"WEST BENGAL APPELI-,ATE AT I4,BELIAGHATA AUI'I{ORITY ITOR ADVANCE RULING ROAD, KOLKAI'A-7OOO15 I-! efore: Mr. A.P.S Suri, Member Ms. Smaraki lrlaha patra, NIeral;er In the lnatter of Appeal case No. I O/WBAA.^, R./^. PPEA Ll20 1 g cated 26.0g. 20lg -And- In the matter of: An Appeal filed under Secrion 100(l) of the central Goods and Services Tax Act, 2017 , Ward-8, Chakdah, Na dia-7 41222 Present for the Appellant: Present for the Respondent: tl west Bengal Goods and Services Tax Act, 2017 I by Sri. Ashis Ghosh, old 1042, pratima corner, Sri. Shobharrt..'rrr Bhattacha.' 'a, Advocate. I . Sri. t(ajnuri jt ileena , /,.s.:istant Commissioner, CGST &. CX, Kalyani Divisior, Kolketa North Commissionerate; 2- Sri. Tap.r'r Dritta, Strper,,rtendent, CGST & CX, Kalyani Division, li.;llcata North Courrnissionerate. Matter he::rd cn: 20.11201,-) Date of Ordcr; 2t.11.2019 l' This Appeal has been filed hy Uri. ,'r,,.r:s Ghos;i (hereinafter referred to as ,,the Appellant\") on 26.08.2019 againsr Aciv::rpc Ruling No. 09/wBAAR/2019-20 dated 25.06,2019, pronounced by the Wer;i Be,:;.rl Authority for Advance Ruling (hereinafter referred to as the WBAAR) in the marrcr cf lrls Ashis Ghosh. Page L of 4 t a J. 2. M/s Ashis Ghosh, located at Old 1042, Pratima Corner, Ward-8, Chakdah, Nadia- 741222 holding GSTIN I9AHRPG7?$4MIZ1 pr<-rcured two contracts from N,l/s Mackintosh Burn Limited (hereinafter rcferred to as MBL) for filling in the compound, tank, lowland, etc. with silver sand and earthwork in layers, including spreading and compacting the same at the New Central Correctional Hottte, Baruipur. The Appellant sought an advarrce ruling under section 97 of the West Bengal Goods and Services Tax Act, 2Ol7l the Celrtral Goods and Services Tax Act,2017, (hereinafter collectively referred to as \"the GST Act\") on whether this can be classified as supply of sand (HSN 2505). The WBAAR observed that by the description of the job contained in the work orders, the Appellant was required to fill the for:ndation or plinth by silver sand in layers and consolidate the same by saturation with vrater ramming. The work further involved earthwork fbr filling in the compound, tank, lorvlanci, ditches, etc. with good earth spread in layers, including breaking clods and consolidate the same by ramming and dressing. The WBAAR concluded that the contract is not for supply of goods, but the transfer of property in such goods in the eourse of site preparation for construction of the New Central Correctional Home, Baruipur and thus is s rvorks contract, as defined under section 2(119) of the GST Act. The WBAAR finally held that the Appellant's supply to MBL is works contract service, classiflable as sitc preparation service (SAC Group 99543) and taxable @18% under Serial No. 3(xii) of Notification No. lll20l7-CT(Rate) dated 2810612017 (corresponding State Notification No. 1135-FT dated 2810612017) as amended from time to time (hereinalter referred to as GST Rate Notification). 5. The Appellant has filed the instant Appeal against the above Advance Ruling with the prayer to set aside/modify the impugned Advance Ruling passed by the WBAAR or pass any such further or other orders as rnay be deemed fit and proper in the facts and circumstances of the case on the fbllorving grounds: a) The WBAAR erred in classifying thc supply as supply of services instead of supply of silver sand and earth. b) The WBAAR erred in classifying the supply as works contract, the nature of job being site preparation. The Appellant is not entitled to perforrn any job work like site preparation, designing, engineering rvotks, lneasurements, designs, engineering services which fall under site preparation service c) The Appellant submits that the supply is a cornposite supply as defined under clause 30 of section 2 of the GST Act and the principal supply in this case is supply of silver sand and earth which constitutes over 9091 value of the total work order. d) The WBAAR observed MBt, to be a Statc Government Company and not a government entity as only 51.01% equity shares are held by the State Government. The WBAAR did not consider thc fact that MBL is only the Principal Contractor and 4. Page 2 of 4 6. Principal Contractee is West Bengal Police Housing and Infrastructure Development Corporation Limited (hereinafter referred to as WBPHIDCL) which is a government authority. The Appeal petition was filed on 26.08.2019 against the WBAAR's Ruling dated 25.06.2019 which rvas received by the Appellant on29.06.2019. As per Section 100(2) of the GST Act the Appeal should have been filed within a period 0f thirty days from the date on which the ruling sought to be appealed against is communicated to the concerned applicant. The Appellant submitted petition for condonation of delay in filing Appeal which was taken up for hearing on 12.09.2019. None appeared on behalf of the Respondent and no objection was raised in connection of admission and condonation of delay in filing appeal petition. The delay in filing appeal was condoned and the appeal was adrnitted. During the course of hearing the Appellant reiterated the points as stated in the Grounds of Appeal. He emphasized on the nature of supply being that of composite supply where the principal supply is that of silvcr sand. The service portion involved therein like filling the designated areas with sancl, con)pacting and leveling the same are ancillary to the principal supply. The Appellant's authorized representative argued that the WBAAR in its observation was also satisfied that in terms of total contract value the majorportion was that of value of sand and less than 25Yo of value of contract was that of ser.rice involved. The Appellant referred to Order No. JHR/AAR/2O18-19/01 dated 03.11.201g of the Authority for Advance Ruling, Jharkhand in the matter of M/s p. K. Agarwala where the Authority for Advance Ruling, Jharkhand observecl that the work order being supply of services with material and as lnore than75%o of the value of supply constitutes earthwork, the supply will be taxable under Serial No. 3(vii) of Notification No. 3912017-IGST dated 13.10.2017. The Appellant argued that as nearly 90% of value of supply in the instant case is that of supply of sand it will be principal supply and tax rate ought to be at the rate oftax ofsand. The Respondent submitted that MBL r.vas a commercial company. The Respondent fufther submitted that the nature of supply is not only a composite supply but works contract involving supply of sand, loading and unloading of the same, filling the site with silver sand and ea(h, spreading and compacting and water ramming etc. All these activities were carried out by the Appellant to make a particular land fit for subsequent construction work. The Respondent concluded that in the light of the nature of the job it can be termed as site preparation and merits classification under SAC 9954 and taxable @lS% under GST Rate Notification. 9. The matter is examined and written and oral submissions made before us are considered. I0. \"composite Supply\" as defined under Section 2(30) of the GST Act, means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of 7. 8. Page 3 of 4 gtods or srrviccs or i)otlt. or allv corrrhirraii()n tlrercol. irlriclr arc lroLuraliy bLrnrjlecl anr-l supplic-cl iti r:oitiurrctiort u'ith eacll otirer irr lhc ordirrar-, 1 ct)ursc o1'business, one ot'rvhicl: is a principiil sLrpply,. I'herefbrc. the dellnition implies tlrat a sLrpply oi'uoods and,'or scrviccs rvill [:e trcatcd as conrpr:site suppl;.'iiit {irllllls thc {irllorvirig cliteria: (a) tltcre mu:jt bc suppl),'of t vo or rrlore taxabh supplics 0t'gootls or services ol both. and (!.i llicse tiruds i)r',scr /iccs tlr Lroth lrc llatLrrallv brrncilcrl. 1lr:rt r tt)getlicr irr coniurrction vith c;t':ir *ther in tlie tlrCinlir' 'r(.)ursc ; s per ilre u,trrir oldels issurc,\"l b,v {[i1,, the Appcllant is reqLrilcd to llli in thc {irLrrrdatiorr or plinth by silvcr sand irr lavers nnd i,;linsolitlar.c tir,: slrrrie. Fr.rlLhcr the.iob also invoivcs lLllirrg in tlre corrrpor-rrrcl. lrnk and rithcr loiv lr.,ing arcas u,itlr sanil and 1;ootl earlir rrrr.i consolidatirrg lh,: sarne [rl,raurnring i.lnd dressing. l'i:c activities undcrtaken b1'thc Appellarrt onlount tr: irnprovcrlcrrt ancl modilrcatiorr oi lartd [or ftttLtrc eonstrttction. lrt thc cilcunrstil'rces. it is not ll casc rrf conrl-rositc sLrpply nlieLt: prirrcipzrl :Lrpplv crrtrstitutcs ol sattr-l. as ilrllrlrrtl by,' thc Apylclhnt. but a cirsc ol'llarrslcl ol'prr.rpertl, iir goods it.t coursi: iri' site 1;r'cpirraticirr lirrconstrrrction of thc Nr-ru'flcntrirl L'olrcctiouirl lkriru uI I]aliriptrr\". In vie iv o[' abovc. 'e trrtri no in tlt'tllity in the Arrth()r'it / 1\"or' ; Llvnncc Ruling irr thc rrxlttct' anLI it. ll\"rIirrg, []r'rlnt)t-utrtcd b]- thc iVest Bcrigiit hencc tiierc is no rcas()n to intcr-{'cr-e r ,;1il I'he rppelrl thrrs lails au