Page 73 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] IN RE : HALLIBURTON OFFSHORE SERVICES INC. (LIH) 287
under Entry-6 of Schedule-II’, there must be transfer of goods involved in the
activity. By their own submission and admission, the activity under question
cannot be a ‘works contract service as there is no transfer of goods involved.
7.5(iii) The Applicant had given detailed submissions with analysis
and inter alia drew attention to specific references to FAQs on ‘Government Ser-
vices’ issued by the Directorate General of Taxpayer Services (DGTS) {Question :
18 of FAQ} and to an Advance Ruling given by the Maharashtra Authority in Re :
Maharashtra State Power General Company Ltd. [2018 (13) G.S.T.L. 177 (A.A.R. -
GST)] and Appellate Authority’s Ruling on the said Advance Ruling under RE:
[2018 (17) G.S.T.L. 451 (App. A.A.R. - GST]. And whereby the Applicant has giv-
en his conclusion that ‘reimbursement of LIH equipment/tools’ may be classifia-
ble as service under Entry-5(e) of Schedule-II of the CGST Act, 2017 i.e. as “service
viz agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or
to do an act’.
7.5(iv) It is a settled law that any Advance Ruling given by an authority
is applicable and has an effect in the matters relating to the individual applicant
only. As a matter of principle, the Ruling in a particular issue and an applicant
cannot be made applicable to issue of a different person, as a right. It is also set-
tled principle that the ratio of the judgments of the Hon’ble Courts/the Tribu-
nals/the Appellate Authorities or for that matter clarification by the authorities -
may be made applicable subject to facts and circumstances of each case .The un-
dersigned examined the facts and circumstances discussed m the cited references
as well the facts and circumstances of the present case.
7.5(v) It has been submitted by the Applicant {at Para-21 of Exhibit-III}
that ‘..event of LIH is entirely contingent and outside the normal stream of supplies un-
der the Agreement..’. Reference is drawn to submissions of the Applicant made
under Para 31 of Exhibit-III specifically to Paras-31.1 to 31.4. The Applicant by
their own submissions admitted that “..In case of any breach of the Contract on the
part of the Applicant, including by way of delay, there are liquidated damag-
es/compensation agreed upon between the parties in terms of clauses of the contract..”. It
was also a self-confessed submission made by the Applicant at Para 31.4 of the
Exhibit-III as under :
“Separately, given the nature of the scope of work to be carried out, there is
a possibility of accidents occurring, whereby certain the equipment/tools
owned by the Applicant may be irretrievably lost during operations. In
such a case there is a pre-agreement between the parties, that LIH equip-
ment will be compensated by ONGC, in terms of a formula based on the
depreciated value of the equipment/tools which have been lost.”
7.5(vi) From their own self-proclaimed submissions [as detailed herein
at paras 5(iv) and 5(v)] contingency of ‘reimbursement of LIH Equipment/Tools’
is entirely different from liquidated damages/compensation for any breach of
contract (including delay) as agreed upon between the parties. Therefore, under
the facts and circumstances of the present case (under mutually agreed terms
and conditions of the Contract) it is ample clear that ‘reimbursement of LIH
Equipment/tools’ cannot be collate with the activity of ‘agreeing to the obligation to
refrain from an act, or to tolerate an act or a situation or to do an act’. And accordingly,
the said activity of ‘reimbursement of LIH Equipment/tools’ did not merit classi-
fiable as Service under Entry 5(e) of Schedule-II to the CGST Act, 2017.
7.6 Having negated possible or probable classification of the event of
‘reimbursement of LIH equipment/tools by the Customer’ under category sup-
GST LAW TIMES  20th August 2020  73