In Re G.E. Diesel Locomotive (P) Ltd. (GST AAR Uttar Pradesh)
M/s. GE Diesel Locomotive Private Limited, Locomotive Shed Roza, Post Roza RS, Shahjanpur, Uttar Pradesh (hereinafter called the applicant) is a registered assessee under GST having GSTN : 09AAGCG1589HIZA.
2. The applicant is engaged in the business of import and manufacture of rail locomotive engines for supply to Indian Railways. The applicant had made a bid for a tender floated by the Indian Railways for supply of locomotive engines and their comprehensive maintenance. In pursuance to the bid, the applicant has been awarded a contract by President of India represented by Director, Mechanical Engineering (Works), Ministry of Railways (‘Indian Railways’) Government of India for setting up of factory at Bihar for assembly/manufacture of locomotives for supply to Indian Railways and comprehensive maintenance of said rail locomotives.
3. The applicant in this application dated 15-2-2018 has raised following issues for determination by the Authority —
(a) Whether supply of comprehensive annual maintenance service which may also involve incidental supply of spare parts/goods should be classified as a composite supply or mixed supply?
(b) In case the said contract is considered as composite supply, what is the principal supply between goods or services?
(c) In case goods are considered as principal supply, how the taxability should be determined considering the following :
(i) The contract would entail supply of various goods falling under different tax brackets.
(ii) These goods would be supplied on a need basis as and when required at different point(s) of time.
(iii) There is no fixed value ascribed for goods in the contract considering these goods would be supplied depending upon condition of the locomotive at the time of maintenance.
(d) In case services are considered as principal supply, what tax rate should be applicable?
(e) In case of the said contract, what is the relevant place of supply and type of tax which needs to be discharged (i.e. CGST & SGST or IGST)?
4. The applicant was granted a personal hearing on 20-4-2018. Shri Ankush Goel, Tax Head, M/s. GE Diesel Locomotive Private Ltd., and Rjeev Dewan, Consultant, M/s. GE Diesel Locomotive Private Ltd. appeared on behalf of the applicant. In the written submission, the applicant has submitted that they are engaged for supplying 1000 locomotives as well as ensuring comprehensive annual maintenance for first 500 locomotives for an agreed period at its two locomotive maintenance sheds. The first locomotive maintenance shed is being setup in the State of Uttar Pradesh and the second locomotive maintenance shed will be set-up in the State of Gujarat in future. Further, the consideration for comprehensive annual maintenance is pre-agreed as a percentage of the locomotive price. The copy of the agreement executed between the applicant and Indian Railways for the said scope of work was also submitted.
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