended to sub-contractors also through MNRE certification. 6. Conclusion As per Section 2(30) of the CGST Act, in case more than one goods are supplied which are bundled together in the ordinary cours

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solar power generating system or its parts should also be available to sub-contractors." [Bl AS SUBMITTED DURING HEARING "1.5. Without prejudice and in addition to the submissions already made, the Applicant hereby make the following additional submissions. The Proposed transactions/ Contract is one for supply of 'Solar Power Generating System' as a whole and hence the rate of GST should be 5%. 1.6. It is submitted that the intent of the parties is always for supply of Solar Power Generating system as a whole 1.7. Reference is made to the draft contract (annexed herewith as Annexure A), which is a Contract for Supply of 60Mw Solar Power Plant. Further, Clause B of the draft Agreement provides as following: "B. Owner has appointed the Contractor for supply of the Solar Power Plant which includes engineering, design, procurement, supply, development, testing and Commissioning of the Plant as per scope defined in relevant schedule of this Contract, as per Applicable

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under the agreement are supplied together for setting up/ supply of a solar power generating system. Contract does not constitute works contract 1.10. It is submitted additionally that works contract is defined as a composite contract and includes 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. 1.11. Therefore, in order to determine whether the supply made by the Applicant is of works contract, it is imperative to understand (i) the essence of the contract and the intention of the parties involved in the contract to determine whether the parties intend to undertake works contract or supply of solar power plant and (ii) whether the activities are undertaken on an immovable property for the contract

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held that if fixing of a plant to a foundation is only meant to give stability to the plant and where there is no intention to make such plant permanent, the foundation would not change the nature of the plant and make it an immovable property. 1.13.2 Reliance is placed on a judgment by the Hon'ble Supreme Court in the matter of Sirpur Paper Mills Ltd. v. Collector of Central Excise, Hyderabad (1998 1 SCC 400) = 1997 (12) TMI 109 – SUPREME COURT OF INDIA , wherein in case of a paper making machine, it was held that merely because the machinery was attached to the earth for operational efficiency, it does not automatically become an immovable property. If the appellant wanted to sell such goods, it could always remove it from the base and sell it. Relevant extract from the judgment is reproduced below for ease of reference: 'The Tribunal held that the machine was attached to earth for operational efficiency. The whole purpose behind attaching the machine to a concrete base was t

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immovable property. 1.13.3 Relying on the aforesaid judgment, the Hon'ble Supreme Court, in the year 2010, in the matter of Commissioner of Central Excise v. Solid and Correct Engg Works & Ors. (2010 (175) ECR 8 (SC)) = 2010 (4) TMI 15 – SUPREME COURT , held that Asphalt Drum/Hot Mix Plants were not immovable property as the fixing of the plants to a foundation was meant only to give stability to the plant and keep its operation vibration free. Further, it was held that the setting up of the plant itself is not intended to be permanent at a given place. The plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed. Hence, the said plants were held to be movable. Relevant extract of the judgement is reproduced as under for ease of reference: 'Applying the above tests to the case at hand, we have no difficulty in holding that the manufacture Of the plants in question do not constitute annexation hence cannot be te

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the question depends upon whether the equipment of the touring cinema would fall within the category of immoveable Property. We have no hesitation in holding that it does not. In the question referred to us, the properties are described as collapsible and capable of being removed. In the very nature of things, properties of that nature cannot be immoveable property. The expression "permanently fastened" occurring in the question is a little misleading Actually some of the machinery or the poles of the tent may be imbedded in the earth, but they are imbedded only temporarily and not permanently, If they were permanently fixed, the equipment would not form part of a touring cinema. 1.13.5. Further, it is worthwhile to note that the Madras High Court in the matter of Sri Velayuthaswamy Spinning Mills v. The Inspector General of Registration and the Sub Registrar (2013 (2) CTC 551), while deciding whether setting up of windmills can be treated as movable property for the purpose

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d as immovable property. Relevant extracts of the judgment are reproduced below for ease of reference: We find ourselves in agreement with the second part of these observations, which is apposite to the instant case. In the case before us, the attachment of the oil engine to earth, though it is undoubtedly a fixture, is for the beneficial enjoyment of the engine itself and in order to use the engine, it has' to be attached to the earth and the attachment lasts only so long as the engine is used. When it is not used, it can be detached and shifted to some other place. The attachment, in such a case, does not make the engine part of the land and as immovable property. A copy of all the judgements is collectively marked and attached as Annexure – B. 1.13.7. In view of the aforesaid judgments, it is submitted that in the instant case, the solar power plants supplied by the Applicant is commissioned and installed only for the purpose of better functioning of the plant and are capable of

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is annexed herewith as Annexure C. 1.13.10 The Central Board of Customs and Excise ('CBEC'), vide 37B Order No. 58/1/2002 – CX issued under F.No.154/26/99 – CX4 dated 15 January, 2002 ('the Circular'), after realizing the anomaly in case of plant d machinery assembled at site, issued the Circular clarifying the following: (v) 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 he reassembled, then the items would not be considered as moveable and will, therefore, not be excisable goods. (vi) If any goods installed at site (example paper making machine) are capable of being sold or shifted as such after removal from the base and without dismantling into its components/parts, the goods would be considered to be movable and thus excisable. The mere fact that the goods, though being capable of being sold or shifted without dismantling, are actually dismantled into their c

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lternative, even if the agreement is construed as a Composite Supply, the most critical compo Major component of Solar Power System – Solar Photovoltaic module 1.14. Section 2(30) of CGST Act defines composite supply to mean '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 . 1.15. Section 2(90) defines principal supply as "principal supply" means 'the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary . 1.16. Further, in terms of Section 8 of the CGST Act, it has been clarified that a composite supply comprising two or more supplies, one of which is a principal supply will be treated as supply of such princi

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0% of the entire Solar Power Plant, and the rest of the components constitute for around 30-34% and are merely parts or sub parts which are required for panel housing or setting up the module such as controllers and switches. This is due to the fact that PV module is a packaged, connect assembly of typically 6×10 photovoltaic solar cells, which constitute the photovoltaic array of a photovoltaic system that generates and supplies solar electricity. In other words PV modules are nothing but an assembly Of solar cells that helps in converting solar power into electricity. Hence, PV module is the most important component of solar power generating system and therefore, would squarely qualify as the 'principal supply' as per the provisions of the GST law. 1.19. Accordingly, it is submitted that the GST rate of PV modules which is 5% should be applicable on the whole of the contract. 1.20. Reference can be made to the CERC Order dated 23 March 2016 involving determination of Benchmar

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ntractor is responsible for the whole of the contract that is for getting-up/ supply of the Plant. For the purpose of undertaking compliances under Laws constituted in India, the parties may agree to define prices of the equipment to be supplied as part of the contract. The same shall not in any manner exceed the lump sum price agreed between the Parties and also does not in any manner dilute the responsibility of the Contractor. 1.23. Further, there is a definition in the draft agreement, "Major Equipment" [1.1.67] which clearly identifies PV Modules as the Major Equipment "Major Equipment(s) " means PV solar modules which is an assembly of solar cells that helps in converting solar power into electricity and all other Equipments specified in Schedule 3 (Contract Price and Payment Milestones) for facilitation of Payment under this Contract; 1.24. Reference in this regard is made to the judgment of Delhi Tribunal in the case of Rajasthan Electronics & Instrument

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to sub-contractor 2.1. In certain cases, the contractor engages various sub-contractors (manufacturers/ supplies/ sub-contractors) who further supply the goods to such contractor or engage in provisioning of certain portion of the contract. 2.2. Further, there may be cases wherein the Developer divides the contract between two separate contracts of construction of solar power generation system. 2.3. Notification no. 1/2017-lntegrated Tax (Rate), which provides concessional rate on solar power generating system does not specify the persons who would be eligible for concessional rate of 5% i.e. developer, contractor or manufacturer/ supplier/ sun-contractor. 2.4. Since the concessional rate of 5% is provided to renewable energy products and parts thereof, the same should be applicable to all suppliers providing such products as long as it can be established (through certification or otherwise) that these are to be used in solar power generation system. This would also be in line with pr

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f solar power plant is purely a Composite Supply and it should not be treated as works contract, they have submitted draft agreement, various case laws. In this connection, I am submitting by submission as under: M/s Giriraj Renewables Pvt Ltd is engaged in the work of construction of a solar power plant. This work is taken on Engineering, Procurement and Construction (EPC) basis. The dictionary meaning of ECP contract is "Engineering, Procurement, and Construction" (EPC) is a particular form of contracting arrangement used in some industries where the EPC Contractor is made responsible for all the activities from design, procurement, construction, to commissioning and handover of the project to the End-User or Owner." Section 2(1 19) of GST Act defines works contract as "a contract for building construction fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioner of any immo

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act for work or services is virtually diminished. ii) The term "Works Contract" is broad and includes all obligations and all types of contracts. Even if some obligations are imposed in addition to supply of goods and materials and performance of services, such contract is still a "works contract". iii) Works contract is a contract for undertaking or bringing into existence some works." Once there is a composite contract for supply and installation it has to be treated as works contract as it is not chattel sold as chattel. The solar power system cannot be shifted to any other place without dismantling the same. Further it is tailor-made system, which cannot be sold as it is to the other person. In the chapter 99 Service Code 995426 specifies the Services Description as "General Construction services of Power Plants and its related infrastructure". It does not specifies the type of power plants. So it is applicable to all type of power plant. The draf

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mission. During the hearing on dt.12.02.2018, a sample copy of the agreements in such types of contracts was submitted and our attention was invited to various clauses therein. Sh. Pravin Chavan, the concerned officer holding the post of State Tax Officer was also present during both the hearings. He requested time till dt.15.02.2018 to give a written submission in the matter 05. OBSERVATIONS We have gone through the facts Of the case. The issue put before us is the classification of a future transaction which would be effected on the lines of a sample agreement copy as tendered during hearing. It has been submitted by the applicant that the sample agreement is customarily the way in which transactions of the nature as is before us are effected. As we go through the submission, we find that the applicant has been stressing that the impugned contract is not a 'works contract' but be treated as a 'composite supply'. As we cursorily understand the issue, even before we loo

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s a contract for building, construction, fabrication, completion, erection, installation, fitting out, 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; It can be seen that works contract involves activities of building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning. However, these activities are in terms of an immovable property. This is the highlight in the definition. We have known a 'works contract' in the Sales Tax regime to be activities as building, construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning of any movable or immovable property. Thus, activities in relation to movable and immovable prop

