In re Mrs. Rajendrababu Ambika (GST AAR Tamil Nadu)
1. The applicable classification of the dairy Machinery cannot be pronounced as no details of such supply were produced.
2. The activity of Supply undertaken by the applicant in respect of the awarded work order by the Tiruchirapalli District Coopertive Milk Producers Union Ltd, to carry out the work towards the 7X7 Frick Ammonia Compressor, IBT Tank Liquid Separator in pipeline repairing and replacement work at Karur and work order by the Kanchepuram Thiruvallur District Co-operative Milk Producers Union Ltd, Thiruvallur for providing new header to Inter connecting ice bank tank with Accel Compressor and gladded insulation with aluminium sheet is classifiable under SAC 998717 and the applicable rate of tax is 9%-CGST under Sl.No. 25(ii) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 as amended and at 9% -SGST under Sl.No. 25(ii) of Notification No.II(2)/CTR/532(d-14)/2017 vide G.O. (Ms) No. 72 dated 29.06.2017 as amended
3. The Activity of the applicant are not ‘Works Contract’ as defined in Section 2(119) of the CGST/TNGST Act 2017
4. The applicability of E-way bill procedure and the details to be filled in GSTR-1 are not answered as the same are not in the purview of Advance Ruling as per Setion 97 of the CGST/TNGST Act 2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING TAMIL NADU
Note: Any appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai within 30 days from the date on which the ruling sought to be appealed against is communicated.
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
M/s. Sri Dhanalakshmi Welding Works, 34, Veerakaliamman Koil Street, Jaihindpuram, Madurai (hereinafter called the Applicant) is engaged in manufacturing, erection and commissioning, reconditioning, repairing and maintenance of milk dairy machinery and its equipments at Dairy sector. They are registered under GST with GSTIN 33AHSPA0553H2ZL. The applicant has sought Advance Ruling on:
1. Clarify whether their dairy machinery works is liable to tax at 12% (HSN 8434) or 18% (HSN 8413)
2. In dairy machinery works they have taken milk processing, milk chilling, refrigeration system, milk handling equipments, milk packing equipments and milk allied product making machinery.
3. For such supply and erection of dairy machinery it involves service charges also. If so what will be the rate of tax on the service charge component.
4. Whether their nature of activities falls under works contract or not. If so what will be the rate of tax and its HSN code and what are the details of entries to be made in monthly return GSTR 1.
5. Clarify the applicability of E way bill procedures for their business activities which involves goods sent on delivery challan for erection purpose and bill made subsequently and for taking back the machinery to their place for maintenance and what are the transport documents to be used for the above mentioned business activities.
The Applicant has submitted the copy of application in Form GST ARA – 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/-each under sub-rule (1) of Rule 104 of CGST rules 201 7 and SGST Rules 2017.
2. The applicant has stated that they are involved in manufacturing, erection…………………………………………………….. machinery and its equipments at Dairy Sector. They have also stated that they regularly carry out the above said works by way of tender or quotation which is called for by co-operative milk producers union ltd., at various districts in Tamil Nadu.
3. The Authorized Representative of the Applicant was heard in the matter on 30.11.2018. Shri. M.Nagarajan, Engineer of the Applicant Company appeared for the hearing. He stated that they do repair/erection /replace of Plant/ Machinery for dairies. They either supply only labour or machinery and labour. The dairy raises enquiry for which quotation is raised by them on which work order is given to them. They wanted to seek clarification if the supply is works contract. The applicant undertook to furnish copies of all enquiry, PO, Work Order, invoices, input invoices in 2 weeks.
3.1 The applicant was offered another opportunity of hearing on 22.02.2019. Shri. M. Nagarajan appeared and submitted that they procure materials, fabricate the same and install. In case, if they are issued with a contract they provide the maintenance service also. They also stated that they have a contract for supply of machinery for which they have sought clarification. The applicant furnished the letter calling for Sealed quotations addressed to them by Tiruchirappalli Dist. Coop. Milk producers Union Ltd for ‘Ammonia 7X7 Frick Compressor, IBT Tank liquid separator in pipe line replacement work for Karur CC work’; Price negotiating letters; Work Order; Invoice raised by them and similar set of documents in respect of the works carried out by the applicant for ‘The Kancheepuram – Thiruvallur District Co-operative Milk Producers’ Union Ltd’.
3.2 The applicant in their letter dt 12.03.2019 further stated that they have already furnished all the relevant work orders for which they seek classification.
4. From the submissions of the applicant it is seen that the applicant is awarded work order by the Tiruchirapalli District Coopertive Milk Producers Union Ltd, to carry out the work towards the 7X7 Frick Ammonia Compressor, IBT Tank Liquid Separator in pipeline repairing and replacement work at Karur at a cost of Rs. 82,000/-(excl GST). As per the option of works sought by the tender document, the work involves supply of materials of 2″ dia M.S pipe, liquid seperartor and pipeline M.S fittings; alteration wok for liquid oil separator (cutting, welding, removal alteration work) with consumables for welding such as bolt, nuts and other………………………………….. work materials with labour charges; material transportation, loading and unloading and handling charges. It is seen that the quotation sought is for all the above supply together and the quotation given by the applicants also a single price for all. The work order shows GST at 18% and the invoice raised by the applicant is for “maintenance and repair services for ice bank tank liquid separator in pipe line repairing and replacement with necessary pipe and pipe fittings” wit HSN /SAC 998717 and GST 18%. The applicant was also awarded another work contract by the Kanchepuram Thiruvallur District Co-operative Milk Producers Union Ltd, Thiruvallur for removing existing suction pipe lines with header, providing new suction header and interconnecting ice bank tank compressors with pipelines, laying insulation for the pipe lines and gladding the insulation with aluminum sheet at Kakkalur Diary with at an estimated cost of Rs.82500/-(excl GST). In this case to the invoice is a single one for with complete supply with HSN /SAC 998717 and GST 18%. In both the cases it is seen that the work includes supply of Materials and charges for works. From the invoices raised it is seen that the works undertaken is `Maintenance and Repair Service of existing dairy machinery involving supply of relevant materials. The applicant has not furnished any relevant work order/invoices in respect of supply of various diary machinery for which they seek clarification in their application. Furthermore, though in the Personal Hearing, it is stated that they have a contract for supply of machinery, the details of the same is not furnished before us.
5. The jurisdictional authority- Commissioner of Central GST 86 Central Excise, Madurai has furnished the comments on the questions raised by the applicant which is reproduced below:
