In re Engineer Private Limited (AAR GST Telangana)
Whether the applicant is required to pay GST on ‘initial advance’ of 5% and ‘interim’” advance of 7.5% on Ex works value of goods supplied under ‘First Contract Agreement’ dated 9th February, 2022 with M/s. Singareni Collieries Company Limited?
The applicant is eligible for the benefit of Notification No.66/2017 Central Tax, dated 15th November, 2017 as discussed supra and accordingly the tax liability on sale of goods, as per First Contract, will arise as specified in clause (a) of sub-section (2) of section 12 of the said Act i.e. at the time of supply, which is the date of issue of invoice by the taxpayer or the last date on which he is required, under section 31, to issue the invoice with respect to the supply.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, TELANGANA
1. M/s. PES Engineers Private Limited Hyderabad, 1st floor, Pancom chambers, 6-3-1090/1/A, Somajiguda, Hyderabad-500082, Telangana (36AABCP4220B1Z3) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules.
2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST 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 TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.
3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT as it involves determination of the liability to pay tax on goods or services and classification of goods or services. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- under SGST and Rs. 5,000/- under CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided nor are pending before any authority under any provisions of the CGST/TGST Act’2017. The application is, therefore, admitted after examining it and the records called for and after hearing the applicant as per section 98(2) of TGST Act’20 17.
4 BRIEF FACTS OF THE CASE:
4.1 The applicant M/s. PES Engineers Private Limited Hyderabad are engaged in the construction of various types of Power Projects. They have entered into agreements with Singarenni Collieries Company Limited (S CCL) for “Design, Manufacture, Test, Deliver, Install, Complete & Commission and to conduct guarantee test of certain facilities viz., Fuel Gas de-sulphurisation (FGD) system package for Singareni TPS, stage-1 (2X600MW)” at their Thermal Power Project.
4.2 The applicant entered into two separate contracts for executing this work. The Notification of Award of First Contract was issued by M/s. SCCL vide Ref.No.CRP/MP/0 1 /E0 119O04 13/FGD/5576, dated: 28/12/2021 and the Notification of Award of Second Contract was issued by M/s. SCCL vide Ref.No. CRP/MP/01/E0119O0413/FGD/5577, dated: 28/12/2021. The scope of First Contract is sale of goods ex-manufacture / ex-works. According to the applicant, it is a contract for pure sale of goods.
4.3 The scope of work under the Second Contract is “Inland Transportation of the main equipment, inland transit insurance, unloading at site, storage, erection, civil works, Safety aspects / Compliance to Safety Rules and other services insurance covers other than inland transit insurance, testing, commission and conducting guarantee tests”. According to the applicant, the supply under Second Contract is Works Contract Service as defined under Sec.2(1 19) falling under SAC 9954.
The scope of both the contracts and consideration is given by the applicant as follows:
First Contract:
