Page 60 - GSTL_13th August 2020_Vol 39_Part 2

146 GST LAW TIMES [ Vol. 39
Drilling Waste Management services for drilling three HPHT Exploratory Wells
in KG Basin Andhra Pradesh.
The applicant had filed an application in form GST ARA-01, dated 19-12-
2019, by paying required amount of fee for seeking Advance Ruling on the fol-
lowing issues, as mentioned below.
4. Questions raised before the Authority :
The applicant filed the present application seeking a ruling from this Au-
thority on the following issues :
(a) Whether the supply of mud engineering services along with supply
of imported mud chemicals and additives provided on consump-
tion basis by the Applicant under the Contract qualify as composite
supply.
(b) If answer to Para (a) is yes, then whether the supplies made under
the Contract merits classification under Entry 9986(ii) - Service of
exploration, mining or drilling of petroleum crude or natural gas or
both and subject to GST at the rate of 12%/18% as the case may be.
(c) If the answer to Para (a) is no, then whether such supply of mud
chemicals and additives on consumption basis at OIL India’s loca-
tion in India provided under the Contract qualify for concessional
GST rate of 5% against an Essentiality Certificate (EC) under Notifi-
cation No. 50/2017-Cus., dated 30 June, 2017.
On Verification of basic information of the applicant, it is observed that the ap-
plicant falls under Central jurisdiction, i.e. Superintendent, Ramanayyapeta
Range Kakinada CGST Division. Accordingly, the application has been forward-
ed to the jurisdictional officer and a copy marked to the State Tax authorities to
offer their remarks as per the Sec. 98(1) of CGST/APGST Act, 2017.
In response, remarks are received from both Central and State jurisdic-
tional officers concerned stating that there are no proceedings lying pending or
passed relating to the applicant on the issue, for which the Advance Ruling
sought by the applicant.
5. Record of personal hearing :
Sri Shyam Sundar Bangaru, the authorized representative appeared for
Personal Hearing on 19-12-2019 and they reiterated the submission already made
in the application.
6. Applicant’s interpretation of law and facts :
6.1 In the present case, the Applicant has entered into the Contract to
provide a wide range of oilfield services viz. mud engineering services, operation
and management of mud plant services, drilling waste management services,
waste management and fluid management services, etc. As the above listed sup-
plies are made under a single Contract, to determine the rate of GST applicable
on each supply (i.e. in this case, supply of mud engineering services, mud chemi-
cals, additives, etc.), it is essential to determine whether such supplies would be
classified as composite supply or independent supplies.
6.2 For this purpose, the Applicant is required to design, formulate and
perform engineering services using its engineers, operators and technology. Fur-
ther, the Applicant is also required to supply drilling mud, completion fluids,
chemicals and additives to be used for performing services. The mud chemicals
and additives are supplied on regular basis by the Applicant to maintain ade-
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