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r is an entity involved in the business of supply and setting up of complete solar power generating system in various states of India. The document in title of the equipment imported and supplied is directly transferred to the Owner by way' of High Seas Sale for commercial convenience and in order to avail benefit of concessional customs duty as the benefit of concessional rate of customs duty is only available to the Owner. However, as per this agreement, the risk and liabilities accruing in relation to all those equipment shall remain with the Contractor till the completion of the Plant. After the setting up/supply of the Plant, the risk and liabilities are shifted to the Owner. The Owner has undertaken an independent due diligence of the Contractor and based on such due-diligence, agreed to award this Contract for the Supply of Equipment (which in common trade parlance, are supplied together for setting up of solar power generating plant) and performance of Works so as to comple

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include all the equipment and Major Equipment (as defined later) along with its associated accessories, conductors, electrical cables, instruments, apparatus and other items/ equipment required to be supplied by the Contractor for completing and integrating the SPP, as per the Technical Specification, excluding Free Issue Equipment; 1.1.43. "Execution Schedule means the schedule of Supply of Equipment, construction, installation and Commissioning of the SPP as elaborated under the Schedule 4 (Execution Schedule); 1.1.67. "Major Equipment(s) " means P V solar modules which is an assembly of solar cells that helps in converting solar power into electricity and all other Equipments specified in Schedule 3 (Contract Price and Payment Milestones) for facilitation of Payment under this Contract; 1.1.77. "Plant" shall have its meaning under Recital B; 1.1.78. "Plant Site" shall have its meaning under Recital B; 1.1.80. punch List" shall have its meaning

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chedule, to the Plant Site and complete development, installation and Commissioning of the Works in accordance with Technical Specifications, Applicable Law, Applicable Permits and the terms of this Contract, in addition to the detailed drawings/documents finalized during engineering. The detailed Scope of the Contract (including the Supply of Equipment and the performance of Works) is set out under Schedule 1. 4.2. Obligations of Contractor The Contractor shall be obligated under this Contract in respect of the following: design and engineering of the Plant as per the Schedule 2 (Technical Specifications); procure the Equipment's as per the Schedule 4 (Execution Schedule) and the terms of this Contract; construction of civil structures or buildings asper the Schedule 2 (Technical Specifications) approved/agreed between the Parties; The Contractor shall be responsible for providing or causing the provision of skilled Personnel, skilled/unskilled labour, specialists/experts (in addi

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l obligations as set out under this Contract. 6.5. Effect of Payment No payment of the Contract Price or part thereof made by the Owner, shall be deemed to constitute acceptance by the Owner of the performance of (any part or whole) of the Scope of Contract by the Contractor, and shall not relieve the Contractor of any of its obligations under this Contract, solely on the basis of such aforesaid payments being made by the Owner. 6.6. Final Payment The Contractor expressly agrees that the final payment shall be released by the Owner only upon completion of the necessary obligations as set out in the final Payment Milestone as set out under Schedule 3 (Contract Price and Payment Milestones). 7.4. Performance Bank Guarantee Upon Commissioning of the Plant, the Contractor shall provide an unconditional and irrevocable performance bank guarantee to the Owner for 5% (five percent) of the Contract Price from a nationalized or scheduled commercial bank ("PBG ) with respect to the Contract

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S 9.1 The Owner___ agree to provide Free Issue Material as___ agreed between the Parties. The said material would be over and above the Plant being supplied by the Contractor under this contract. The Parties would identify and define such Free issue Material in an annexure as and when such case arises and the same would form part of this contact 12. SUB-CONTRACTING 12.1. The Contractor shall have right to sub-contract part of its obligations under this Contract, with the approval from the Owner, provided, if the vendors sub-contracted is not reflecting in the list set out in Schedule 13 (List of Approved Vendors). In this regard, the Contractor____ only sub-contract its obligations (in respect of Supply of Equipment) under this Contract to one of the pre-approved Sub-Contractors as set out under Schedule 13 (List of Approved Vendors). 14.1. Time Schedule The Owner and the Contractor agrees that the time is of essence of this Contract and subject to the terms of this Contract, the Contr

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unning for a minimum period of 3 days except for minor faults and Grid non- availability. (ii) Upon receipt of the Notice of Commissioning, the Owner or Owner's Representative shall remain available for witnessing Commissioning. Upon inspection of the Commissioning, the Owner shall either: endorse the commissioning certificate ("Commissioning Certificate") certifying that the Works (or the Works in respect of any particular unit of the Plant) is Commissioned, as per the format in Schedule 9; or notify the Contractor in writing, detailing the shortfall or Defect and/or deficiencies within 5 (five) days thereof. (iii) In the event that if the Owner discovers any Defect during the Commissioning of the Plant and furnishes a notice as per Clause 15.5(ii)(b), Contractor shall, promptly correct/ rectify the Defects detailed in Owner 's notice by repairing or rectifying the said Defects within 5 (Five) days and notify the Owner detailing the corrective or remedial actions und

