In re Zuberi Engineering Company (GST AAR Rajasthan)
The activities of supply, design, installation, commissioning of irrigation project as per tender document floated by Water Resources Department, a unit of Government of Rajasthan shall attract GST @12% (6% CGST and 6% SGST).
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order.
> At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST 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 RGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / RGST Act would be mentioned as being under the “GST Act”.
> The issue raised by M/s Zuberi Engineering Company, 204-206, Anukampa, First Floor, MI Road, Ajmeri Gate, Jaipur-302001, Rajasthan – (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (a) given as under:-
a. Classification of goods and / or services or both
> Further, the applicant being a registered person (GSTIN is 08AAAFZ2103K1ZA as per the declaration given by him in Form ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling.
A. SUBMISSION AND INTERPRETATION OF THE APPLICANT:
1. M/s Zuberi Engineering Company (hereinafter referred to as “applicant”), having its registered address as Anukampa 1st, M.I. Road Jaipur is a partnership firm engaged in undertaking multidisciplinary projects on turnkey basis for Power Plants, Industrial Plants, Cement Industries, Fertilizer Industries, Mining Industries, Steel Pl ants & Oil Refineries.
2. That the applicant is registered under GST as per the provisions of the GST laws bearing GSTIN 08AAAFZ2103K1ZA in the state of Rajasthan.
3. That the applicant has to undertake a supply in respect of a tender floated by Water Resources Department, a unit of Government of Rajasthan for Survey, Investigation, designing & detail Planning, including Land acquisition (Private and Forest) process for pressurized Irrigation (Sprinkler System) including Construction of Intake well, Pump House, Panel Room and Supply, Erecting/Laying, Testing Commissioning Submerge V.T. Pumps, Rising Mains, Distribution network of Pipe Line at Chaks, O&M for Eight years including installation of Solar Power unit of 5×100 KW capacity, EPC contract on turnkey basis.
(There are three volumes of the tender document and copies of all three volumes of the Tender document issued by Water Resources Department are enclosed and marked as Annexure-3, 4 and 5 respectively.)
4. That the tender document is clear on the levy of taxes/duties that the Contractor shall be responsible for payment of all Taxes/Duties/Levies etc. The contractor’s prices are deemed to be inclusive of all such all taxes/duties/levies etc. Hence, it is important for the applicant to understand their liability of GST in relation to the said activity.
5. That the Solar power unit to be constructed in the EPC contract is required for power supply for running the pressurized Irrigation Sprinkler system and it is mandatorily required to have a sufficient capacity to run the complete irrigation system.
6. That this Advance Ruling is sought from the Authority for Advance Ruling in respect of the following question:
Considering the construction and installation of solar power unit as a part of the EPC contract and the fact that the irrigation system has to be operated on solar power, what will be the rate of tax applicable on supply of goods and services involved in the whole contract to be undertaken on turnkey basis?
7. According to Section 7 of Central Goods and Services Tax Act, 2017 7. (1) For the purposes of this Act, the expression “supply” includes,-
(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;
8. The term “goods” has been defined under section 2(52) as
(52) “goods” means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply;
9. The term “services” has been defined under section 2(102) as
(102) “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;
10. According to Section 9 of the Central Goods and Services Tax Act 2017 which is charging section for GST
9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person.
11. The GST rates on goods have been notified by the Government in Notification No. 01/2017 – Central Tax (Rate) dated 28.06.2017 which has been amended by various notifications and the extract of the said notification amended till 21.02.2020 relevant for the present issue is reproduced as under:
