Page 169 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : ABB INDIA LTD. 495
(2) Supply, laying and connecting of the control cables from RTU to
equipment,
(3) Supply, erection and commissioning of UPS and batteries for RTU,
(4) Supply and installation of slave clocks and antenna,
(5) Modification of software at OCC to accommodate new RTUs and
installation of software in RTUs at Baranagar and Dakshineswar,
(6) System check, testing and commissioning of SCADA for full control,
protection, telemetering including data logging,
(7) Supply and commissioning of LCD screen with accessories at Re-
mote Control Centre,
(8) Freight and insurance.
2.3 The Applicant submits that it is evident from the Technical Offer
(refer to Annexure D to the Application) that the supply involves designing, en-
gineering, manufacturing, site installation, cable laying, erection, testing, com-
missioning etc. The contract, therefore, involves supply of both goods and ser-
vices. RVNL will release 30% of the payment only after the erection and commis-
sioning are completed. Even the payment for freight and insurance will be made
after the erection work is completed. It is clear, therefore, that the contracts for
supply of goods and that of services are not divisible and the entire contract for
the supply of SCADA is a composite supply of goods and services.
2.4 The Applicant further submits that erection and commissioning of
RTUs at a specified location for a metro project is a work of permanent nature.
The cables laid cannot be shifted without causing substantial damage. Such shift-
ing will render such cables incapable of further use. In short, SCADA System
installed is intended to be permanently attached to earth and cannot be removed
without causing substantial damage to the goods attached to earth. Furthermore,
the parts are so interlinked to constitute a functioning SCADA System that none
can be moved separately. The composite supply, therefore, amounts to erection
and commissioning of an immovable property and classifiable as works contract
as defined under Section 2(119) of the GST Act. In support of its argument the
Applicant refers to the Apex Court’s judgment in Solid and Correct Engineering
Works [2010 (252) E.L.T. 481 (S.C.)], Virdi Brothers [2007 (207) E.L.T. 321 (S.C.)],
TTG Industries Ltd. [2004 (167) E.L.T. 501 (S.C.)] and Triveni Engineering & Indus-
tries Ltd. [2000 (120) E.L.T. 273 (S.C.)]. The Applicant also refers to a decision of
the Appellate Authority for Advance Ruling, Rajasthan, in the case of RFE Solar
Pvt. Ltd. [2019 (23) G.S.T.L. 378] and several rulings of the Authority for Advance
Rulings at different States.
2.5 The Applicant submits that the works contract referred to above is
‘original work’ within the meaning of clause 2(zs)(ii) of Notification No. 12/2017-
Central Tax (Rate), dated 28-6-2017, as amended. In support of its argument, the
Applicant refers to the ruling of the Authority for Advance Rulings, New Delhi,
in the matter of Hyundai Rotem Company [2016 (46) S.T.R. 801 (A.A.R.)] under the
service tax regime.
2.6 The Applicant finally submits that the supply of the above compo-
site supply of works contract as ‘original work’ to RVNL qualifies as a supply to
railways and, therefore, eligible for GST under Entry 3(v)(a) of the Rate Notifica-
tion.

GST LAW TIMES  23rd April 2020  289