In re Cable Corporation of India Limited (GST AAR Maharashtra)
Whether the supply of transportation services, (two separate agreements with respect to the supply of goods and services), will be exempt from the levy of GST in terms of SI. no. 18 of the Notification No. 12/2017?
From the detailed facts of the case as put before us, as per the first and second contracts referred above there is no doubt that both these contracts consisting of cross fall breach provisions are in the nature of ‘Composite supply of Works Contract’ which is a service & would be taxable @ 18% in terms of Sr. No. 3(11) of Notification No. 11/2017 – Central tax (Rate) dated 28.06.2017 & artificial bifurcation of contracts & scope of work as claimed by the applicant to go out of the scope of correct tax liability is not legal and proper.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING,(MAHARASHTRA)
The present application has been filed 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 Cable Corporation of India Limited, the applicant, seeking an advance ruling in respect of the following issue.
Whether the supply of transportation services, rendered by the Applicant, will be exempt from the levy of GST in terms of SI. no. 18 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th ]une, 2017
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision 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. STATEMENT OF FACTS HAVING A BEARING ON THE QUESTIONS RAISED
1. Cable Corporation of India Limited (hereinafter referred to as ‘Applicant’) having its corporate head office at, Laxmi Building, 4th Floor, 6, Shoorji Vallabhdas Marg, Ballard Estate, Mumbai, Maharashtra 400001, is a leading manufacturer and distributor of a wide range of power and control cables in India.
2. The Applicant was registered under the erstwhile tax regime, and was discharging excise duty, service tax and value added tax (VAT) on the manufacture, on commission and sale of the products, as applicable.
3. Under the current regime, the Applicant is registered as per the provisions of the GST Laws.
4. The Applicant is engaged in the work of Supply, Laying and Terminating of 220kV U/G cables package to the recipient. The engagement comprises of two separate agreements with respect to the supply of goods and services envisaged, which are as follows”-
a) A supply of goods contract regarding the engineering, manufacturing, supply and type testing of Cable Package-C (‘Goods’);
b) A Services Contract for Cable Package-C (which includes Detailed Route Survey, Planning, Transportation, Insurance, Delivery at site, Unloading, Handling, Store, laying, installation (including civil works), Jointing, Termination, testing, Demonstration for acceptance, Commissioning, Documentation required for complete execution of Cable Package-C) (“Services”)
Copies of the contracts regarding the supply of goods and services are being annexed herewith as Ex – A1 and Ex.-A2.
5. Each of the contracts consist of a ‘cross fall breach clause’ deeming any breach in either of the contracts to be a breach of the other contract as well, providing the recipient with an absolute right to terminate both the contracts or claim damages.
The various supplies envisaged under both the contracts are distinct and independent. Every such distinct supply of goods or services have separate considerations prescribed also. One of such supplies that the Applicant is required to provide is that of transportation services with a distinct consideration attributed to the same. Illustrative copies of invoices issued by the Applicant for such supplies are annexed herewith as Exhibit-B.
7. Now Notification No. 12/2017 – Central Tax (Rate) provide for a list of services, supply of which shall be exempt from theUevy of GST. One of such services so specified is that of transportation of goods services made by a supplier other than a GTA or courier agency.
8. In the light of the same, the question which is arising is whether the supply of transportation services, being rendered by the Applicant under the contract for services, will be exempt from levy of GST in terms of SI. no. 18 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017.
9. Under the said factual scenario, the Applicant requests the Hon’ble Maharashtra Authority’ for Advance Ruling to issue a ruling on the following question (A) Whether the supply of transportation services, rendered by the Applicant under the aforesaid facts or circumstances will be exempt from the levy of GST in terms of SI. no. 18 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017.
STATEMENT CONTAINING APPLICANT’S INTERPRETATION OF LAW AND/OR FACTS, AS THE CASE MAY BE, IN RESPECT OF QUESTION(S) ON WHICH ADVANCE RULING IS REQUIRED.
B. QUESTION REQUIRING ADVANCE RULING
The questions on which Advance Ruling is sought by the Applicant is as under:
B.1 Whether the supply of transportation services, rendered by the Applicant, will be exempt from the levy of GST in terms of SI. no. 18 of the Notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017.
C. APPLICANT’S INTERPRETATION
THE SUPPLY OF TRANSPORTATION SERVICES BY THE APPLICANT SHALL BE EXEMPT FROM THE LEVY OF GST AS PER NOTIFICATION NO. 12/2017 CENTRAL TAX (RATE) DATED 27.05.2017 Transportation charges collected from the customer is covered by the exemption provided under SI. No. 18 of the Notification No. 12/2017 – Central Tax (Rate)
C1. Sl. No. 18 of the Notification No. 12/2017-Central Tax (Rate) dated exempts the supply of transportation of goods services by a supplier, not being a GTA or courier agency, from the levy of GST. The relevant portion may be extracted as follows:
