2018 (12) TMI 1228 – APPELLATE AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – TMI – Classification of services – Works Contract or Composite Supply – combination of services of excavation of sand including loading with machinery at reach, Formation of Ramps and Maintenance of Roads, Transportation charges for the tractors/tippers of sand from reach to stockyard and Loading cost at sand from stockyard to lorries – rate of tax.
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Principal supply in a composite supply – Whether, in the services provided by the applicant under the Agreement with TSMDC, the ‘principal supply’ is that of ‘excavation of sand’ as held by the Central Member or ‘transportation of goods i.e., sand’ as held by the State Member? – Held that:- The basic intent and purpose of the Tender / Contract-Agreement and the concomitant description of the scope of the work therein is to move / shift the mineral sand from one place to another, by means of transport by roads/ramps; for enabling the further despatch b
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s by road only. The Scheme of Classification of services is laid down in the Annexure to the Notification No. 1 1/201 7-Central Tax (Rate) dated 28-6-201 7 which contains the entries pertaining to Land transport services – The classification of the services rendered by the applicant which have been held to be “composite supply” and in which the principal supply is found to be ‘transport of goods by road’ are correctly classifiable under the Service Code (Tariff) 996511 under the Scheme of Classification of services laid down in Annexure to Notification No. 1 1/201 7- Central Tax (Rate) dated 28-6-2017.
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Whether the vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are to be considered as covered by the term ‘vessel’ appearing in the Notification-entry as held by the State Member or as not covered by the term as held by the Central Member? – Held that:- The vehicles used by applicant for transport of sand
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vice Code (Tariff) 996511 Road Transport of goods.., as per Annexure to the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017.
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The opinion expressed by the Central Member in so far as holding that the term ‘vessel’ (appearing in item (ii) under Column (3) against entry at Sl.No.9 of the above Notification), is not applicable to the applicant’s case, is confirmed. – AAAR/02/2018 (A.R.) A.R. Reference-No. AAAR/01/2018 Dated:- 4-9-2018 – SHRI V. ANIL KUMAR AND BANKEY BEHARI AGARWAL MEMBER A.R. Reference-No. AAAR/01/2018 Dated: 04 September, 2018 ORDER-IN-APPEAL NO. AAAR/02/2018 (A.R) (Passed by Telangana State Appellate Authority for Advance Ruling under Section 101 (1) of the Telangana Goods and Services Tax Act, 2017) Preamble 1. In terms of Section 102 of the Telangana Goods & Services Tax Act, 2017 ( the Act , in short), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by
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t, where the Appellate Authority finds that advance ruling pronounced by it under sub-Section (1 ) of Section 1 01 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. * * * * * 1. The subject reference has been made by the Telangana State Authority for Advance Ruling (Goods & Service Tax) ( TSAAR or Authority or lower authority , in short) to this Appellate Authority in terms of Section 98(5) of the Telangana Goods and Services Tax Act, 2017 (hereinafter referred to as TGST Act, 201 7 or the Act , in short) with regard to an application for Advance Ruling filed by M/s. R. Vidyasagar Rao Constructions, Plot No.98 & 99, Lumbini Layout, near Euro School, Gachibowli, Hyderabad – 36 having GSTIN No. 36AAGFR6627L1ZQ1 – here
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te of tax on the services rendered by the applicant, the application filed by M/S. R. Vidyasagar Rao Constructions, Plot No. 98 & 99, Lumbini Layout, near Euro School, Gachibowli, Hyderabad – 36 (GSTIN No. 36AAGFR6627L12Q) is being referred to the Appellate Authority for Advance Ruling for the state of Telangana in terms of Section 98 (5) of the CGST Act, 2017 for hearing and decision on the question on which the advance ruling is sought Brief Facts of the case: 3.1. M/s. RVRC is a registered partnership firm dealing in mining business. They had entered into Agreement (Ref.No. Contract Agreement No.08-TSMDC/DamerakuntaIll/Annaram. Sand/Legal/2017) dated 1 8th March, 2017 ( Agreement / Contract in short) with M/s. TeIangana State Mineral Development Corporation, Hyderabad ( TSMDC or service recipient in short), pursuant to TSMDC s acceptance of the tender submitted by M/s.RVRC in response to TSMDC s Tender / Short E-procurement Tender No.TSMDC / SAND / EXC / Damerakunta-III / Annara
