GST Taxability of Various Supplies made to Govt of West Bengal under Jal Jeevan Mission [AAR West Bengal]

The applicant is awarded several contracts, related to Jal Jeevan Mission (JJM), from Public Health Engineering Directorate, Govt. of West Bengal (PHED). The contracts are of two types, one type of contract is for supply of service only and another type of contract for combined supply of goods and service.

The applicant has made this application under subsection (1) of section 97 of the GST Act and the rules made thereunder, seeking an advance ruling in respect of the following questions:

(1) Whether the Contract of Services for (i) Operation & maintenance, regular upkeeping, upgradation of secure Server/Dashboard, water quality applications for data collection, alert generation system and engagement of consultant for coordination, (ii) Operation of water testing laboratories without any supply of goods, (iii) Engagement of consultancy agency for setting up of District Project Management Unit, (iv) Regular upkeep and management of FTK mobile application and web Interface of Water Quality Integrated to State Water Quality Dashboard and maintaining database and (v) Other contracts only for services can be construed as Pure services and exempted from payment of tax vide Serial number 3 of the Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017, as amended?

(2) Whether the contract for (i) Annual maintenance of Mobile Laboratory Van under Water Quality Monitoring and Surveillance Programme, with supply of consumables for the testing of water samples, (ii) Regular preventive upkeep & calibration of On-site Mobile Analysis System installed in various laboratories with supply of spare parts, (iii) Supply & distribution of portable multi-parameter water quality testing device and facilitating block level training/orientation program on testing, awareness generation etc., (iii) Supply and delivery of consumables for water quality monitoring through OMAS including packing and distribution to different laboratories and collection of sample testing as well as uploading of test result in State Water Quality Dashboard, (iv) Supply of Spare Parts including Calibration & regular upkeep of OMAS and (v) Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of IEC leaflets and design on JJM be construed as composite supply?

(3) If Answer to the Q2 is “Yes”, Whether the Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply be exempted from payment of tax vide Serial number 3A of the Notification No. 2/2018 – Central Tax (Rate) dated 25.01.2018 amendment to the mother Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017.

(4) If the answer to Q2 is “No”, whether the Composite supply of goods and services is treated as a supply of “Composite Supply” u/s 2(30) of the GST Act, and the tax liability is to be determined as the exemption/rate applicable for principal supply.

(5) If Answer to Q4 is “Yes”, i.e. composite supply u/s 2(20) of the CGST Act, which one shall be treated as “Principal Supply”, Major item of Supply part or Service part for determination of rate for tax liability.

Ruling:

Answer 1: Except the contract of services mentioned in (v) as above, all services referred to in the question can be regarded as Pure Service and as such they qualify for exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) Dated 28.06.2017, as amended. In respect of (v) in question 1, no ruling is given.

Answer 2: For segments (i) to (vi) as above, the answer is affirmative. For the last segment (vii) the answer is that the supply is that of a special-purpose motor vehicle. This supply of goods will be covered by Entry No. 401A of Schedule III and will be taxed @ 9% CGST+9% SGST.

Answer 3: Upon careful study of the related work orders, it is found that in each of the above composite supplies, the value of goods supplied is more than 25% of the total value of the relevant composite supply. As such, they are not eligible for exemption from payment of tax vide Serial number 3A of the Notification No. 2/2018 – Central Tax (Rate) dated 25.01.2018, amendment to the mother Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017.

Answer 4: The answer to Q.2, except segment (vii), has been given in the affirmative. So the tax liability on the composite supplies referred to hereinabove is to be determined on the basis of the rate of tax applicable to the principal supply, which has been determined in para 4.10.

Answer 5: It will depend on the nature of the particular supply envisaged in a particular work order. This has been elaborated in para 4.10. The principal supply in each of the works has been determined, and the answer will follow the same discussion in para 4.10. The rate of tax for the mentioned composite supply will be the rate of tax of the principal supply determined therein.