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sioning Certificate ("Deemed Commissioning Certificate "), as per the Schedule 9 for facilitating the milestone payment under the LC. However, Deemed Commissioning Certification shall not relieve the Contractor from its Obligations for Commissioning of SPP as per Technical Specification 15.6. Punch List and Completion (i) Parties shall within 15 (fifteen) Business Days from the date of Commissioning of the Entire SPP, jointly prepare a punch list of the outstanding items/works to be performed by the Contractor as per the Technical Specification ("Punch List"). The Contractor shall perform all the Punch List within 30(thirty) Business Days of the finalising the Punch List or the timeline mutually agreed and notify the Owner of such rectification and/or completion ("Punch List Completion "). It is hereby clarified that the Punch List shall not comprise any such items or Works the lack of completion of which would prevent the operation and function of the Pla

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accepted by the owner ("Final Acceptance Date "). However, if the Punch List items have not been completed within the aforesaid time period, the Contractor shall be required to complete the same within 15 (fifteen) Business Days of a notice to this effect issued by the Owner detailing the deficiencies in completion of the Punch List items by the Contractor. (iii) If the Owner fails to inspect the relevant Punch List after rectification or fails either to endorse the Punch List Completion Certificate or provide Contractor with the list of Punch List items not rectified within the period of 15 (fifteen) Business Days as per the Clause 15.5(i) or the Grid is not available for Commissioning the SPP on or before_____, in such event, the Contractor shall issue a self-endorsed Punch List Completion Certificate ("Deemed Punch List Completion Certificate") as per the Schedule 10 for facilitating the relevant milestone payment under the LC. However, Deemed Punch List Complet

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liabilities pertaining to all the equipment provided and to the development, design, procurement, supply, development, construction, testing and commissioning of the Plant shall be borne by the Contractor till the completion of the Plant. This is notwithstanding the fact that the document in title of the equipment imported and supplied is directly transferred to the Owner by way Of High Seas Sale, or the other equipment domestically supplied by the Contractor are priced separately under this contract for commercial convenience, but the risk and liabilities accruing in relation to all those equipment shall remain with the Contractor tilt the completion of the Plant. 20.2. After the completion of the Plant, the risk and liabilities shall shift to the Owner after completion certificate is duly issued. 22.1. Risk, Custody and Care All risk of the Contractor in the Equipment's, Work and SPP shall stand transferred to the Owner from and upon Commissioning of the Relevant MW size of the

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For the purpose of undertaking compliances under Laws constituted in India, the parties may agree to define prices of the equipment to be supplied as part of the contract, The same shall not in any manner exceed the lump sum price agreed between the Parties and also does not in any manner dilute the responsibility of the Contractor. As can be seen, the owner expects the contractor i.e. the applicant to perform all activities from engineering, design to procurement of the materials and also perform the testing and commissioning. In contracts of such a nature, the liability of the contractor doesn't end with the procuring of materials but it extends till the successful testing and commissioning of the system. The transaction is a 'works contract' but it is for us to decide whether it is a 'works contract' in terms of the GST Act. So, we come to the crux of the issue and which is as to whether the transaction results into any immovable property. The term 'immovable

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and commissioning of the aforesaid machines took place. It is undisputed that duty was paid in respect of the components manufactured at its workshop in Chennai, but no duty was paid on manufacture of the aforesaid mudguns and drilling machines which were erected and Commissioned on site. We can now look at how the judgment has been delivered – "8. In their reply to the show-cause, the respondents explained the processes involved, the manner in which the equipments were assembled and erected as also their specifications in terms of volume and weight. It was explained that the function of the drilling machine is to drill hole in the blast furnace to enable the molten steel to flow out of the blast furnace for collection in ladles for further processing. After the molten material is taken out of the blast furnace, the hole in the wall of the furnace has to be closed by spraying special clay. This function is performed by the mudgun which is brought to its position and locked agains

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s grouted to earth by concrete foundation. The first step is io secure the base plate on the said concrete platform by means of foundation bolts. The base plate is 80 mm mild sheet of about 5 feet diameter. It is welded to the columns which are similar to huge pillars. This fabrication activity takes place in the cast house floor at 25 feet above ground level. After welding the columns, the base plate has to be secured to the concrete platform. This is achieved by getting up a trolley way with high beams in an inclined posture so that base plate could be moved to the concrete platform and secured. The same trolley helps in the movement of various components to their determined position. The various components of the mudgun and drilling machine are mounted piece by piece on a metal frame, which is welded to the base plate. The components are stored in a storehouse away from the blast furnace and are brought to site and physically lifted by a crane and landed on the cast house floor 25-f

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ments have to be assembled/erected on the base frame projection of the furnace. She also accepted the submission urged on behalf of the appellant that if the machines are to be removed from the blast furnace, they have to be first dismantled into parts and brought down to the ground only by using cranes and trolley ways considering the size, and also considering the fact that there is no space available for moving the machines in assembled condition due to their volume and weight. She considered the authorities on the subject and came to the conclusion that erection of mudgun and tap hole-drilling machine results in erection of immovable property. She noticed the judgment of this Court in Narne Tulaman Manufacturers (P) Ltd. [(1989) 1 SCC 172 : 1989 SCC (Tax) 64 : (1988) 38 ELT 566 : 1988 Supp (3) SCR 1] and also noticed the judgment of the Tribunal in Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. v. CCE [(1993) 65 ELT 121 (cegat) = 1992 (10) TMI 188 – CEGAT, NEW DELHI ] which held that the