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– which is as reproduced earlier. Vide the application (i.e., Statement containing applicant s interpretation), M/s. RVRC claimed that: (i) the above activity/services rendered would fit into the ambit of Works contract as defined under sub-Section (119) of Section 2 of the GST Acts further read with Sl.No. 6(a) of Schedule II to the GST Acts; and that the same Would be eligible for the benefit of CGST 2.5% + SGST 2.5% = total 5% rate of tax in terms of Notification No. 31/201 7-Central Tax (Rate) dated 31-10-201 7 (and G.O. Ms. No. 253, Revenue (CT-II) Department dated 23-1 1-2017); or (ii) Alternatively, the activity amounts to composite services in which the transportation part is predominant and therefore also the rate would be 5% GST (2.5% CGST + 2.5% SGST), as per the entry transportation of goods 3. 3.3. After examining the issue and analysing the terms of the Agreement / Tender documents and the scope of work involved vis-d-vis statutory provisions and Notification-entries, th
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st Tariff Heading 9965 (Goods transport services) in Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017. (iii) The services supplied by the applicant is a composite supply as defined in clause (30) of Section 2 of the CGST Act. Out of the three components of the services involved viz., (1) excavation of sand, (2) transportation of the excavated sand from the submergence area to the identified stockyard and (3) loading of the sand into lorries at the stockyard; which are naturally bundled, the principal supply is that of excavation of sand ; the services of transportation and loading are ancillary to the said service of excavation of sand . Hence, that the services rendered by the applicant are classifiable as Excavating and Earthmoving Services under Heading 995433 of GST Tariff and rate of tax applicable is 9% CGST + 9% SGST. 3.3.2. Summary of Opinion expressed by the State Member:-. (i) Though a part of the contract i.e, construction of ramps/roads and their maintenance fall
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Transporting by vessel and GST tariff and rate of tax applicable is 2.5% CGST + 2.5% SGST subject to the condition that the applicant is not entitled to ITC (input tax credit) to the extent mentioned in the proviso in Column (5) of (v) entry as mentioned above as per the GO Ms. No. 1 10 Revenue (CT-II) Department dated 29-6-2017. 3.4. Thus, no uniform opinion was arrived at by Members of the lower Authority on the question framed for Advance Ruling. Accordingly, they referred the matter to this Appellate Authority in terms of Section 98 (5) of the Act by framing the reference, as reproduced in para 2.2 of this Order. 4. Section 98 (5) of the Act stipulates that: Where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question . Sub-section (1) of Section 101 of the Act specifies that : The Appellate Authority
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ted in the opinion rendered by the Hon ble Central Member of the Authority for Advance Ruling apart from the submissions of the understanding about the whole issue by the applicant. c. The facts in the contract that the applicant entered into with Telangana State Mineral Development Corporation Ltd (TSMDC) may please be ascertained from the Short Tender Document dated 29-12-2016 and also from the Agreement dated 18-03-2018. d. The above documents makes it clear that the following supplies are involved in the activity being rendered by the applicant: i) Formation of internal ramps and roads and their maintenance i.e. from the outer place of the river to the places where the sand is stagnated in order that the applicant first reaches to the later place by its vehicles viz. bulk containers. ii) Culling out the Sand from the places where it is stagnated, loading into the above containers. iii) Transporting the above loaded Sand to the places chosen by the TSMDC, unloading there for stackin
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7 issued in G.O.Ms.N0.253 Revenue (CT-II) Dept dated 23.11.2017 the rate oftax is to be 2.5% CGST AND 2.5% SGST. The alternative urge of the applicant and its understanding is the object of the contract being to replace the sandfrom one place to another which could be done by moving it from it s place of source to the Stockyard, which could only be done by the mode of transportation of it from such place to such place as the case may be the principal supply is Transportation of Goods and other activities are incidental to such supply. In this event the applicant made a search to accommodate itself in the notified rates of tax, as after exhausting the same only by all possible means it can satisfy himself that this supply would fall under residual entry of tax. When done so, the applicant opines his activity can be and be subjected to tax under Sl.No.9 / Heading No. 9965 i.e. Goods Transport Service-(ii) Transport of goods in a vessel. Vide Notification No. 11/2017 Central tax (rate) da
