In re M/s. Membrane Filters (I) Pvt. Ltd. (GST AAR Maharashtra)
What is the rate & HSN code of GST is applicable (after it’s introduction from 1st July 2017) when Extracting water from tube well, passing it through treatment plant of removing unwanted contaminants like Iron from ground water and eventually lifting it to overhead tank (in short the scheme) runs on solar power.
TSH 9954 is applicable to the subject contract of Extracting water from tube well, passing it through treatment plant of removing unwanted contaminants like Iron from ground water and eventually lifting it to overhead tank and the same would attract a tax rate of 12% (6% each of CGST and MGST)
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
01. PROCEEDINGS
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by M/S/Membrane Filters(l) Pvt Ltd., the applicant, seeking an advance ruling in respect of the following question.
“What is the rate & HSN code of GST applicable (after it’s introduction from 1st July 2017) when Extracting water from tube well, passing it through treatment plant of removing unwanted contaminants like Iron from ground water and eventually lifting it to overhead tank (in short the scheme) runs on solar power.”
At the outset, we would like to make it clear that the provisions of both the CGST Act and the GST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such 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, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the “GST Act”.
02. FACTS AND CONTENTION – AS PER THE APPLICANT
The submission (Brief facts of the case), as reproduced verbatim, could be seen thus –
FACTS OF THE CASE
Nature of Work, Design, Construction, Supply & commissioning of 200 mini piped water supply schemes with solar operated pump & suitable treatment plant for removal of excessive Iron in Iron affected habitations of nine districts in the State of Bihar.
Scheme is comprising of:
1) Drilling of tube well …
2) Solar panels & its system to run the pump, and take the water through treatment plant and reach water to 5.95 overhead tank at 7 meter height
3) Iron Removal treatment plant
4) Mild Steel Staging (Steel Structure) for supporting overhead tank of 5000 Litre capacity & enthusing treatment plant
5) RCC plinth
6) Prefabricated GI sheet enclosure
7) Distribution line of GI pipes for house to house connections of size 80 mm 40 mm
8) Automatic multiport valves operating on battery that is charged through solar energy
9) House to house connections
Nature & scope of work:
It’s an assembly work involving drilling of tube well, construction of civil plinth at site, supply of pre-fabricated structure, Iron removal treatment plant and the solar system comprising of solar panel, its mounted steel structure, Battery operation to run the night light for security and operate the treatment plant that runs only during the day hours & supply water to villagers; that specifically comes under composite supply category. Incidentally highest cost of any single assembly also happens to be that of Solar System.
Issues Involved as on date:
The contract is issued by Public Health Engineering Department (PHED) of Bihar Government and till now (30th June 2017) they have been deducting TDS of WCT (works Contract Tax) and we have been filing returns in Bihar State through proper channel. Now it’s a composite supply that needs to be noted specifically. Till date no import duty not excise duty was leviable since this was executed under Govt, of India’s Notification as mentioned below.
Notification 47/2002, 91-92-93/2002 cus, 6/2002 Excise and amended time to time and also followed by various circulars by Ministry of Finance and Company Affairs Department of Revenue, Tax Research Units etc. of Government of India clearly states that the duty exemptions (Excise and Customs) are given for setting up of the drinking water treatment plants meant for human and animal consumptions and in the interest of the citizen of the country.
Now we seek your guidance on what is the rate & HSN code of GST is applicable (after it’s introduction from 1st July 2017) when Extracting water from tube well, passing it through treatment plant of removing unwanted contaminants like Iron from ground water and eventually lifting it to overhead tank (in short the scheme) runs on solar power. Our technology has been not only vetted but recognized as one of the innovation by department of Rural Drinking Water through a wing of CSIR-GOI in the year 2015 and published through the Compendium of Innovative Technologies.
Issues Involved as on date:
The contract is issued by Public Health Engineering Department (PHED) of Bihar Government and till now (30th June 2017) they have been deducting VAT against each of supply and the work carried out and we have been filing VAT returns in Bihar State through proper channel. This has been a composite supply that needs to be noted specifically. Till date no import duty not excise duty was laviable since this was executed under Govt, of India’s Notification. Notification 47/2002, 91-92-93/2002 cus, 6/2002 Excise and amended time to time and also followed by various circulars by Ministry of Finance and Company Affairs Department of Revenue, Tax Research Units etc. of Government of India clearly states that the duty exemptions (Excise and Customs) are given for setting up of the drinking water treatment plants meant for human and animal consumptions and in the interest of the citizen of the country and each scheme works only on SOLAR POWER. Such schemes being developed for the first time in the country, has been recognized as an INNOVATION by the Ministry of Rural Drinking Water & Sanitation through Department of Science & Technology in the year 2015.
Our Appeal to your good office:
Now we seek your guidance on what is the rate & HSN code of GST is applicable (after its introduction from 15 July 2017) when Extracting water from tube well, passing it through treatment plant of removing unwanted contaminants like Iron from ground water and eventually lifting it to overhead tank (in short the scheme) that is not only simply assembled at site where it is a composite sully and assemblies done at site including their interconnections and the drinking water scheme works purely on SOLAR POWER.
Following explanation clearly spell out that the total supply has been in two parts with sub items where SOLAR POWER is the pivot point since the scheme works only when there is solar power. SO also each sub system is billed separately and each item is paid separately based on its completion and final bill is paid once the scheme is commissioned. We have attached detailed explanation with the kind of billing that is carried out at each item and each sub assembly work
Nature of Work,
Design, Construction, Supply & commissioning of 200 nos. of mini piped water supply schemes with solar operated pump & suitable treatment plant for removal of excessive Iron in Iron affected habitations of nine districts in the State of Bihar. Scheme is comprising of various sub-assemblies and the final assemblies are carried out as following. Each assembly is billed separately and the department also makes the payment for each of the sub assembly
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