Case Law Details
In re Ms. NR Energy Solutions India Pvt. Ltd. (GST AAR Maharashtra)
From the discussions made above we find that in all the three POs submitted by the applicant the major part of the contract is supply of goods. These goods are sold to the client by the applicant and they receive separate payment for such goods sold. Further we find that the goods that are supplied are used by the applicant to provide services installation, testing and commissioning of the substations. Without these goods the services cannot be supplied by the applicant and therefore we find that the goods and services are supplied as a combination and in conjunction and in the course of their business where the principal supply is supply of goods. Thus we find that there is a composite supply in the subject case since in the subject case there is no building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of the contract. The Financial Advisor & Chief Controller of Accounts, APTRANSCO, their client in point no. iii of his letter dated 07.02.2018, has opined that “It is essentially emerges that the supply involves both supply of goods and services, which are naturally bundled together and are supplied in conjunction with eacg other. Such a supply is treated as a composite supply…………….”
Now that we have found that there is no works contract involved in the subject case and the supply is nothing but a composite supply with supply of goods being the principal supply, we come to the second question raised by the applicant which is, whether their transaction would be treated a “supply of goods” if their transaction is not considered a works contract and if yes, what would be the HSN code and rate of tax.
The principal supply as mentioned above in this case is a supply of goods and therefore the GST will have to be paid on the goods at the appropriate rate after classification under the appropriate heading. The applicant has submitted that a ‘Substation Automation’, is a system which is used by an electric utility to remotely monitor, control and coordinate the distribution components installed in the substation. An electrical substation is the part of a power system in which the voltage is transformed from high to low or low to high, for transmission, distribution, transformation and switching. We find that the final deliverable is nothing but ready to operate Substation Automation System, which can control and operate the 220kv, 132kv & 33kv feeders & Power Transformers and are required for the substation to function. The applicant have themselves Accepted that they were collecting GST on these goods classifying the same under chapter Sub Heading No. 85372000. However they have submitted that as against the said sub heading they have been collecting GST @ 28%. We find from the GST Tariff that goods falling under the said sub heading are taxable @ 18%. We also find from their submissions and as accepted by them that the goods supplied by them are in the form of Boards, Panels, etc equipped with 2 or more apparatus of heading 8535 or 8536 like fuses, switches, etc, for electric control and distribution of electricity. Hence the principal supply in their composite supply being goods as described under heading 8537, the applicant is liable to pay GST on the whole contract @ 18%.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING MAHARASHTRA
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