Whether the details of tax rates listed under GST Notification dated 28th June, 2017 Rule, entry 3 (V) was applicable to the works of Rail Vikas Nigam Ltd. (RVNL) like those of construction, erection, commissioning, or installation and others of Superviso

PJ/Case Law/2019-2020/3549

Case- ABB lndia Ltd (GST AAR West Bangal)
Citation-Order No. 47/WBAAR/2019-20
Facts of the Case-The applicant, ABB India Ltd. is involved in electrification, motion and robotics, data management, industrial automation, production control, and various other technological and system solutions.
Rail Vikas Nigam Ltd. (RVNL) has awarded it the contract for extension of Supervisory Control and Data Acquisition (SCADA) for Noapara Dakshineswar Metro Corridor.

Issue-Whether the details of tax rates listed under GST Notification dated 28th June, 2017 Rule, entry 3 (V) was applicable to the works of Rail Vikas Nigam Ltd. (RVNL) like those of construction, erection, commissioning, or installation and others of Supervisory Control and Data Acquisition (SCADA)?
Contentions by Applicant-The Applicant submits that it is evident from the Technical Offer that the supply involves designing, engineering, manufacturing, site installation, cable laying, erection, testing, commissioning etc. The contract, therefore, involves supply of both goods and services. RVNL will release 30% of the payment only after the erection and commissioning are completed. Even the payment for freight and insurance will be made after the erection work is completed. lt is clear, therefore, that the contracts for supply of goods and that of services are not divisible and the entire contract for the supply of SCADA is a composite supply of goods and services.
SCADA System installed is intended to be permanently attached to earth and cannot be removed without causing substantial damage to the goods attached to earth. Furthermore, the parts are so interlinked to constitute a functioning SCADA System that none can be moved separately. The composite supply, therefore, amounts to erection and commissioning of an immovable property and classifiable as works contract as defined under section 2(119) of the GST Act.
ln support of its argument the Applicant refers to the apex court's judgments in Solid and Correct Engineering Works [(2010) 252 ELT 481 (SC)], Virdi Brothers [(2007) 207 ELr 321 (SC)], TTG lndustries Ltd [(2004) 167 ELT 501 (SC)] and Triveni Engineering & lndustries Ltd [(2000) 120 ELT 273 (SC)]. The Applicant also refers to a decision of the Appellate Authority for Advance Ruling, Rajasthan, in the case of RFE Solar Pvt Ltd [(2019) 23 GSTL 378] and several rulings of the Authority for Advance Rulings at different states.
The Applicant submits that the works contract referred to above is 'original work' within the meaning of clause 2 (zs) (ii) of Notification No. 1212017 - Central Tax (Rate) dated 2810612017, as amended. ln support of its argument, the Applicant refers to the ruling of the Authority for Advance Rulings, New Delhi, in the matter of Hyundai Rotem Company [(2016) 46 STR 801 (AAR)] under the service tax regime.
The Applicant finally submits that the supply of the above composite supply of works contract as 'original work' to RVNL qualifies as a supply to railways and, therefore, eligible for GST under Entry 3 (v) (a) of the Rate Notification.

Decision-It is, therefore, a power supply and distribution network installed for the purpose of the operation of the metro. It, therefore, is a supply pertaining to railways, including metro, as defined under section 2 (31) (c) of the Railways Act, 1989. AAR ruled that the applicant is making a composite supply of works contract taxable under Entry No. 3 (v) (a) of Notification No. 11/2017 — Central Tax (Rate) dated 28/06/2017 (State Notification No. 1135-FT dated 28/06/2017), as amended, being erection, commissioning and installation of original work pertaining to railways, including metro.

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PJ/Case Law/2019-2020/3549

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