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refore, vessel includes bulk carriers and tankers. The word s other than ships also carries much significance to give a meaning that Vessel includes goods other than ships. Submissions of the applicant on the opinion rendered by Hon ble Central Member: 1. The observation made by the Hon ble Central Member that the contract consist three parts only [(1), (11) & (111) i.e. excavation of sand, transportation of the excavated sand from the submergence area to the identified stock yard and loading of sand into the lorries at the stock yard] is misconstrued. In fact, the tender document Dt. 29-12-2016 reads at it s page 8 makes it clear that ₹ 7.50 out of rupees upset price of ₹ 100 is assigned for formation of rams and roads. These rams and roads are two kinds as already mentioned above. The activity of formation and maintenance of rams, internal and external roads are therefore one among the constituents parts of the contract. 2. As the applicant is came out as successful b
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tivity road for plying of lorries/vehicles and any incidental expenditure incurred and involved thereon for laying and maintenance of roads shall be borne by the contractor. This expenditure is necessarily to be met by the contractor from out of the 7.5% of the ₹ 74.36 and hence these supplies are constituent part of the contract. 5. The view point of the Hon ble Central Member that the main work in the contact involved is excavation, transport and again loading to other lorries and the laying of the ramps, roads etc. is incidental is not correct. The main object in the contract is to shift the sand from one place to another by way of transportation of it, the applicant submits. 6. The view expressed by both the members that the contract of the applicant is composite supply falling under Sec.2 (30) of the CGST Act, is not being objected by the applicant as the applicant also made a submission that it is as such before the Authority for Advance ruling. 7. The Hon ble Central Membe
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areas to nearby stock yard is incidental to transport of sand excavated. Thus, the Hon ble Central Member pleased to identify principal supply is excavation of sand and it has ancillary supplies other than formation of ramps and roads, there is one more supply i.e. transportation which he holds ancillary to the excavation of Sand and such ancillary supply of transportation in turn carries an ancillary supply viz. formation of ramps and roads . Thus, the view point of the Hon ble Central Member amounting to identification of more than one principal supply in a single composite contract, which is not possible as per law. 10. The Hon ble Central Member thus deals with only about formation of internal roads, ignored the formation and maintenance of external roads besides on one count the central member opined such roads and rams and maintenance not at all integrated to the contract and on other count such formation of roads and rams are incidental to transport of sand to excavated and in
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self-contrary i.e. on one count, by placing reliance on the definition of Vessel under Major Port Trust Act, 1963(dehorse the applicability of such a definition under the provisions of the GST Acts, for the reasons which are mentioned in the foregoing paragraphs) the Central Member while stating vessel is exclusively ship/large boat used for the transportation of goods by sea/in land waters and on the other count gives contrary opinion that the enumeration in the notification is not qua the goods and it is qua mode of transportation . This may kindly be looked into. 13. When the word Vessel is not defined under the Act, it s meaning is to be considered in general and meaning of it can t be borrowed unless mandated under the Act to be done so. In the following words GST Act mandates meaning of certain words from the other Acts. a. actionable claim shall have the same meaning as assigned to it in section 3 of the transfer of Property Act, 1882 (4 of 1882); b. associated enterprises shall
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the law. b. The applicant accepts the opinion of the Hon ble Member about the contract being fallen under Sl.No.9/Heading No.9965 (ii) of Notification No.11/2017 dated 28-06- 2017 and hence liable to GST at the rates of 2.5% CGST and 2.5% SGST Ultimately the applicant submits that in respect of Indirect Taxation, resorting to residual entry taxing shall be ultimate resort i.e. after exhausting all the possible modes to accommodate the taxable event in the lesser rate of enumerated entries . 6.2. During the hearing before the Appellate Authority, the Advocate explained his case with reference to the above written submissions and the points which came up during the course of discussions and pleadings were recorded, are reproduced below:. … 1. He agrees that the composite/ aggregate price ofRs.74.36 as per page 3 of the agreement dated 18th March, 2017 does not have any breakup stated therein. However, he draws attention to page 8 of the tender document dated 2912-2016 as per whic
