Page 156 - GSTL_23rd July 2020_Vol 38_Part 4

522 GST LAW TIMES [ Vol. 38
transfer of title in goods in which various elements are so inextrica-
bly linked that they essentially form one composite transaction.
23. We have gone through the draft contract in question in detail.
We find that the scope of the contract is that the contractor shall
supply all the equipment as per the terms of the contract in accord-
ance with the Execution Schedule. The terms “Equipment” has been
defined in Para 1.1.39 to mean and include all the equipment and
major equipment along with its associated accessories, conductors,
electrical cables, instruments, apparatus and other
items/equipment required to be supplied by the contractor for
completing and integrating the SPP, as per the Technical Specifica-
tion, excluding Free Issue Equipment (Emphasis supplied). In terms of
Para 1.1.45 “Free Issue Equipment” means Photovoltaic Modules to
be supplied by the owner to the contractor, as a free issue equip-
ment at the Plant site for the installation and commissioning of the
SPP. The obligations of the owner in terms of Para 4 of the contract
include providing for insurance required for Free Issue Equipment,
third party/public liability insurance and insurance required for its
representative, engineers and labours until completion of its obliga-
tions under this contract. In terms of Para 9 of the contract, the
owner agrees to provide Free Issue Material as agreed between the
parties. The said material would be over and above the Plant being
supplied by the contractor under this contract. The owner shall be
responsible for transportation of Free Issue Equipment from the
point of origin till the Plant site and in this regard, the owner shall
remain solely liable, including in respect of any damage during
transit. Further, in terms of Para 15.3, the contractor shall, on arrival
of the Free Issue Equipment at the Plant site, shall be entitled to in-
spect the Free Issue Equipment at the Plant Site and notify the own-
er in writing, detailing the defects of such inspection. The Owner
shall correct/rectify the defects detailed in the contractor’s notice by
causing to repair or replacing the defective Free Issue Equipment.
Whereas it is apparent from the terms of the draft contract as indi-
cated above, that, in the instant case, the appellant has vivisected
the contract in the initial stage itself into two parts i.e., first a supply
of the PV module which constitutes about 60-70% of the value of
the contract and then the second part for the supply of the remain-
ing parts and components and services.
24. The first part of the supply is done by purchasing from a for-
eign supplier the PV module and transferring the title of the said
PV module on High Sea Sales basis to the owner of the project. The
Project owner clears the PV module through the Customs and
makes available the same to the contractor (Appellant) without con-
sideration at the project site. The appellant have argued that the
above modus is merely undertaken for commercial reasons since it
is the project owner who is eligible for customs duty exemptions
and therefore, the PV module although has been identified and ar-
ranged for purchase by the appellant, the same has been actually
procured and imported by the other contracting party. We find that
the reason for this modus, though compelling is not the relevant to
the issue at hand. What is relevant is that the appellant having re-
sorted to such a structuring, has the effect of making the supplies
effected in this instance to have been effected in at least three clear
and distinct stages.

GST LAW TIMES  23rd July 2020  156