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ntled and disassembled from the cast floor before being erected or assembled elsewhere. We have also arrived at the same conclusion independently, in para 10 above, Accordingly applying the test laid down by the Supreme Court we hold that the erection and installation of mudguns and tap hole-drilling machines result in immovable property. In the light of the ratio of the above case-law, we hold that the mudguns and tap hole-drilling machines do not admit of the definition of goods and, therefore, excise duty is not leviable thereon. 18. The core question that still survives for consideration is whether the processes undertaken by the appellant at Bhilai for the erection of mudguns and drilling machines resulted in the emergence of goods leviable to excise duty or whether it resulted in erection of immovable property and not goods . 21. The appellant has placed considerable reliance on the principles enunciated and the test laid down by this Court in Municipal Corpn. of Greater Bombay [

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g the rateable value of the structures under the Bombay Municipal Corporation Act. The High Court held that the tanks are neither structure nor a building nor land under the Act. While allowing the appeal this Court observed: (SCC p. 33, para 32)"32. The tanks, though, are resting on earth on their own weight without being fixed with nuts and bolts, they have permanently been erected without being shifted from place to place. Permanency is the test. The chattel whether is movable to another place of use in the same position or liable to be dismantled and re-erected at the latter place? If the answer is yes to the former it must be a movable property and thereby it must be held that it is not attached to the earth. If the answer is yes to the latter it is attached to the earth. 22. Applying the permanency test laid down in the aforesaid decision, counsel for the appellant contended that having regard to the facts of this case which are not in dispute, it must be held that what emer

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which it is installed and rendered functional, and other relevant facts which may lead one to conclude that what emerged as a result was not merely a machine but something which is in the nature of being immovable, and if required to be moved, cannot be moved without first dismantling it, and then re-erecting it at some other place, Some Of the other decisions which we shall hereafter notice clarify the position further. 24. In Quality Steel Tubes (P) Ltd. v. CCE [(1995) 2 SCC 372 : (1995) 75 ELT 17 = 1994 (12) TMI 75 – SUPREME COURT OF INDIA ] the facts were that a tube mill and welding head were erected and installed by the appellant, a manufacturer of steel pipes and tubes, by purchasing certain items of plant and machinery in market and embedding them to earth and installing them to form a part of the tube mill and purchasing certain components from the market and assembling and installing them on the site to form part of the tube mill which was also covered in the process of weldi

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xplained by this Court, were not satisfied in the case of appellant as the tube mill or welding head having been erected and installed in the premises and embedded to earth ceased to be goods within meaning of Section 3 of the Act. 25. In Mittal Engg. Works (P) Ltd. v. CCE [(1997) 1 SCC 203 : (1996) 88 ELT 622 = 1996 (11) TMI 66 – SUPREME COURT OF INDIA ] this Court was concerned with the exigibility to duty of mono vertical crystaIIisers which are used in sugar factories to exhaust molasses of sugar. The material on records described the functions and manufacturing process. A mono vertical crystallizer is fixed on a solid RCC slab having a load-bearing capacity of about 30 tons per square metre. It is assembled at site in different sections and consists of bottom plates, tanks, coils, drive frames, , support, plates, etc. The aforesaid parts were cleared from the premises of the appellants and the mono vertical crystallizer was assembled and erected at site. The process involved weldi

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the site of the sugar factory. It is not capable of being sold as it is, without anything more. This Court, therefore, concluded that mono vertical crystallisers are not "goods " within the meaning of the Act and, therefore, not exigible to excise duty. In Triveni Engg. & Industries Ltd. v. CCE [(2000) 7 SCC 29 : (2000) 120 ELT 273 = 2000 (8) TMI 86 – SUPREME COURT OF INDIA ] a question arose regarding excisability of turbo alternator. In the facts of that case, it was held that installation or erection of turbo alternator on a concrete base specially constructed on the land cannot be treated as a common base and, therefore, it follows that installation or erection of turbo alternator on the platform constructed on the land would be immovable property, as such it cannot be an excisable goods falling within the meaning of Heading 85.02. In reaching this conclusion this Court considered the earlier judgments of this Court in Municipal Corpn. of Greater Bombay [1991 supp (2

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ation of both the intention as well as the factum of fastening to anything attached to the earth, And this has to be ascertained from the facts and circumstances of each case. 26. It was also held that the decision of this Court in Sirpur Paper Mills Ltd. [(1998) 1 SCC 400 : (1998) 97 ELT 3] must be viewed in the light of the findings recorded by CEGAT therein, that the whole purpose behind attaching the machine to a concrete base was to prevent wobbling of the machine and to secure maximum operational efficiency and also safety. In view of those findings it was not possible to hold that the machinery assembled and erected by the appellant at its factory site was immovable property as something attached to the earth like a building or a tree. 27. Keeping in view the principles laid down in the judgments noticed above, and having regard to the facts of this case, we have no doubt in our mind that the mudguns and the drilling machines erected at Site by the appellant on a specially made

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ity Steel Tubes [(1995) 2 SCC 372 ; (1995) 75 ELT 17] and the principles underlying those decisions must apply to the facts of the case in hand. It cannot be disputed that such drilling machines and mudguns are not equipments which are usually shifted from one place to another, nor is it practicable to shift them frequently. Counsel for the appellant submitted before us that once they are erected and assembled they continue to operate from where they are positioned till such time as they are worn out or discarded. According to him they really become a component of the plant and machinery because without their aid a blast furnace cannot operate. It is not necessary for us to express any opinion as to whether the mudguns and the drilling machines are really a component of the plant and machinery of the steel plant, but we are satisfied that having regard to the manner in which these machines are erected and installed upon concrete structures, they do not answer the description of "g

