The Karnataka Authority of Advance Ruling (AAR) ruled that 12% GST on setting up of FGD plant and 18% GST on Operation & Maintenance of the Flue Gas Desulphurisation (FGD) plant.
The applicant, M/s Shapoorji Pallonji and Company Pvt. Ltd. submitted that they are engaged in the construction business and providing works contracts services to various customers including the Government, Public Sector Undertakings, Government Entities and Private Sector entities. The applicant got the order from M/s Raichur Power Corporation Limited , on winning the tender, for setting up of Wet Limestone Flue Gas Desulphurisation and operation & maintenance of the said plant. The applicant stated that they have initiated the work for setting up of the FGD plant; received the mobilization advances from M/s RPCL & discharged GST at rate of 12% on the said advances.
The applicant has sought the advance ruling on the issue whether the combined service of setting up of Wet Limestone FGD plant and operation & maintenance be considered as a composite supply. Yet another issue was in respect of GST rate and SAC or HSN.
The coram of Dr. M.P.Ravi Prasad and T.Kiran Reddy held that the combined service of setting up of Wet Limestone FGD plant and operation & maintenance of the said plant cannot be considered as a composite supply.
“The setting up of FGD plant merits classification under SAC 995429 and attracts GST at the rate of 12%, in terms of entry No.3(iv)(e) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Further the Operation & Maintenance of the FGD plant merit classification under SAC 9985, as “Business Support” service and attracts GST at the rate of 18%, in terms of entry No.23(ii) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017,” the AAR said.
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