Court :
Rajasthan AAAR
Brief :
The Rajasthan AAAR, in In re ION Exchange (India) Ltd., [Order No. RAJ/AAAR/6/2023-24 dated December 20, 2023] upheld the Ruling dated September 15, 2021 the AAR for Rajasthan, classifying the services provided by the Appellant under an Engineering, Procurement, and Construction (EPC) contract with M/s Vedanta Limited under SAC Heading No. 9954. The Appellant's arguments regarding the inclusive nature of the services covered under Heading 9986 were also dismissed.
Citation :
Order No. RAJ/AAAR/6/2023-24 dated December 20, 2023
The Rajasthan AAAR, in In re ION Exchange (India) Ltd., [Order No. RAJ/AAAR/6/2023-24 dated December 20, 2023] upheld the Ruling dated September 15, 2021 the AAR for Rajasthan, classifying the services provided by the Appellant under an Engineering, Procurement, and Construction (EPC) contract with M/s Vedanta Limited under SAC Heading No. 9954. The Appellant's arguments regarding the inclusive nature of the services covered under Heading 9986 were also dismissed.
M/s. ION Exchange (India) Ltd. ("the Appellant"), a company engaged in water treatment and waste-water recycling, entered into an Engineering, Procurement, and Construction ("EPC") contract with various industries, including thermal and nuclear power plants, fertilizer factories, refineries, and petrochemical industries, registered under the Central Goods And Services Act, 2017 ("the CGST Act"). The company filed an appeal before the Appellate Authority for Advance Ruling in Rajasthan against the ruling pronounced by the AAR, Rajasthan ("the Respondent") bearingRuling Order No. RAJ/AAR/2021-22/20 dated September 15, 2021 ("the Impugned Order").
The appeal pertains to the classification of services provided under an EPC Contract with M/s. Vedanta Limited. The Appellant contends that the services should be classified under SAC Heading No. 9986 or under SAC Heading No. 9983 of Notification No. 11/2017 Central Tax (Rate) dated June 28, 2017("the CGST Rate Notification"). The Appellant contended that the activities performed are inextricably linked to petroleum operations and should be classified under a specific description rather than a general one. The appeal highlights the omission of a specific entry from the rate notification and the subsequent examination of the other aspects of the ruling concerning the description of the supply based on its nature and classification under the given heading to determine the appropriate rate of tax.
Additionally, the Appellant emphasizes that the scope of the activities covered under Heading 9986 is inclusive and not exhaustive. The Appellant also submitted additional grounds in support of their appeal, including the claim that the order seeks to classify the services provided under a non-existing entry of the rate notification. A personal hearing was held on January 11, 2022, and September 13, 2023, where the Appellant reiterated their submissions and provided additional grounds in support of their appeal. The Appellant also referred to the Rules of Interpretation under the United Nations Central Product Classification ("UNCPC") and the CBIC Circular 114/33/2019-GST dated October 11, 2019, to support their arguments.
Aggrieved by the AAR's Impugned Order, the appellant filed an Appeal under Section 100 of the Central Goods and Services Tax Act, 2017 ("the CGST Act") read with Section 100 of the Rajasthan Goods and Services Tax Act, 2017 ("the RGST Act") before the Appellate Authority for Advance Ruling, Rajasthan.
Whether the supplies in pursuance of the EPC Contract classifiable under SAC as contended by the appellant or AAR?
The Rajasthan AAAR, in Order No. RAJ/AAAR/6/2023-24, held as under:
LIVE Course on Foreign Exchange Management Act (FEMA)(with recording)
LIVE Form 10 B and Form 10BB: Handle Tax Audit Reports of Charitable Organizations(with recording)