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mix plants and asphalt paver machines, etc. M/s Solex Electronics Equipments is, however, a proprietary concern engaged in the manufacture of electronic control panel boards. It is not in dispute that the three partnership concerns mentioned above are registered with the Central Excise Department nor is it disputed that the proprietary concern is a small-scale industrial unit that is availing exemption from payment of duty in terms of the relevant exemption notification. 4. M/s Solidmec Equipments Ltd. (hereinafter referred to as "Solidmec for short), the fifth unit with which we are concerned in the present appeals is a marketing company engaged in the manufacture of asphalt drum/hot mix plants at the sites provided by the purchasers of such plants. It is common ground that Solidmec advertises its products and undertakes contracts for supplying, erection, commissioning and after-sale services relating thereto. It is also admitted that all the five concerns referred to above are c

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nents of the plants had availed benefit of exemption wrongly and in breach of the provisions of Rules 9(1) and 173-F and other rules regulating the grant of such benefit. 6. Insofar as Solidmec marketing company was concerned, the show-cause notice alleged that Solidmec was engaged in the manufacturing of asphalt batch mix and drum mix/hot mix plants by assembling and installing the parts and components manufactured by the manufacturing units of the group. According to the notice the process of assembly of the parts and components at the site provided by the purchasers of such plants was tantamount to manufacture of such plants as a distinct product with a new name, quality, usage and character emerged out of the said process. Resultantly, the end product, namely, asphalt drum/hot mix plants became exigible to Central excise duty, which duty Solidmec had successfully avoided. The notice also proposed to levy penalties upon all the five concerns under appropriate provisions of the Centr

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h in as much as they are fired to a foundation imbedded in earth no matter only 1 = feet deep. That argument needs to be tested on the touch stone of the provisions referred to above. 24. Section 3(26) of the General Clauses Act includes within the definition of the term immovable property things attached to the earth or permanently fastened to anything attached to the earth. The term attached to the earth has not been defined in the General Clauses Act, 1897. Section 3 of the Transfer of Property Act, however, gives the following meaning to the expression attached to the earth : (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls and buildings; (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. 25. It is evident from the above that the expression '"attached to the earth" has three distinct dimensions, viz. (a) rooted in the earth as in the case of trees an

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especially because the attachment is not permanent and what is attached can be easily detached from the foundation. So also the attachment of the plant to the foundation at which it rests does not fall in the third category, for an attachment to fall in that category it must be for permanent beneficial enjoyment of that to which the plant is attached. It is no body s case that the attachment of the plant to the foundation is meant for permanent beneficial enjoyment of tee either the foundation or the land in which the same is imbedded. 26. In English law the general rule is that what is annexed to the freehold becomes part of the realty under the maxim quidequid plantatur solo, solo cedit. This maxim, however, has no application in India. Even so, the question whether a chattel is imbedded in the earth so as to become immovable property is decided on the same principles as those which determine what constitutes an annexation to the land in English law. The English law has evolved the t

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of annexation have been applied as relevant test in this country also. There are cases where machinery installed by monthly tenant was held to be moveable property as in cases where the lease itself contemplated the removal of the machinery by the tenant at the end of the tenancy. The mode of annexation has been similarly given considerable significance by the courts in this country in order to be treated as fixture. Attachment to the earth must be as defined in Section 3 of the Transfer of Property Act. For instance a hut is an immovable property, even if it is sold with the option to pull it down. A mortgage of the super structure of a house though expressed to be exclusive of the land beneath, creates an interest in immovable property, for it is permanently attached to the ground on which it is built. 30. The courts in this country have applied the test whether the annexation is with the object of permanent beneficial enjoyment of the and or building. Machinery for metal-shaping and

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e termed as immovable property for the following reasons: (i) The plants in question are not per se immovable property. (ii) Such plants cannot be said to be "attached to the earth" within the meaning of that expression as defined in Section 3 of the Transfer of Property Act. (iii) The fixing of the plants to a foundation is meant only to give stability to the plant and keep its operation vibration free. (iv) The setting up of the plant itself is not intended to be permanent at a given place. The plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed. It can be seen that the Hon. Supreme Court has reiterated the same principles as were seen in the earlier decision of T.T.G. Industries Ltd. v. CCE (cited supra). The Hon. Court observed that the expression "attached to the earth" has three distinct dimensions – (a) rooted in the earth as in the case of trees and shrubs (b) imbedded in the earth as in th

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The argument advanced on behalf of the assessee was that since the machine was embedded in a concrete base the same was immovable property even when the embedding was meant only to provide a wobble free operation of the machine. Repelling that contention this Court held that just because the machine was attached to earth for a more efficient working and operation the same did not per se become immovable property. 34. The Court observed: (Sirpur Paper Mills Ltd. case [(1998) I SCC 400] , SCC p. 402, para 5) "5. Apart from this finding of fact made by the Tribunal, the point advanced on behalf of the appellant, that whatever is embedded in earth must be treated as immovable property is basically not sound. For example, a factory owner or a householder may purchase a water pump and fix it on a cement base for operational efficiency and also for security. That will not make the water pump an item of immovable property. Some of the components of the water pump may even be assembled on

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iff Item 68 of the Schedule being excisable goods. Answering the question in negative this Court held that tube mill and welding head erected and installed in the premises and embedded to earth ceased to be goods within the meaning of Section 3 of the Act as the same no longer remained movable goods that could be brought to market for being bought and sold. 39. We do not see any comparison between the erection and installation of a tube mill which involved a comprehensive process of installing slitting line, tube rolling plant, welding plant, testing equipment and galvanizing, etc. referred to in the decision of this Court in Quality Steel Tubes case [(1995) 2 SCC 372 ; (1995) 75 ELT 17] With the setting up of a hot mix plant as in this case. As observed by this Court in Triveni Engg. & Industries Ltd. case [(2000) 7 SCC 29 : (2000) I20 ELT 273] , the facts and circumstances of each case shall have to be examined for determining not only the factum of fastening/attachment to the ea

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o be assembled, erected and attached to the earth on a foundation at the site of the sugar factory and are incapable of being sold to the consumers in the market as it is without anything more. 41. Relying upon the decision of this Court in Quality Steel Tubes (P) Ltd 2 SCC 372 : (1995) 75 ELT 17] , the erection and installation of mono vertical crystallisers was held not dutiable under the Excise Act. This court observed that: [Mittal Engg. Works (P) Ltd. case [(1997) 1 SCC 203 : (1996) 88 ELT 622] , SCC p. 208, para 10] "10… The Tribunal ought to have remembered… that mono vertical crystallisers had, apart from assembly, to be erected and attached by foundations to the earth and, therefore, were not, in any event, marketable as they were. This decision also, in our opinion, does not lend any support to the case of the assessee in these appeals as we are not dealing with the case of a machine like mono vertical crystallisers which is permanently embedded in the stru

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ase. 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 movable goods. It was in those peculiar circumstances that the installation and erection of machines at the sites were held to be by this Court to be immovable property that ceased to remain movable 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 same cannot thereafter be treated as movable so as to be dutiable under the Excise Act. But cases in which there is no assimilation of the machine With the structure permanently, would stand on a different footing. 44. In the instant case a

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on in the correct sense. Though not issued for the purposes of the GST Act, we may as well mention herein the reference by the Hon. Bombay High Court in M/s. Bharti Airtel Ltd. (Earlier known as Bharti Tele-Ventures Ltd.) v. The Commissioner of Central Excise (2014 SCC OnLine Bom 907 : (2015) 77 VST 434) with regard to a Circular being issued by the Central Board of Excise & Customs in a decision of the same Hon. Bombay High Court – "(i) In the decision of the Division Bench of this Court in the case of Commissioner of C.Ex, Mumbai-IV v. Hutchison Max Telecom P. Ltd., (2008 (224) E.L.T 191 (Bom.) ", the issue which fell for consideration of the Division Bench inter alia was pertaining to transmission tower set up by the assessee and whether the setting up of the towers amounted to manufacture as the towers being a new product with a distinct name, characteristics and use and is distinct from the components used in the manufacture as contended on behalf of the Revenue. The

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k up f) Air conditioners. g) Transmission tower was erected at the top of the building. h) The tower was fitted with microwave antennas. i) The BTS/BSC was installed in prefabricated building object. Based on this material the Commissioner held that what emerges is a new commodity. The argument advanced that only "Base station controller/Base trans-receiver station, cell site/Mobile Switching centre were connected with the transmission and reception signals and other equipments were not part of the same, the argument was held as not acceptable as without the tower, UPS, Cable trays, AC., etc., the BTS would not be in a position to function as transmitting and receiving apparatus. The contention of the assessee that various equipments installed at site were individual machine was rejected. The Commissioner further held that with the assembly of various equipment installed what emerges is a commodity with a distinct name, identity, character and use; distinct from inputs and classif

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networked with the Public network. The entire sub systems of BTSs and BSCs or MSCs and the number of constituents would depend on the Geographical area covered by the Cellular Network and there is no fixed designation numbers to constitute a component of transmission apparatus. It is not necessary to set out the other facts in detail considering the the Tribunal has in extenso set out the facts. The Tribunal relying on para 20 in the case of Triveni Engineering & India Ltd (supra) on the test of marketability, held that the so called BTS/BSC site erected, installed and commissioned by the contractors of the company cannot be construed as marketable goods manufactured by the appellant since they cannot go to the market as such BTS/BSC site are not marketable. It also held that the test of marketability would also not be satisfied for another reason being that for the installation of every BTS/BSC, licence from WPC/SACFA a wing of Department of Telecommunications, Government of India

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Fop the aforesaid reasons, the appeal was allowed and accordingly, the orders were set aside. 9. It is not necessary for us to answer the issue as to whether the activities is purely service and consequently, the appellants are not manufacturers. We proceed on the footing that what has been assembled and installed is a commodity having a distinct name from the components from which it was assembled. The question is whether this new commodity is marketable. We have already considered the test of marketability as laid down by the Supreme Court in Triveni Engineering & India Ltd. (supra) and also Moti Laminates Pvt. Ltd. (supra). At this stage, we also note that we proceed on the footing by ignoring the second finding of marketability recorded by the Tribunal namely that BTS/BSC is not marketable as licence is required from the Department of Telecommunication, Government of India. The facts on record would indicate that the equipments erected are embedded in the earth or on a buildin

