Sunanda Enviromental International Private Limited ., In re

FULL TEXT THE ORDER OF AAR WEST BENGAL

A person within the ambit of Section 100 (1) of the Central Goods and Services Tax Act, 2017 or West Bengal Goods and Services Tax Act, 2017 (hereinafter collectively called ^„the GST Act’), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Tax Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned in the proviso to Section 100 (2) of the GST Act.

Every such appeal shall be filed in accordance with Section 100 (3) of the GST Act and the Rules prescribed there under, and the Regulations prescribed by the West Bengal Authority for Advance Ruling Regulations, 2018.

1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression “GST Act” would mean the CGST Act and the WBGST Act both.

1.2 The applicant is awarded several contracts, related to Jal Jeevan Mission (JJM), from Public Health Engineering Directorate, Govt. of West Bengal (PHED). The contracts are of two types, one type of contract is for supply of service only and another type of contract for combined supply of goods and service.

1.3 The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under seeking an advance ruling in respect of following questions:

(1)Whether the Contract of Services for (i) Operation & maintenance, regular upkeeping, upgradation of secure Server/Dashboard, water quality applications for data collection, alert generation system and engagement of consultant for coordination, (ii) Operation of water testing laboratories without any supply of goods, (iii) Engagement of consultancy agency for setting up of District Project Management Unit, (iv) Regular upkeep and management of FTK mobile application and web Interface of Water Quality Integrated to State Water Quality Dashboard and maintaining database and (v) Other contracts only for services can be construed as Pure services and exempted from payment of tax vide Serial number 3 of the Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017, as amended?

(2)Whether the contract for (i) Annual maintenance of Mobile Laboratory Van under Water Quality Monitoring and Surveillance Programme, with supply of consumables for the testing of water samples, (ii) Regular preventive upkeep & calibration of On-site Mobile Analysis System installed in various laboratories with supply of spare parts, (iii) Supply & distribution of portable multi-parameter water quality testing device and facilitating block level training/orientation program on testing, awareness generation etc., (iii) Supply and delivery of consumables for water quality monitoring through OMAS including packing and distribution to different laboratories and collection of sample testing as well as uploading of test result in State Water Quality Dashboard, (iv) Supply of Spare Parts including Calibration & regular upkeep of OMAS and (v) Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of IEC leaflets and design on JJM be construed as composite supply?

(3)If Answer to the Q2 is “Yes”, Whether the Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply be exempted from payment of tax vide Serial number 3A of the Notification No. 2/2018 – Central Tax (Rate) dated 25.01.2018 amendment to the mother Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017.

(4)If Answer to the Q2 is “No”, Whether the Composite supply of goods and services be treated as supply of “Composite Supply” u/s 2(30) of GST Act and the tax liability to be determined as exemption/rate applicable for principal supply.

(5)If Answer to the Q4 is “Yes” i.e. composite supply u/s 2(20) of CGST Act, which one shall be treated as “Principal Supply”, Major item of Supply part or Service part for determination of rate for tax liability.

1.4 The aforesaid questions on which the advance ruling is sought for are found to be covered under clause (a) and (b) of sub-section (2) of section 97 of the GST Act.

1.5 The applicant states that the questions raised in the application have neither been decided by nor are pending before any authority under any provision of the GST Act.

1.6 The officer concerned from the Revenue has raised no objection to the admission of the application.

1.7 The application is, therefore, admitted.

2.Submission of the Applicant

2.1. The applicant is awarded several contracts, related to Jal Jeevan Mission (JJM), from Public Health Engineering Directorate, Govt. of West Bengal (PHED). The stated contracts are described hereunder:

(a)Work order for regular upkeeping, upgradation of all water quality applications for data collection, alert generation system for contaminated sources, stock & faulty instruments and onsite sanitary survey data, integrated with Water Quality Management Information System (WQMIS) structure through cloud based secured survey, data repository system and engagement of efficient manpower for resources monitoring & management of water quality in drinking water sector for all districts of West Bengal for the period of 12 months. (Ref. Memo No. 781/RS dated 07.03.2024).

(b)Work order for Annual Maintenance for Mobile Laboratory Van (MLV) under Water Quality Monitoring and Surveillance Programme related to Jal Jeevan Mission in the

District of South 24 Parganas under Alipore Division, PHE Dte. Scope of order includes the supply of consumables for the testing of samples w.r.t. parameters Irons, Manganese, Fluoride, Arsenic, Total Hardness, Residual Chlorine, Total Coliform & Thermotolerant Coliform. (Ref. Memo No.1992/AD dated 09.04.2024).

(c)Work order for operation of water testing 6 nos. laboratories at Balarampur, Burdwan, WTP Sub-District water testing Laboratory & Hura, Jhalda-I, Kashipur, Baghmundi Sub District Water Testing laboratory under RWS Purulia Sub-Division PHE Dte. (Ref. Memo No. 1215A/PD dated 28.06.2024).

(d)Work order for regular preventive upkeep & calibration of On-site Mobile Analysis system (OMAS) installed in various Water Testing Laboratories of PHE Dte, Govt. of West Bengal. Scope of order includes the supply of Spare Parts for this works. (Ref. Memo No. 678/RS dated 28.02.2024).

(e)Work order for engagement of consulting agency for setting up of District Project Management Unit (DPMU) at Purba Mednipur, Paschim Mednipur, Jhargram, Bankura and Purulia under Jal Jeevan Mission/Jal Swapna. (Ref. Memo No. 700/RS dated 01.03.2024).

(f)Work order for supply & distribution of portable multi-parameter water quality testing device (Field Test Kits) to each BMOH and facilitating block level training/orientation program on testing, awareness generation & data integration from the field both online/offline through monitoring & reporting on water safety status of rural drinking water sources district of West Bengal. (Ref. Memo No. 2789/RS dated 06.11.2024).

(g)Work order for Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of 6 types of IEC leaflets and design on JJM, provision on legal provision damage or illegal connection of PWSS, safe handling & storage of safe water quality issues, water conservation and WASH related issues as per operational guideline of JJM and preparation of web based Digital (A/V) training material (Bengali) at Howrah District. (Ref. Memo No. 799/HD dated 20.02.2024).

(h)Work order for on-site assessment with sample collection & testing of AIRPs, CWPPs & Water ATM including supply & delivery of 7 New On-site Mobile Analysis System (OMAS) with 38352 consumables for testing Arsenic, Iron, Manganese & Residue Chlorine in addition to monitoring & processing data of AIRPs, CWPPs, Water ATM for precise analysis and evaluation of the plants and upload the data to the State Water Quality Dashboard segment hosted in PHE Web portal. (Ref. Memo No. 1582/RS dated 07.06.2024).

(i)Work order for supply and delivery of consumables for Water Quality Monitoring through On-Site Mobile Analysis System (OMAS) for drinking water testing in Untouched Habitations Schools, Anganwadis, and Health Facilities throughout the state related to Water Quality Monitoring and Surveillance under JJM. The scope of the work includes packing of consumables, supply to different laboratories and collection of sample, testing & uploading of test result in State Water Quality Dashboard. (Ref. Memo No. 1575/RS dated 07.06.2024).

(j)Work order for regular upkeep and management of FTK mobile Application (Android Version) and Web Interface of Water Quality Data Integrated to State Water Quality Dashboard, Generating Results, Reports, Graph and Summary, Maintaining database on a regular basis in the State of West Bengal under PHED. (Ref. Memo No. 2317/RS dated 30.08.2024).

(k)Work order for supply of Spare Parts including Calibration & regular upkeep of On-site Mobile Analysis System (OMAS) used for drinking water quality monitoring in arsenic & Iron Removal Plants (AIRPs) related to Water Quality Monitoring & Surveillance under JJM. (Ref. Memo No. 1601/RS dated 10.06.2024).

2.2 Other type of works of where PHED normally invites for tender quotation and the applicant may participate in future are:

• Engagement of Third Party Inspection Agency for quality and quantity monitoring of Rural supply scheme.
• Providing comprehensive support service for data centre & networking hardware, redhat server operating system enhancement and maintaining office web portal.
• Development document archival software.
• Engagement of implementation support agency.
• Comprehensive technical support with dedicated software manpower.
• Project implementation & functioning support of domain.
• Providing SSL Certificate for Domain and sub-domain and cloud base videoconferencing software.
• Consulting support for DPR.
• Guarding arrangement for store.

Scope of the works which are not described in the works details:  

2.3 Regular upkeeping, upgradation of all water quality applications

• Operation & Maintenance of secure Server/Dashboard to manage all the water quality data across all districts within West Bengal.
• Upkeeping, upgradation and modification of Water Quality Dashboard.
• Upgradation, modification & upkeeping of Mobile application and Desktop application for better utility and management.
• Overall coordination, supervision and data management.
• Monitoring & upkeeping of an SMS alert system.
• Engagement of District Consultants for coordinating the work related to water qualitymonitoring.
• Documentation and report submission periodically.
• Conducting meetings involving Water Quality team to discuss short comings based on evolution report of each District Consultant, attending meetings at District Level and
• Headquarters and attending training programmes at District/Panchayat level.

2.4 Regular Annual Maintenance of Mobile Laboratory Van (MLV)

• Providing lab technician, driver cum lab attendance.
• Supply for fuel required for mobile van.
• Supply of consumables for testing of 1000 samples w.r.t. parameters- Iron, Manganese, Fluoride, Arsenic, Total Hardness, Residual Chlorine, Total Coliform & Thermotolerant Coliform.

2.5 Regular preventive upkeep & calibration of On-site Mobile Analysis system

• The work included Comprehensive Annual Maintenance Contract of On-site Mobile Analysis System (OMAS) installed in 77 Water Testing Laboratories. Work also includes preventive maintenance & calibration of OMAS at the laboratories for upkeep of the systems for 12 months.
• The agency must have a pool of competent technician to attend breakdown calls within 48 hrs. after receiving of complain.
• Visits to various PHED laboratories where the OMAS are stationed across the Districts of West Bengal and repair non-functional OMAS & calibrate the same on quarterly basis.
• All Regular or On-Call Details will be done through PHED Fault Booking System, controlled through PHED Water Quality Application.
• The repairing job shall normally be done during working hours and in case of emergency, job may have to be done beyond office hours.
• As far as possible, the repairs would be carried out on-site itself. However, in case the parts are not repairable, the bidder should replace the defective parts with new ones. Repairing includes necessary repairs to the installed systems and replacement of defective/damaged parts, components and other accessories.
• The Bidder has to supply the parts as per Schedule of Work. Equipment parts replaced must be new and equivalent in performance of the existing parts. In the event of obsolescence, items may be replaced by equivalent capacity. In this scenario the parts may be replaced at a price quoted in the Schedule of Work.
• Billing of parts should be done on ACTUAL BASIS and should not exceed the quoted quantity. Prior approval from PHED should be taken before replacing the parts with new one.
• The calibration standard of OMAS supplied by the agency would be received only if found to be in good condition & certified by Executive Engineer or his authorized representative at the time of receipt as per specified format.
• Representative from the agency should attend all meetings as directed by the Department regarding OMAS related issues, take note of the discussions and act upon the decisions taken on priority basis.

2.6 Engagement of consulting agency for setting up of District Project Management Unit (DPMU) – Supply of manpower

• Key/Non-Key Experts & Supporting Staff and Reimbursable Expenditures for functioning of the DPMU.
• Key Experts Technical team Leader cum Water Supply Engineers
• Procurement cum Contract Management Specialist (Deputy Team Leader)
• Project Management & Monitoring Specialist
• Non-Key Experts IEC and Capacity Building Specialist
• Data Analytics and MIS Specialist
• Supporting Staff Data Entry Operator cum Office Assistant
• Reimbursement of travelling/office expenses

2.7 Supply & distribution of portable multi-parameter water quality testing device (Field Test Kits and facilitating block level training/orientation program

• Supply of Field Test Kits (FTK) to Facilitate Water Sources Testing at Gram Panchayat Level
• Supply of bag for carrying Field Test Kits
• Overall coordination and Logistical support for distribution of FTKs at Gram Panchayat Level in coordination with District Headquarters, time-to-time reporting on any update  of the programme

• Facilitate Field level (Gram Panchayat/ Block Level) Training for all FTK users Panchayat Level

• Facilitation of Data updation to State Water Quality Dashboard and WQMIS

2.8 On-site assessment with sample collection & testing of AIRPs, CWPPs & Water ATM including supply & delivery of New On-site Mobile Analysis System (OMAS) with 38352 consumables

• Supply and delivery of OMAS including 1 year operation & maintenance
• Supply and delivery of 38352 consumables for testing of Arsenic, Iron, Manganese & Residual Chlorine
• The monthly test results of the water quality parameters should be uploaded by the resource personnel to State Water Quality Dashboard on regular basis for real time reflection on the performance of AIRPs, CWPPs & Water ATMs.
• Monitoring and processing data of AIRPs, CWPPs, Water ATMs for precise analysis and evaluation of the plants including maintenance of the same based on availability of data from the department with introduction of new features for better utility of mobile & web application and make the application more user friendly along with preparation of system generated division wise automated analytical report as per hierarchy of the department and sending through email with modification of reporting structure as and when directed by the Engineering in Charge.
• Engagement of one resource person at State level as Water Quality Coordinator for overall coordination, supervision & data management to deliver better quality monitoring work of AIRPs, CWPPs & Water ATMs installed in four Arsenic affected districts for the period of 12 months.

2.9 Regular upkeep and management of FTK mobile Application and Web Interface of Water Quality Data

• Operation and Maintenance of a Secured Server to manage all Water Quality Data and Images through FTK Mobile Applications and Water Quality Dashboard.
• Operation, Maintenance and Upgradation and management of the FTK database on a regular basis to manage all water quality data and Web Interface and FTK Application (Mobile Version) to portray water quality result and reports on a daily basis through a dedicated IT Coordination.

2.10 Supply of Spare Parts including Calibration & regular upkeep of On-site Mobile Analysis System (OMAS) used for drinking water quality monitoring in arsenic & Iron Removal Plants (AIRPs)

• The agency must have a pool of competent to attend breakdown calls within 48 hrs. after receiving of complain.
• Visits to various AIRPs where the OMAS are stationed across the Districts and repair non-functional OMAS & calibrate the same on quarterly basis.
• All Regular or On-Call Details will be done through PHED Fault Booking System, controlled through PHED Water Quality Application.
• Telephonic Registration of Complaint by concerned Executive Engineer or his representative of the respective District or Pump/Valve Operator of the respective AIRPs should also to be noted & acted upon by the agency.
• The repairing job shall normally be done during working hours and in case of emergency, repairing job may have to be done beyond office hours. Prior arrangements through proper communication should be worked out in all cases by the servicing agencies.
•  Response time for attending non-functional OMAS should be not more than 48 hrs. after receiving message from the fault booking system of PHED. The machine to be made functional within 96 hrs. from receiving message through fault booking system of PHED and is to be reported in the PHED system.
•  As far as possible, the repairs would be carried out on site itself. However, in case the parts are not repairable, the bidder should replace the defective parts with new ones. Repairing includes necessary repairs to the installed systems and replacement of defective/damaged parts, components and other accessories.
•  The Bidder has to supply the parts as per Schedule of Work. Equipment parts replaced must be new and equivalent in performance of the existing parts. In the event of obsolescence, items may be replaced by equivalent capacity. In this scenario the parts may be replaced at a price quoted in the Schedule of Work.
•  Billing of parts should be done on ACTUAL BASIS and should not exceed the quoted quantity. Prior approval from PHED should be taken before replacing the parts with new one.
• Representative from the agency should attend all meetings as directed by the Department regarding OMAS related issues, take note of the discussions and act upon the decisions taken on priority basis.

2.11 The scope of works executed/proposed to be executed by the applicant (i) Operation & maintenance, regular upkeeping, updradation of secure Server/Dashboard, water quality applications for data collection, alert generation system and engagement of consultant for coordination, (ii) Operation of water testing laboratories without any supply of goods, (iii) Engagement of consultancy agency for setting up of District Project Management Unit, (iv) Regular upkeep and management of FTK mobile application and web Interface of Water Quality Integrated to State Water Quality Dashboard and maintaining database and (v) Other bare service contracts does not involve any supply of goods. So these supplies of services are construed as Pure Service.

2.12 The scope of works executed/proposed to be executed by the applicant (i) Annual maintenance of Mobile Laboratory Van under Water Quality Monitoring and Surveillance Programme, with supply of consumables for the testing of water samples, (ii) Regular preventive upkeep & calibration of On-site Mobile Analysis System installed in various laboratories with supply of spare parts, (iii) Supply & distribution of portable multi-parameter water quality testing device and facilitating block level training/orientation program on testing, awareness generation etc., (iv) Supply and delivery of consumables for water quality monitoring through OMAS including packing and distribution to different laboratories and collection of sample testing as well as uploading of test result in State Water Quality Dashboard, (v) Supply of Spare Parts including Calibration & regular upkeep of OMAS and (vi) Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of IEC leaflets and design on JJM be construed as composite supply in which the value of supply of goods constitutes may or may not more than 25 per cent of the value of the said composite. Here the applicant, during the course of personal hearing, has added two more activities. They are: On-site assessment with sample collection & testing of AIRPs, CWPPs & water ATM including supply & delivery of seven new OMAS with consumables for testing Arsenic, Iron, Manganese & residue Chlorine in addition to monitoring and processing the data for precise analysis and evaluation of the plants and upload the data to the State Water Quality Dashboard and Procurement of MLV complete with internal fabrication, refrigeration, exhaust system, air conditioning system, waste disposal system and fully equipped with chemicals, equipments etc. for on site testing, smart phone with preloaded water quality app synchronized with PHED water quality dashboard and safety gear for resource personnel including external designing and painting for IEC propaganda with IEC audio visual aids. Since the documents in relation to the above new scopes of work have already been provided with the original application, the addition is admitted.

2.13 These supply both pure service and composite are provided to The Public Health Engineering Directorate, Govt. of West Bengal, under Jal Jeevan Mission for supplying of drinking water which function is entrusted to a Panchayat under article 243G or to a municipality under article 243W of the of the Constitution of India.

2.14 In case of composite supply, both of service and supply of goods are naturally bundled and supplied in conjunction with each other in the ordinary course of business and one of which is a principal supply.

(i) Annual maintenance of Mobile Laboratory Van under Water Quality Monitoring and Surveillance Programme, with supply of consumables for the testing of water samples.

-> In this case Annual maintenance of Mobile Laboratory is principal supply which is service.

(ii) Regular preventive upkeep & calibration of On-site Mobile Analysis System installed in various laboratories with supply of spare parts.

-> In this case preventive upkeep & calibration of On-site Mobile Analysis System is principal supply which is service.

(iii) Supply & distribution of portable multi-parameter water quality testing device and facilitating block level training/orientation program on testing, awareness generation etc.

-> In this case Supply & distribution of portable multi-parameter water quality testing device is principal supply which is supply of goods.

(iv) Supply and delivery of consumables for water quality monitoring through OMAS including packing and distribution to different laboratories and collection of sample testing as well as uploading of test result in State Water Quality Dashboard

->In this case collection of sample, testing as well as uploading of test result in State Water Quality Dashboard are principal supply of services whereas supply of consumables are naturally bundled with the service and necessary for the service . Hence former is principal supply which is supply of service.

(v) Annual Maintenance Contract for On-site Mobile Analysis System (OMAS) installed in AIRPs with supply of Spare Parts including Calibration.

->In this case annual maintenance contract for OMAS principal supply which is supply of service.

(vi ) Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of IEC leaflets and design on JJM.

->In this case the activities of conceptualization, design, advertisement etc. are construed as principal supply which is supply of service.

2..15 As the question pertains to serial No. 3 of the Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 as amended Notification No. 32/2017 – Central Tax (Rate) dated 12.10.2017, the following criteria needs to be examined in order to decide whether the services provided are eligible for exemption under the aforesaid serial number or not:

i. Whether the supply of services can be treated as pure services;

ii. Whether the supply excluding works contract service or other composite supply involving supply of goods.

iii. Whether services provided to the Central Government, State Government or Union Territory or local authority or a Governmental authority; and

iv. Whether the said services are in relation to any function entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution of India.

The supplies under Question no. 1 are pure service as per serial No. 3 of the Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 as amended, The services are not work contract service work as there is no transfer of asset involves and composite supply involving supply of goods. The services are provided to State Government in relating Jal Jeevan Mission for supply of drinking water which function is entrusted to Panchayat under article 243G or to municipality under article 243W of the Constitution of India.

2.16 As the question pertains to serial No. 3A of the Notification No. 2/2018 – Central Tax (Rate) dated 25.01.2018 as amended, the following criteria needs to be examined in order to decide whether the services provided are eligible for exemption under the aforesaid serial number or not:

i. Whether the supply of goods and services can be treated as composite supply;

ii. Whether the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply.

iii. Whether services provided to the Central Government, State Government or Union Territory or local authority or a Governmental authority; and

iv. Whether the said services are in relation to any function entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution of India.

The supplies under Question no. 2 are composite supply as serial No. 3A of the Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 as amended supply of goods constitutes not more than 25 per cent of the value of the said composite supply. The services are provided to State Government in relating Jal Jeevan Mission for supply of drinking water which function is entrusted to Panchayat under article 243G or to municipality under article 243W of the Constitution of India.

The functions entrusted to a Panchayat and to a municipality under article 243G and 243W of the Constitution along with eleventh and twelfth schedule includes in relation to the matters “Drinking Water” and “Water Supply to Domestics” respectively.

2.17 The question pertaining to composite supply not covered to No. 3A of the Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 are interpreted as per Section 2(30) of the CGST Act, 2017, “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied conjunction with each other in the ordinary course of business, one of which is a principal supply;

Illustration – Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply;

As per Section 8 of the CGST Act, 2017 the tax liability on composite supply shall be determined in the manner, namely “a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of principal supply”.

In the above cases exemption or the tax liability and rate of taxes should be determined on principal supply as interpreted in the section 15 of Statement of relevant facts.

2.18 The applicant has mailed on 30-04-2025 with a prayer to include two additional sub-questions under question no 2, apart from those which are already mentioned in ARA 01 of the instant application. The questions are as follows:

vi. On-site assessment with sample collection & testing of AIRPs, CWPPs & Water ATM including supply & delivery of 7 New On-site Mobile Analysis System (OMAS) with consumables for testing Arsenic, Iron, Manganese & Residue Chlorine in addition to monitoring & processing the data for precise analysis and evaluation of the plants and upload the data to the State Water Quality Dashboard.

vii. Procurement of Mobile Laboratory Van complete with internal fabrication, refrigeration, exhaust system, air conditioning system, waste disposal system and fully equipped with Chemicals, equipment etc. for onsite testing, smart phone with preloaded water quality app synchronized with PHED water quality dashboard and safety gear for resource personal for water quality testing in remote areas including external designing and painting for IEC propaganda complete with IEC audio visual aids.

The applicant also renumbered one of the sub-questions 2(iii) as 2(iii)(a) vide mail dated 30-04-2025.

The applicant also has sought a permission of another hearing vide mail dated 30-04-2025 on basis of its further submission. The prayer is granted.

3. Submission of the Revenue 

3.1 The Concerned Officer from Park Street Division mailed a reply dated 25.02.2025 with comments on the question(s) on which advance ruling is sought is appended below:

(i) Yes, the same appears to be a pure service in nature and as per Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017, the exemption is allowed to Pure Services.

(ii)In the instant case, the main service contracted between Government authority and the applicant appears to be the Annual Maintenance Service and in course of providing service, if any spare parts is supplied, then the same falls under category of “composite supply”.

(iii)Yes, if condition of Notification No. 2/2018 Central Tax (Rate) dated 05.01.2018 is fulfilled, the supply appears to be exempted from payment of tax but for that proportionate ITC should be reserved under rule 42/43 of the CGST Act, 2017.

(iv) Not Applicable

4. Observations & Findings of the Authority

4.1 We have gone through the records of the issue as well as submissions made by the authorized representatives of the applicant during personal hearing. We have also considered the submission made by the officer concerned from the revenue.

4.2 The applicant is stated to have been awarded several contracts related to Jal Jeevan Mission (JJM) from Public Health Engineering (in short PHE) Directorate, Government of West Bengal. The following work orders are claimed to have been received by the applicant from PHE Directorate. All the work orders are placed on records.

4.3 Work order for regular upkeeping, upgradation of all water quality applications for data collection, alert generation system for contaminated sources, stock & faulty instruments and onsite sanitary survey data, integrated with Water Quality Management Information System (WQMIS) structure through cloud based secured survey, data repository system and engagement of efficient manpower for resources monitoring & management of water quality in drinking water sector for all districts of West Bengal for the period of 12 months.

Work order for Annual Maintenance for Mobile Laboratory Van (MLV) under Water Quality Monitoring and Surveillance Programme related to Jal Jeevan Mission in the District of South 24 Parganas under Alipore Division, PHE Dte. Scope of order includes the supply of consumables for the testing of samples w.r.t. parameters Irons, Manganese, Fluoride, Arsenic, Total Hardness, Residual Chlorine, Total Coliform & Thermotolerant Coliform..

Work order for operation of water testing 6 nos. laboratories at Balarampur, Burdwan, WTP Sub-District water testing Laboratory & Hura, Jhalda-I, Kashipur, Baghmundi Sub District Water Testing laboratory under RWS Purulia Sub-Division PHE Dte.

Work order for regular preventive upkeep & calibration of On-site Mobile Analysis system (OMAS) installed in various Water Testing Laboratories of PHE Dte, Govt. of West Bengal. Scope of order includes the supply of Spare Parts for this works.

Work order for engagement of consulting agency for setting up of District Project Management Unit (DPMU) at Purba Mednipur, Paschim Mednipur, Jhargram, Bankura and Purulia under Jal Jeevan Mission/Jal Swapna. (

Work order for supply & distribution of portable multi-parameter water quality testing device (Field Test Kits) to each BMOH and facilitating block level training/orientation program on testing, awareness generation & data integration from the field both online/offline through monitoring & reporting on water safety status of rural drinking water sources district of West Bengal.

Work order for Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of 6 types of IEC leaflets and design on JJM, provision on legal provision damage or illegal connection of PWSS, safe handling & storage of safe water quality issues, water conservation and WASH related issues as per operational guideline of JJM and preparation of web based Digital (A/V) training material (Bengali) at Howrah District.

Work order for on-site assessment with sample collection & testing of AIRPs, CWPPs & Water ATM including supply & delivery of 7 New On-site Mobile Analysis System (OMAS) with 38352 consumables for testing Arsenic, Iron, Manganese & Residue Chlorine in addition to monitoring & processing data of AIRPs, CWPPs, Water ATM for precise analysis and evaluation of the plants and upload the data to the State Water Quality Dashboard segment hosted in PHE Web portal.

Work order for supply and delivery of consumables for Water Quality Monitoring through On-Site Mobile Analysis System (OMAS) for drinking water testing in Untouched Habitations Schools, Anganwadis, and Health Facilities throughout the state related to Water Quality Monitoring and Surveillance under JJM. The scope of the work includes packing of consumables, supply to different laboratories and collection of sample, testing & uploading of test result in State Water Quality Dashboard.

Work order for regular upkeep and management of FTK mobile Application (Android Version) and Web Interface of Water Quality Data Integrated to State Water Quality Dashboard, Generating Results, Reports, Graph and Summary, Maintaining database on a regular basis in the State of West Bengal under PHED.

Work order for supply of Spare Parts including Calibration & regular upkeep of On-site Mobile Analysis System (OMAS) used for drinking water quality monitoring in arsenic & Iron Removal Plants (AIRPs) related to Water Quality Monitoring & Surveillance under JJM.

4.4 The applicant has mentioned certain ^„other type of works‟ that are normally invited by PHE Directorate for tender quotation and the applicant may participate in future. The works include

• