In re Lloyds Register Consulting Energy Private Limited (GST AAR Maharashtra)
Question: – Whether the project management consultancy services provided by the applicant to Vedanta Limited (Division: Cairn Oil & Gas) would be liable to GST at the rate of 12% from January 2018 under serial no. 21(ia) i.e. under Service Accounting Code (“SAC”) 9983 stating “Other professional, technical and business services”, of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017, as inserted vide Notification No. 20/2019-Central Tax (Rate), dated 30.09.2019 since the said amendment is clarification to the amendment made vide Notification No. 1/2018 — Central Tax (Rate) dated 25 January 2018 reducing GST rate for service of exploration, mining or drilling of petroleum crude or natural gas or both to 12%
Answer:- The project management consultancy services provided by the applicant to Vedanta Limited (Division: Cairn Oil & Gas) are covered under Sr. No 21 (ii) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 as amended and would be liable to tax at 18% GST.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services lax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively ] by M/s. Lloyds Register Consulting Energy Private Limited , the applicant, seeking an advance ruling in respect of the following questions.
Whether the project management consultancy services provided by the applicant to Vedanta Limited (Division: Cairn Oil & Gas) would be liable to GST at the rate of 12% from January 2018 under Sr. No. 21(ia), under Service Accounting Code (“SAC”) 9983 stating “Other professional, technical and business services”, of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017, as inserted vide Notification No. 20/2019-Central Tax (Rate), dated 30.09.2019 since the said amendment is clarification to the amendment made vide Notification No. 1/2018 — Central Tax (Rate) dated 25 January 2018 reducing GST rate for service of exploration, mining or drilling of petroleum crude or natural gas or both to 12%
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and MGST Act.
2. FACTS AND CONTENTION — AS PER THE APPLICANT:
2.1 Lloyds Register Consulting Energy Private Limited, the applicant, located at 63 — 64, 6th Floor, Kalpataru Square, Kondivita Lane, Off Andheri — Kurla Road, Andheri (East), Mumbai — 400059 is engaged in the business of providing Technical Consultancy Services in Marine, Nuclear and Oil & Gas sector.
2.2 Vedanta Limited (Division: Cairn Oil & Gas), (hereinafter referred as ‘Cairn, ‘Customer’)
was awarded exploration licenses for OLP blocks as part of the Government of India’s Open Acreage Licensing Policy (OALP) in 2018. The blocks spread across India are a combination of both offshore and onshore with a combined acreage of over 50,000 sq. Kms.
2.3 Cairn identified partners (“Execution Contractors”) to execute the project and the scope of execution would be across the entire spectrum including Seismic services (Acquisition, Processing & Interpretation), non-seismic services (FTG, MT etc.), well construction (drilling, completions, fraccing & testing), installation of early production facilities wherever applicable and preparation of filed development plans (in fields with proven commerciality) and the broad scope of work involved in oil and gas operations by Execution Contractor is in three phases, i.e. Exploration , Appraisal Phase and Field Development Planning Phase.
2.4 with an objective to ensure timely Execution Contractor performance as well as assurance on technical designs of the partner, Cairn engaged the applicant, an experienced international Project Management Consultancy (PMC) company to plan, monitor & track project progress and validate Execution Contractor deliverables.
2.5 Accordingly, Lloyds is responsible for following two key areas:
