In re Sterlite Technologies Limited (GST AAR Maharashtra)
The Applicant, registered under GST Laws is engaged in manufacturing of telecom products such as optic fiber optic fiber cable, etc.; laying of these optic fiber cables to create a network, setting up of control centers, installation of equipment necessary to operate the network for desired purpose, commissioning of network and any other ancillary activity that may be necessary for creation of network infrastructure for its customers in telecom industry.
The Indian Navy has entrusted the setting of a countrywide IP/MPLS based multiprotocol converged network, Naval Communication Network (referred to as “network”), as core infrastructure for supporting strategic and operational needs of Navy, to Bharat Sanchar Nigam Limited (“BSNL”) which in turn has contracted with the Applicant to set up the network including the responsibility to supply all the material and services required for setting up of network, training services to operate the same and supply of satellite connectivity vehicles required for ensuring seamless connectivity during breakdown of network. Applicant has further submitted that the entire project as per the contract is bifurcated into different packages and the purchase order is presently raised by BSNL with reference to cost break up of each of the material and services required to be supplied by Applicant under these packages.
As per applicant’s submissions, the said network to be so created mainly involves activities like : Construction of holdings and raising of civil structures necessary to house data centers, nearline data centers, disaster recovery station, satellite data center and connectivity equipment at various Naval ports; Installing rack, stack in the buildings and other civil infrastructures necessary to house the equipment and enable operation of all the centers/ports; Assemble /install all equipment and powering it up by connecting with power supply and back-up generators; and Interconnecting and configuring all the equipment in all the data centers, near line data centers, disaster recovery station, satellite data center, etc. with each other to enable information exchange across the network as desired.
The applicant has submitted that it had previously approached for advance ruing in the same matter and that this Authority had ruled that (i). The supply of goods or services for ‘setting up of network’ would qualify as a composite supply of ‘works contract’ as defined under Section 2(119) of the CGST Act and (ii) Activities of the Applicant were covered by sub-clause (ii) of Entry No. 3 of rate Notification and attracted GST at the rate of 18%.
Since, the activities discussed in above mentioned order and the activities under the present application for which applicant has sought Advance Ruling are one and the same and further, since there is no additional information/submission provided by the applicant in the present application, there is no point to deviate from the finding given in the earlier determination, since neither, any appeal seems to have been filed nor any further order is received in the said earlier matter.
In view of the above The supplies of the Applicant are covered by sub-clause (xii) of Entry No. 3 of Notification No. 11/2017 —CTR- dated 28.06.2017 as amended and taxable @ 18% GST.
Read AAAR Order: 12% GST payable on setting of Naval Communication Network for Indian Navy on Supply from 1.4.19 to 31.12.21
