Page 145 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] IN RE : HALLIBURTON OFFSHORE SERVICES INC. (DRILL BITS) 359
- one for import of drill bits into India under Serial No. 404 of
Notification No. 50/2017-Cus., dated 30 June, 2017; and
- another for indigenous movement under Notification No.
3/2017-Central Tax (Rate), dated 28 June, 2017 respectively.
(c) If answer to (a) above is no then whether the supply of drill bits to
ONGC in India will be covered by Serial No. 404 of Notification No.
50/2017-Cus., dated 30 June, 2017 (i.e. under single EC) and no two
separate ECs are required.
On verification of basic information of the applicant, it is observed that the appli-
cant falls under Central Jurisdictional Officer, i.e. Superintendent, Rama-
nayyapeta Range Kakinada CGST Division. Accordingly, the application has
been forwarded 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 with
ONGC to provide a wide range of oilfield services. Under the Contract, the Ap-
plicant is required to import drill bits from Halliburton Energy Services Inc. USA
(HESI) and the applicant acts as an importer on record. The invoice issued by
HESI reflects the applicant as Consignee and ONGC as the Ultimate Consignee.
6.2 As mentioned, the applicant imports drill bits (classified under
HSN 8207 19 00) on payment of customs duty at the rate of 5% (i.e. BCD - 0% and
IGST - 5%) in terms of Notification No. 50/2017-Cus., dated 30 June, 2017 and
subject to fulfillment of the applicable conditions. Post import, drill bits are sup-
plied to the delivery location of ONGC on consignment basis, i.e., sale on ap-
proval basis. As per the terms of the Contract, the applicant is responsible for
transportation and insurance till such drill bits are delivered at ONGC’s location.
Once drill bits are delivered at the ONGC’s location, such drill bits are stored in
ONGC’s storage space till the time the same is used/consumed/returned by
ONGC.
6.3 In respect of the imported drill bits supplied by the applicant to
ONGC, the said drill bits are supplied on consignment basis i.e. sale on approval
basis. The aforesaid position of sale on approval basis in the case of the applicant
is explained below :
6.3.1 Section 24 of the Sale of Goods Act, 1930 deals with “Goods sent
on approval or ‘on sale or return’” and reads as below :
“24. Goods sent on approval or “on sale or return”. - When goods are de-
livered to the buyer on approval or “on sale or return” or other similar
terms, the property therein passes to the buyer -
(a) when he signifies his approval or acceptance to the seller or does any
other act adopting the transaction;
(b) if he does not signify his approval or acceptance to the seller but re-
GST LAW TIMES  20th August 2020  145