Page 149 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] IN RE : HALLIBURTON OFFSHORE SERVICES INC. (DRILL BITS) 363
goods and are eligible to be declared as local goods. [Ref. : Minerals
& Metal Trading Corporation (supra)].
6.15 In view of the above, it is submitted that any transaction in relation
to the imported goods, which takes place after the goods become part of the gen-
eral mass of goods within India, is an independent transaction, and is liable to be
separately taxed to GST. Thus, there are two supplied involved in the transaction
of import of drill bits for supply to ONGC’s location on consumption basis.
7. In light of the above, it is submitted that the Customs Notification
and EC dated 19 July, 2016 is qua the importer and imported goods only. Even
the subject of the EC reads as ‘Essentiality Certificate for import of goods...’. Fur-
ther, the EC dated 19 July, 2016 is addressed to the Deputy Commissioner of
Customs only.
7.1 For availing benefit under domestic notification, it is necessary that
the EC must be addressed to the Deputy Commissioner/Assistant Commissioner
of Central Tax or Deputy Commissioner/Assistant Commissioner of State Tax,
having jurisdiction over the supplier of goods. Under the Customs Notification,
the EC must be produced by the importer of goods (i.e. the Applicant). Under the
domestic notifications, the EC must be produced by the recipient of goods (i.e.
ONGC). Accordingly, the separate transaction of indigenous movement of drill
bits from the port of import to ONGC’s location would not be eligible for the
concessional rate of duty provided under Serial No. 404 of Notification No.
50/2017-Cus., dated 30 June, 2017.
7.2 Thus, for availing the benefit under domestic notification, it is nec-
essary that the EC must be addressed to the Deputy Commissioner/Assistant
Commissioner of Central Tax or Deputy Commissioner/Assistant Commissioner
of State Tax, having jurisdiction over the supplier of goods. Accordingly, it is
submitted that the applicant would be eligible to charge GST on the separate
transaction of indigenous movement of drill bits from the port of import to
ONGC’s location at the concessional rate of tax provided under Notification No.
3/2017-Central Tax (Rate), dated 28 June, 2017.
8. Discussion and findings :
8.1 We have examined the issues raised in the application. The taxabil-
ity and the applicable rate of tax for the goods and services supplied or to be
supplied, as governed under the provisions of respective GST Acts are examined.
8.2 In view of the submission made by the applicant we find that the
basic issue before us is whether the import of drill bits for supply to ONGC at its
location in India on consumption basis involves two supplies namely, Import
into India of drill bits; and indigenous movement from the port of import to
ONGC’s location; and if two supplies are involved in the abovementioned trans-
action then whether two Essentiality Certificates (‘EC’) are required to be issued
for availing benefits with respect to concessional duties of IGST and CGST.
8.3 It is a self-asserted and admitted fact on record that the applicant,
under a contractual obligation, is required to import drill bits by themselves as
an importer and undertake to supply drill bits to the delivery location of ONGC
on consignment basis i.e. sale on approval basis. For the following reasons and
the legal proposition, activity of import and subsequent supply of drill bits by
the applicant to ONGC does not qualify as one single supply.
8.4 In terms of Section 7(2) of the Integrated Goods and Services Tax
Act, 2017, the supply of goods imported into the territory of India, till they cross
the customs frontiers of India, shall be treated to be a supply of goods in the course
GST LAW TIMES  20th August 2020  149