Page 74 - GSTL_20th August 2020_Vol 39_Part 3

288 GST LAW TIMES [ Vol. 39
ply of services [as raised/contemplated by the Applicant], the undersigned pro-
ceed to examine as to whether the said incidence or activity be classified as ‘Sup-
ply of Goods or not’ - including the main aspect whether it falls within the mean-
ing of supply or not. Accordingly, reference is drawn to the legal frame work for
the concept of supply and the meaning of goods/Service under the CGST Act,
2017 and the Rules made thereunder :
Section 2(52) and Section 2(102) of the CGST Act, 2017 defines ‘Goods’
and ‘Services’ respectively as under :
‘Goods’ means every kind of movable property other than money and secu-
rities but includes actionable claim, growing crops, grass and things at-
tached to or forming part of the land which are agreed to be severed before
supply or under a contract of supply - Section 2(52)
‘Services’ means anything other than goods, money and securities but in-
cludes activities relating to the use of money or its conversion by cash or by
any other mode, from one form, currency or denomination, to another
form, currency or denomination for which a separate consideration is
charged -Section 2(102)
7.7 Sub-section (1) of Section 7 of the CGST Act, 2017 gives an inclusive
definition to expression ‘Supply’, which reads as under :
(a) all forms of supply of goods or services or both such as sale, transfer
barter exchange, licence, rental lease or disposal made or agreed to be made
for a consideration by a person in the course or furtherance of business”
7.8 By virtue of powers vested under sub-section (3) of Section 7 of the
CGST Act, 2017, the Government, on recommendations of the Council, specify by
a notification, the transactions that are to be treated as ‘supply of goods and not
as a supply of services’ or ‘a supply of service and not as a supply of goods’, Fur-
ther, under sub-section (2) of the Section 7 ibid [notwithstanding anything con-
tained in sub-section (1)], the activities or transactions specified in Schedule-III
shall be treated neither as supply of services nor a supply of goods. It is observed
that the activities of the applicant (on which they sought advance ruling) under
the subject contract did not figure in the list of activities or transactions as noti-
fied in Schedule-III. Therefore, the subject activity or transaction shall constitute
a supply under sub-section (1) of Section 7 of the Act ibid inasmuch as the said
activity or transactions is for a consideration and in the course of or furtherance
of business.
7.9 It is observed that under Clause (31) of the Contract, the Contractor
(herein the Applicant) receives reimbursement from the Operator (herein the
OIL) for loss of or damage to the down hole equipment and tools. Sub-clauses (a)
and (b) of the said Clause - 31 specifies the amount of reimbursement to be made
to the Applicant. In case of damage of the equipment or tools, such reimburse-
ment shall be repair cost (subject to maximum of the cost of equipment/tools to
be reimbursed in case of the same were lost) and whereas in case of loss of
equipment or tools, the amount to be reimbursed shall be the amount limited to
original cost (F.O.B nearest port) reduced by depreciation at the rate of 10% per
year to be proportioned for each completed month or part thereof subject to max-
imum depreciation of 50%.
7.10 From the facts discussed herein at Para-8(i), it is found that the
equipment/tools are tangible and movable. The amount of reimbursement of
equipment/tools which are damaged beyond repair or loss is at an agreed de-
preciated value of the Original FoB Price of such equipment/tools. Going by the

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