2018 (8) TMI 771 – AUTHORITY FOR ADVANCE RULINGS WEST BENGAL – 2018 (15) G. S. T. L. 712 (A. A. R. – GST) – Supply of goods or services – continuous supply of services or not? – time of supply – Contract Management System (CMS) – The Applicant is very clear in stating that the procedure undertaken under the proposed CMS will not involve transfer of title to the refractories used in course of the production process. Use of the refractories delivered to the customer, including application and disposal, will continue to be controlled by the Applicant.
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Held that:- It is clear from the description of the activities proposed to be undertaken that the Applicant supplies service associated with the manufacturing of metal, value of which is measured at an agreed rate per tonne of hot metal produced and that the Applicant manufactures refractories, which are used as inputs as defined under Section 2(59) of the GST Act.
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Provisioning of the service involves, inter alia, round-the-cloc
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to undertake are services associated with manufacturing of metal, and may be termed as “continuous supply of service” within the meaning of Section 2(33) of the GST Act, provided the service is agreed to be provisioned for a period exceeding three months.
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The time of supply shall be the date of issue of invoice in terms of Section 13(2) (a), read with Section 31(2) of the GST Act and Rule 47 of the GST Rules. – ARN No. 15 of 2018 – 13/WBAAR/2018-19 – Dated:- 20-7-2018 – VISHWANATH AND PARTHASARATHI DEY MEMBER Applicant s representative heard Sri Soumitra Gooptu, Authorized Representative Sri Sohrab Bararia, FCA 1. The Applicant, stated to be a supplier of end to end system solutions for controlled casting of iron and steel which includes supply of refractory components and associated services. The Applicant now intends to offer a new supply, namely Contract Management System (hereinafter referred to as CMS ), and is seeking a Ruling on whether the activity proposed to be undertak
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o application, installation and fixation of various refractories. The Applicant will design the refractories required, monitor their usage and inventory, and supply the required refractory components and systems. This apart, the Applicant will monitor round-the-clock the flow of iron and steel. The CMS will include the following processes. a) Total Tundish Management (hereinafter referred to as TTM ) – Tundish is a bathtub like material where hot steel is poured and collected. It then flows into the mould and takes the desired shape. Several such tundishes are used on rotational basis in course of production of steel. They are lined with refractory for providing protection to the vessels. Refractory components and systems are also fitted to the tundishes for monitoring the process. They help controlling the flow of the liquid steel into the moulds. These refractories need to be replaced frequently. The systems also need timely and regular maintenance. The TTM proposes to provide contin
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d maintained on regular basis. Refractories are also to be applied on the walls of the trough so that they can hold the hot metal. TMS offers activities that include erection and maintenance of these troughs, including regular application of refractories on the walls. Consideration for TMS will be paid at an agreed rate for every tonnage of hot iron produced. 4. The Applicant submits that the scope of work for CMS, specifically TTM and TMS, involves, inter alia, Refractory design, supply, application, performance, inventory management, and disposal post application; 24/7 monitoring of flow of the hot metal, and quality control of the steel production process. 5. The Applicant is very clear in stating that the procedure undertaken under the proposed CMS will not involve transfer of title to the refractories used in course of the production process. Use of the refractories delivered to the customer, including application and disposal, will continue to be controlled by the Applicant. Furt
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ontinuous supply of service within the meaning of Section 2(33) of the GST Act, provided the service is agreed to be provisioned for a period exceeding three months. 9. In the present context provisioning of the service is measured on monthly basis, and the date of payment is within thirty days from end of the month (as stated in clause 4 of the intended Agreement with the Customers). The tax invoice shall, therefore, be issued in terms of Section 31(5)(b) on or before the supplier receives the payment, and the time of supply shall be the date of issue of invoice in terms of Section13(2)(a) read with Section 31(2) of the GST Act and Rule 47 of the GST Rules. In view of the foregoing we rule as under: RULING Activities the Applicant proposes to undertake are services associated with manufacturing of metal, and may be termed as continuous supply of service within the meaning of Section 2(33) of the GST Act, provided the service is agreed to be provisioned for a period exceeding three mon
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