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ten submissions filed today may be taken to be deleted. 4. He next explained that on going through the nature of the various component activities as mentioned on page 8 of the tender document, and as explained in their written submission, it is their claim that the component activity of transportation should be considered to be the principal supply and therefore it is their claim that in terms of the relevant provisions of GST Law, the entire composite supply deserves to be treated as principal supply, namely transportation of goods. 5. He therefore claims the benefit of Central Tax (Rate) Notification No. 11/2017 (para 27 of the lower authority order refers) and claims that there are five sub-entries in this notification column No.3 and he does not fall in the entries at (i), (iii) and (iv). It is his contention that he falls in the entry (ii) and therefore does not fall in the residual entry at (v). 6. Entry at (ii) reads as transport of goods in a vessel. While explaining his case h
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under Section 3 sub-Section 63 of the General Clauses Act, 1897, as per which vessel shall include any ship or boat or any other description of vessel used in navigation and therefore contended that since the definition under the said Act is only an inclusive definition, therefore the term vessel is not required to be restricted to something that floats; the same meaning is given in the Law Lexicon also. He referred to Page No. 1955 from the Law Lexicon compiled by Sri P. Ramanatha Aiyar, 2nd Edition, Re-print 2010 and submitted a photocopy of the said pages 1955 & 1956. The Bench also referred the page No. 1951 and 1952 of the same Law Lexicon as produced by the learned advocate wherein the term vehicle is defined and took a copy of that. 8. He next referred to para 33 and 34 of the finding by the State Member in the lower authority and contended that he supports that finding in support of his claim that the conveyances being used by them are vessels for the purpose of the present
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the Members have differed, though are reflected within the reference-order. We further observe that Section 101 (1) of the Act mandates this Appellate Authority to pass such order as it thinks fit, confirming or modifying the ruling appealed against or referred to . We also take note that various provisions under Chapter XVII of the Act dealing with Advance Ruling i.e, sub-Section (4) of Section 101, Section 103 (1) or Section 104 (1), inter-alia, refer to advance ruling pronounced by Appellate Authority , which envisages pronouncement of the Advance Ruling by this Appellate Authority after addressing the points of difference/reference in such situations. 8.1.2. The applicant vide the initial application and also in their submissions before the lower Authority, had claimed that their services fall under the ambit of works contract , as defined under Section 19) of the Act. As seen, both the Members of the lower Authority have held the said claim to be untenable; albeit based on differe
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Member held that in the aforesaid composite supply provided by applicant, the principal supply is excavation of sand and hence, the same is classifiable as Excavating and Earthmoving services under Heading 995433 of GST Tariff and rate of tax applicable is 9% CGST + 9% SGST. (ii) The Central Member further held that the entry Transport of goods in a vessel [appearing at sub-category (ii) under Column (3) against entry Sl.No.9 in the Table given under Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017] is not applicable to the instant case, as the vehicles used for transportation of sand are by road and not covered under vessel which as per definition of vessel in Section 2(z) of the Major Port Trusts Act, 1963 includes only transport conveyances by water like ships, barges, boats, tankers etc. As against the above, (iii) The State Member held that the principal supply (in the composite supply) is transportation of sand and the services rendered by the applicant are classifiab
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ation of goods i.e., sand as held by the State Member ? What is the classification of the principal supply determined under (i) above (which would thereby be the classification of the composite supply ) ? (iii) If the principal supply is determined to be transport of goods , then whether the vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are to be considered as covered by the term vessel appearing in the Notification-entry as held by the State Member or as not covered by the said term as held by the Central Member ? (iv) What is the applicable rate of tax on the consideration received by the applicant for the impugned services consequent to determination of (ii) and (iii) above ? 9.1. For the purpose of determination of the above questions, first the statutory provisions relevant for the issues on hand, merit to be referred. The Act defines composite supply and principal supply , as under: 2. Definitions.
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upply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax . 9.2. Notification No. 1 1/201 7-Central Tax (Rate) dated 28-6-2017 issued under Section 9 of the Act provides for the levy of GST on intra-State supply of services. The Notification prescribes the rates of the tax applicable to various services and also provides for a Scheme of Classification of services, as given in Annexure to the Notification. The relevant entries in the Notification are reproduced and referred at the appropriate places in the further course of our discussions. 10.1. Coming to the services involved in the case, the scope of work as described in the Agreement / Tender has already been mentioned earlier. However, the specific clause in the Contract Agreement dated 18th March, 2017 which descr
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ove work shall be deemed to form part and parcel of this agreement and the same may be read and construed as part of this agreement viz., (a) Conditions of contract, (b) Contractor s bid, (c) Priced Bill of quantities, (d) Letter of intent or work order, (e) Agreement. All terms & conditions, al clauses of tender document and all other conditions as mentioned in the above documents have been agreed to by the parties and the same are binding on both the parties . However, the applicant had submitted copies of only the Agreement dated 18-32017, Tender / Short E-procurement tender notice dated 29-12-2016 and the Letter of intent dated 27-1-201 7 issued by TSMDC for the purpose of the subject proceedings. (ii) The Short Tender / E-procurement tender dated 29-12-2016 issued by TSMDC contains following clauses: Estimated Quantity: The tenderer shall excavate 1560000 CBM of sand within a period of 18 months. Upset Price: The Corporation upset price is ₹ 100/- per CBM (Rs.30/- for lo
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d to nearby connectivity road for plying of Lorries / vehicles, any incidental expenditure incurred and involved thereon for laying & maintenance of roads shall be borne by the Contractor . From the above, it appears that there can be no dispute that the impugned include the element of formation/maintenance of roads apart from those of excavation, loading, transport etc., mentioned in the Scope of Work . (iv) Clause 3(vii) of the Agreement, inter-alia, specifies Contractor s possession and deployment of a minimum (numbers) of equipment viz., 8 No.s Excavators, 2 No.s Mobile Water Tankers and 32 No.s Tractors / Tippers. (v) Clauses 3 (viii), (x) of the Agreement stipulate respectively, that Contractor shall (a) obtain necessary licenses, permits etc., as required under Telangana State Sand Mining Rules, 2015; and (b) identify the Stockyard within 1 km from Submergence area; for which TSMDC shall obtain Mineral Dealer License (MDL) and pay lease rental amount thereof not exceeding &#
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on Sand despatches made by TSMDC.. . 11. Keeping in view the above detailed aspects, we proceed to determine the questions before us, as stated earlier. 12.1. Whether, in the services provided by the applicant under the Agreement with TSMDC [which has been held as a composite supply by both the Members], the principal supply is that of excavation of sand as held by the Central Member or transportation of goods i.e., sand as held by the State Member ? 12.2. As per the statutory definition, principal supply in a composite supply would be that which constitutes predominant element and to which other supplies forming part of composite supply are ancillary. The words/phrase predominant element are neither defined in the Act nor any parameters such as quantum, value etc., specified for determining the same. As per common understanding as also dictionary meanings5, predominant denotes something which is more important or noticeable than others in a set of people or things ; which is present a
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entality which is entrusted with the objectives as above. (ii) The Agreement and the earlier Tender floated by TSMDC, in essence, aims for removal of sand located in the specified area (Submergence Area / Reach) and shifting the same to another area, termed as Stockyard @ approx.. 1 km distance from the Submergence area. (iii) The said shifting and removal is to be done using Excavators and loading on to tippers/tractors or lorries/trucks as the case may be, which transport the sand by the ramps / roads to the said Stockyard. (iv) At the Stockyard (for which TSMDC has to obtain Mineral Dealer License and also pay lease rentals), the sand is again loaded into lorries -which is for further onward despatch as per the Contractee-TSMDC s requirements. (v) The Agreement also requires the Contractor i.e, applicant M/s. RVRC to lay/form and maintain the necessary roads / ramps etc. in the course of and for the purpose of the above work. (vi) The consideration agreed upon between the parties fo
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so mentioned in Agreement), loading, unloading and reloading as also formation / maintenance of ramps/roads, are the incidental or ancillary activities, preceding, coinciding or following the said main activity of transportation from one place to another . The breakup of the Upset Price as per the TSMDC s Tender documents, referred at para 10.2 (ii) above, also shows that the activity of transportation and the loading activities which are directly related to the transport, is the predominant portion in impugned services; incidentally there is no separate /specific mention of any value/rate for only excavation activity in the said Upset price. 12.5. In the lower Authority s reference, the Central Member s reasoning was that without excavation of sand, transportation and loading of sand to the lorries doesn t arise and hence excavation constitutes predominant element / principal supply and the others are ancillary. This reasoning does not appeal to us on a comprehensive, holistic analysi
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cation of the composite supply as held by the lower Authority ? 14.2. As determined above, the principal supply in the instant case is that of transportation of goods i.e., sand. It is an urn-disputed fact and also explicitly recorded in the Agreement and tender documents that the said transport is by road only. The Scheme of Classification of services is laid down in the Annexure to the Notification No. 1 1/201 7-Central Tax (Rate) dated 28-6-201 7 which contains the entries pertaining to Land transport services. The relevant extracts from the said Notification are as follows: Rate of GST on intra-State supply of specific services with Service Code Tariff (SAC): In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11, sub-section (5) of section 15 and sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is neces
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511 Road transport services of Goods including letters, parcels, live animals, household and office furniture, containers and the like by refrigerator vehicles, trucks, trailers, man or animal drawn vehicles or any other vehicles 110 996512 Railway transport services of Goods including letters, parcels, live animals, household and office furniture, intermodal containers, bulk cargo and the like 111 996513 Transport services of petroleum and natural gas, water, sewerage and other goods via pipeline 112 996519 Other land transport services of goods nowhere else classified 14.3. From the above, it can be seen that the broad category of Goods Transport services are classified with a 4-digit Code as Heading 9965. Under the said classification, Land Transport services is a sub-classification with 5-digit Code i.e, Group 99651. The said sub-classification is further divided into four categories of services, each with a six-digit Service Code (Tariff). The said four categories pertain to diffe
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pply is found to be transport of goods by road are correctly classifiable under the Service Code (Tariff) 996511 under the Scheme of Classification of services laid down in Annexure to Notification No. 1 1/201 7- Central Tax (Rate) dated 28-6-2017. 15.1. In view of the above determination of the classification of impugned services as transport of goods , the next question for determination is . whether the vehicles used by applicant for transport of sand i.e, lorries / trucks (or tractors / tippers, as mentioned in the application) are to be considered as covered by the term vessel appearing in the Notification-entry as held by the State Member or as not covered by the term as held by the Central Member ? 15.2. The above question arises in the context of the entry appearing in the Notification No. 1 1/201 7-Central Tax (Rate) dated 28-6-2017. The relevant extracts read as follows: Sl.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition (1) (2) (3) (4) (5) 9
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ion no. (iv)] (iv) Transport of goods in containers by rail by any person other than Indian Railways. 6 (v) Goods transport services other than (i), (ii), (iii) and (iv) above. 9 15.3. The applicant s claim is that their activities, as a composite supply with principal supply of transportation of goods/sand , would be covered by the category Transport of goods in a vessel (appearing at sub-category (ii) under Column (3) in the entry at Sl.No.9 in the Table to the said Notification – hereinafter referred as impugned entry ). The differing views expressed by Members of lower authority as also the applicant s claims / contentions in this regard, including during personal hearing before us, have already been reproduced above and hence, not reiterated here; but duly taken into consideration. 15.4. The relevant textual references / definitions / meanings of the word vessel and inferences drawn therefrom by the two Members of the lower Authority as also the applicant, are summarised as follow
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d in supplying the service has not been taken Accordingly, inferred that the term vessel has been used in the proviso as including bulk carriers and tankers as also any goods used for transportation of other goods. Hence, the meaning of vessel for the entry would mean any container which contains other goods for movement from one place to other. (iv) The applicant referred to definition of vessel vide Section 3 (63) of the General Clauses Act, 1897 as also meaning thereof as per Law Lexicon7, which read as follows: Section 3 (63) of the General Clauses Act, 1897 (63) vessel shall include any ship or boat or any other description of vessel used in navigation; Meanings as per Law Lexicon: Vessel includes boats, rafts, timber and other floating bodies. [Pun. Act VIII of 1873 (North Indian Canal and Drain) S.3, Cl.)3)]; includes every ship, boat and other vessel used in navigation, whether propelled by navigation or otherwise. (Explosives Act (IV of 1884), S.4]; includes anything made for
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tion shows that vessel , apart from an aircraft and a vehicle are included therein as three separate types of conveyances. In other words, in the very same statutory definition of conveyance , the words vessel and vehicle have been separately mentioned. It is a settled principle of legal interpretation that when two expressions are used in a statute they have to be assigned two different meanings and both cannot be construed as having the same meaning. The said principle is enunciated / reflected in a catena of decisions. To cite a few, Hon ble Supreme Court in Commissioner of Trade Tax, UP vs S.S. Ayodhya Distillery 2009 (233) ELT.146 (SC) = 2008 (12) TMI 394 – SUPREME COURT OF INDIA, Collector of C.Ex vs Himalayan Coop Milk Product Union Ltd 2000 (122) ELT.327 (SC) – = 2000 (11) TMI 140 – SUPREME COURT OF INDIA wherein Hon ble SC approved Tribunal s view following Hon ble High Court of Bombay s decision in Devidayal Electronics & Wires Ltd. = 1981 (1) TMI 78 – BOMBAY HIGH COURT w
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atute is for a purpose for, otherwise, the same expression would have been used. [B.R. Enterprises v. State of U.P. – (1999) 9 SCC 700 = AIR 1999 SC 1867 = 1999 (5) TMI 498 – SUPREME COURT OF INDIA]. It would be difficult to maintain that, when two expressions of different import are used in a statute in two consecutive provisions, they are used in the same sense, and the conclusion must follow that the two expressions have different connotations. [Member, Board of Revenue v. Arthur Paul Benthall – AIR 1956 SC 35 = (1955) 2 SCR 842 = 1955 (10) TMI 27 – SUPREME COURT OF INDIA]. When the Legislature has taken care of using different phrases in different sections, normally different meaning is required to be assigned to the language used by the Legislature, and there is a presumption that they are not used in the same sense. [Arthur Paul Benthall – AIR 1956 SC 35 = (1955) 2 SCR 842 = 1955 (10) TMI 27 – SUPREME COURT OF INDIA; Oriental Insurance co. Ltd. v. Hansrajbhai V. Kodala – (2001) 5
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r animal drawn vehicles or any other vehicles 110 996512 Railway transport services of Goods including letters, parcels, live animals, household and office furniture, intermodal containers, bulk cargo and the like 111 996513 Transport services of petroleum and natural gas, water, sewerage and other goods via pipeline 112 996519 Other land transport services of goods nowhere else classified 113 Group 99652 Water transport services of goods 114 996521 Coastal and transoceanic (overseas) water transport services of goods by refrigerator vessels, tankers, bulk cargo vessels, container ships and the like 115 996522 Inland water transport services of goods by refrigerator vessels tankers and other vessels ………….. 121 996601 Rental services of road vehicles including buses, coaches, cars, trucks and other motor vehicles, with or without operator 122 996602 Rental services of water vessels including passenger vessels, freight vessels and the like with or without oper
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distinct aspects: (1) The word vessel has been used specifically in respect of the category/categories of services pertaining to Water transport services of goods only; (2) The word vessel has not been used in the context of Land transport services nor the services such as rental services related to Land transport; (3) In the entries pertaining to Land Transport service, the word vehicles with a specific inclusive mention of trucks has only been used. In other words, apart from the definition in the main Act, the Notification also Uses the word vessel in the specific context of and with a specific connotation vis-a-vis Transport by water only and none else. In other words, the Notification has employed an unambiguous and distinct usage of the word vessel in relation to water transport services only , while using the words vehicles / trucks in relation to Land transport services. Hence, the ratio of the principle laid down in the above-cited case laws squarely applies in this context t
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be expanded beyond any limit to cover all or any items which have no relation whatsoever to the defined word in the given context. (iii) The reference to external aids of interpretation such as General Clauses Act or Law Lexicon is not at all necessitated, rather obviated in view of the clear and unambiguous meaning for the word vessel as evident within the Act / Notification. It is also a settled legal principle of interpretation that recourse to external aids for ascertaining meanings of words used in statute arises only in situations of doubt or ambiguity, which is not the case here. (iv) The applicant s endeavour to refer to General Clauses Act also stands negated by their own argument vis-d-vis Central Member s reference to the definition of vessel in MPTA, 1963 i.e, such a reference is not mandated by the GST Act. And in any case, the definition in the General Clause Act or the meaning in the Law Lexicon also show that the term vessel has been defined / explained with reference
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mention that during the hearing, the applicant s advocate, in response to our query vis-d-vis the definition of conveyance in the Act, had fairly stated that among the three categories viz., a vessel or an aircraft or a vehicle in the definition, they would fall under a vehicle . 15.7. The State Member s opinion that vessel used in the impugned entry Would cover all / any types of containers containing other goods – basing on a deductive inference from the words appearing in the proviso to the said entry, is thus found to be incorrect. The proviso only specifies a condition for fulfilment in respect of the particular service transport of goods in a vessel . The wording used in such a condition can by no means be interpreted in a manner negating and distorting the meaning assigned in the Act/Notification to the word vessel as detailed earlier. The reference in the proviso to goods or the exclusion clause ships, vessels including bulk carriers and tankers also has to be construed harmoni
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s the applicable rate of tax on the consideration received by the applicant for the impugned services consequent to determination of earlier two questions (ii) and (iii) ? 17.2. Vide entry Sl.No. 9 in the Table to Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017 – reproduced at para 15.2 above – the rates of tax applicable to Goods Transport services (Heading 9965) have been given under the following categories/service-description [Columns (3) and (4) of the Table refer]: Description of Service Rate (per cent (3) (4) (i) Transport of goods by rail [other than services specified at (iv)] 2.5 (ii) Transport of goods b vessel 2.5 (iii) Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use). 2.5 (iv) Transport of goods in containers by rail by any person Other than Indian Railways 6 (v) Goods transport services other than (i), (ii), (iii) and (iv) above 9 17.3. Out of the above, item No.s (i), (iii) and (
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ng loading with machinery at reach, Formation of Ramps and Maintenance of Roads, Transportation charges for the tractors/tippers of sand from reach to stockyard and Loading cost at sand from stockyard to lorries, whether is Works Contract or Composite Supply and what is the rate of tax on the consideration received therefor ? In the said services held by lower Authority as composite supply , the principal supply is Transport of goods by road and hence, these are classifiable under Service Code 996511 of the Scheme of Classification of Services vide Annexure to Notification No. 11 /2017-CentraI Tax (Rate) dated 28.06.2017. In terms of Section 8 of the Act, the rate of tax on the said services is 9% CGST as specified under Column (4) against the item No.(v) under Column (3) against SI. No. 9 in the Table of the said Notification plus 9 % SGST as per the corresponding State Tax (Rate) Notification; aggregating to 18 %. 19. Accordingly, we pass the following ORDER The Reference Order No. A
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in application filed by M/s. RVRC as well as the Reference order passed by the Authority. 2. The vehicles are mentioned as tractors/tippers herein, whereas in their submissions/pleadings, applicant mentioned the same as trucks/lorries . 3. As mentioned in the application. It is only in the written submissions filed before Advance Ruling Authority and again before the Appellate authority that they have mentioned transport of goods in a vessel and hence that the same was covered by the entry at Sl.No.9, sub-category (ii) under Column (3) in the Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017 with the applicable rate of tax as 2.5% CGST (and consequently SGST also @2.5%), subject to the corresponding condition mentioned under Col.(5). 4. Under the scheme of GST-taxation, for every Central Tax (Rate) Notification issued, a corresponding Notification is issued by State under respective State GST Act. As such, for ease of reference and appreciation of the discussion, the referenc
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