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designing team after survey identified the location as per the requirements of the local coverage needs, determining the shelter location, fabrication of I-beam and pole location. It may be possible for us to agree that by installing or erecting, a new product comes into being with a different name in the market from its components. However, as discussed the test of marketability is not satisfied. The product cannot he shifted without damage. Apart from that various items and components are embedded in the earth. The product, therefore, is immovable The order dated 15/1/2002 of Central Board of Excise & Customs, New Delhi itself regards items assembled and erected on the site and attached to the foundation On earth which cannot be dismantled without substantial damage to their components and thus, cannot be reassembled, as non excisable. The new product would not be considered as movable and, therefore, will not be an excisable good. Para 6 of the said circular will not apply to th

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a big project and has a permanent location. Such a plant would, therefore, have an inherent element of permanency. Further, here the output of the project i.e the power would be available to an identifiable segment of consumers. Thus, this output supply would involve an element of permanency for which it would not be possible and prudent to shift base from time to time or locate the Plant elsewhere at frequent intervals. The project would be using goods which would be imported. Are such high end equipments frequently dislocated? Would there not be damage to the materials if moved places frequently and if so, would it perform as effectively as it would have when without damage? The questions itself would give the answers. The definition of the word "Commissioning" as found in the agreement brings out the enormity of the scale of operations and how the transaction would fall in the scope of an immovable property – The agreement clauses also refer to a definition of "GO&quo

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ion, who would be taking the Project to a different location. It would be farfetched an argument that the Project could be shifted to a different location just to prove that the Project is movable. The Owner has also to obtain approvals and permits (as per Applicable Law) required for Commissioning and operation of the Plant. Do such permits and documents have a frequent changeover in terms of the place, the owner and project name being constant? Such permissions definitely have an element of permanency. Under the clause about 'Obligations of the Contractor', we find that the contractor is responsible for the construction of civil structures or buildings as per the Schedule 2. The construction of a civil structure is a part of the Project, the transaction to be executed by the applicant. A civil structure cannot be moved. It has to be demolished. Does one still have to offer the argument that the transaction results into a moveable property? Any provision in the agreement to th

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liance has been placed by the applicant. And we have observed earlier that the applicant has not understood the case law in the correct sense. Further, we have to observe that each judgment has to be understood in terms of the facts as available therein. The applicant has not appreciated the case laws in the sense in which they should have been understood. Like in Solid and Correct Engineering Works (cited supra), the Hon. Court has held the product as 'movable property' for the reason that the plant was not intended to be permanent at a given place and the plant can be moved and is indeed moved after the road construction or repair project for which it is set up is completed. Such are not the facts of the instant case as has been explained above. We see that the applicant has not come up with any decision which overrules the laws laid down by the decisions of the Hon. Courts that we have discussed. Nor have we come across any adverse case laws. Having seen that the impugned tr

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t. Having seen thus, we would now look at each of the three questions posed before us – Question 1 Whether supply of turnkey Engineering, Procurement and Construction ('EPC') Contract for construction of a solar power plant wherein both goods and services are supplied can be construed to be a Composite Supply in terms of Section 2(30) of the Central Goods and Services Tax Act, 2017? The applicant poses for us to decide if the Engineering, Procurement and Construction ('EPC') Contract falls within the definition of 'composite supply' as found in the GST Act. Since we have elaborately discussed and observed above that the impugned transaction is a "works contract u/ s 2(119) the GST Act, we need not even enter into the discussion as to whether the impugned transaction is a 'composite supply" u/ s 2(30) the GST Act. In view thereof, we are constrained, with reasons, to answer the first question in the negative. We move on to the second question. Quest

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ction. We proceed to the third question. Question 3 Whether benefit of concessional rate of 5% of solar power generation system and parts thereof would also be available to sub-contractors? We find that the applicant has informed that in certain cases, the contractor engages various sub-contractors (manufacturers/ supplies/ sub-contractors) who further supply the goods to such contractor or engage in provisioning of certain portion of the contract. It is also informed that there may be cases wherein the Developer divides the contract between two separate contracts of construction of solar power generation system, In this regard, the applicant argues that since the concessional rate of 5% [as clarified to be under Notification no. 1/ 2017-lntegrated Tax (Rate)] is provided to renewable energy products and parts thereof, the same should be applicable to all suppliers providing such products as long as it can be established (through certification or otherwise) that these are to be used in

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cable Schedules (exempt or taxable) would have to be seen. In the absence of any documents before us, we would not be able to deal with this question in the present proceedings. 05. In view of the extensive deliberations as held hereinabove, we pass an order as follows : ORDER (under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-01/2017/B- 05 Mumbai, dt. 17/02/2018 For reasons as discussed in the body of the order, the questions are answered thus – Q.1 Whether supply of turnkey Engineering, Procurement and Construction ('EPC') Contract for construction of a solar power plant wherein both goods and services are supplied can be construed to be a Composite Supply in terms of Section 2(30) Of the Central Goods and Services Tax Act, 2017? A.1 The question is answered in the negative. Q.2 If yes, whether the Principal Supply in such case can be said to be 'solar power generating system' which is tax

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