Page 108 - GSTL_23rd April 2020_Vol 35_Part 4

434 GST LAW TIMES [ Vol. 35
they raise monthly invoices along with energy savings calculation; the energy
savings report gets verified & approved by third party energy auditor and hence
the payments are released only after completion of 30 days from the date of
submission of energy audit report and therefore the time of supply is 30 working
days from the date of submission of approved energy savings report.
8.10 The applicant, with regard to time of supply, contends that in case
their activity is treated as supply of goods, the time of supply would be earliest
of (i) date of issue of invoice or last date of its issuance as per Section 31 of the
CGST Act, 2017 (ii) date of receipt of payment with respect to supply; considera-
tion is received on monthly basis during the entire tenure of the contract and is
equivalent to the value of 90% of energy saved; the goods are handed over at the
time of termination of contract and hence the time of supply of goods would be
at the end of the tenure of contract i.e. at the end of 7 years.
9. The main issue before us to decide is whether the activity of the ap-
plicant herein amounts to supply of goods or supply of services and then the
time of supply of the said supply. We proceed to examine, the nature of supply,
of the applicant.
9.1 We examine the Tender Notice No. 46, wherein the nature of work
is mentioned as “Implementation of ESCO project” which includes “Design, Supply,
Installation, Operation and Maintenance of LED Street Lights”. It is clearly evident
from the aforesaid nature of work that the contract involves design, supply &
installation of LED Street Lights and thereafter operation & Maintenance of the
same. The entire contract depends on supply of LED Street Lights without which
the other aspects of the contract can’t be fulfilled/attended to. In this regard we
draw attention to the terms of the contract.
9.2 The following facts emerge, on detailed scrutiny of the terms of the
contract, made between the applicant and the TMC.
(i) “Operation & Maintenance (O&M)” means all the activities re-
quired for operation and maintenance of the street lighting system
handed over to the contractor (Applicant herein) within the Project
Area including, but not limited to smart feeder panels, ca-
bles/conductors, connectors, fuses, poles, pole earthing, junction
box, fixtures, wires etc. (Clause 1.1 of the contract)
(ii) The contractor undertakes the implementation of energy conserva-
tion measures, installation of smart feeder panels for automation &
metering and operation & comprehensive maintenance of 12,000
street lighting fixtures and respective switching points identified
through the Third Party Energy Audit within the project area (the
“Project”). The energy performance contract is for implementation
of ESCO project for street lighting on shared saving mode. (pream-
ble of the contract)
(iii) Scope of work of the contract is divided into 3 phases. Phase I co-
vers identification of infrastructure of the existing street lighting
system, maintained by TMC. Phase II includes design, installation,
operation and transfer of LED streetlight as per the road-wise speci-
fications provided in the contract. Phase III is operation & mainte-
nance of street light system for 7 years (Clause 29.6 of the contract
read with Schedule I of Tender Notice).

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