In re Arvind Envisol Limited (GST AAR Karnataka)
Whether the service of supply, erection, commissioning and installation of waste-water pretreatment plant followed by operation and maintenance of such plant attracts rate 12% of GST in terms of notification No.11/2017 Central Tax (rate) Dated: 28/06/2017?
The service of supply, erection, commissioning and installation of waste-water pre-treatment plant (ZLD plant) and the services of Operation and Maintenance (O&M) of the said plant together is composite supply of works contract classified under SAC 9954 and is liable to CGST @ 6% and KGST @6% in terms of entry No.3(iii) of the notification No.11/2017 Central Tax (rate) Dated: 28/06/2017 as amended by Notification No. 20/2017-Central Tax (Rate) dated 22.08.2017 and Notification No. 31/2017-Central Tax (Rate) dated 13.10.2017.
FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
M/s. Arvind Envisol Limited (herein after referred as Applicant), Apartment No. D-902, NCC Meadows, Doddaballapur Road, S.N.Halli Post, Bengaluru-560064 having GSTIN number29AAGCA9687AlZD, filed an application for Advance Ruling under Section 97 of CGST Act,2017 read with Rule 104 of the KGST Rules, 2017 and Section 97 of the KGST Act, 2017 read with Rule 104 of KGST Rules 2017 in FORM GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. The applicant submitted that they are engaged in providing end-to-end solutions for water treatment, industrial waste-water treatment, sewage treatment and zero liquid discharge solutions, on engineering and procurement construction/turnkey basis, by setting up effluent treatment plant (ETP), sewage treatment plant (STP), Packaged STP (PSTP), and Zero Liquid Discharge Plant (ZLD). The applicant also provides services in the nature of operation and maintenance of such plants.
3. The applicant submitted that M/s Karnataka Power Corporation Limited (hereinafter referred as KPCL) has awarded a contract to the applicant for supply, erection, commissioning and installation of a waste-water treatment plant (ZLD plant) followed by its operation and maintenance (‘O&M’) for a period of 5 years. The applicant has to carry out the work as detailed in the letter of award issued by the KPCL.
In view of the above, the applicant had sought Advance Ruling in respect of the following question:-
“Whether the service of supply, erection, commissioning and installation of waste-water pre-treatment plant followed by operation and maintenance of such plant attracts rate 12% of GST in terms of notification No.11/2017 Central Tax (rate) Dated: 28/06/2017“
APPLICANT’S INTERPRETATION OF LAW
4. The applicant contends that the supply, erection, commissioning and installation of ZLD plant on turnkey basis including provision of O&M services for a period of 5 years qualifies to be ‘Composite supply of works contract’ under SI. No. 3(iii) of notification No.11/2017 Central Tax (rate) Dated: 28/06/2017 and would attract GST @ 12%. The relevant extract of the Notification is provided hereunder for reference:
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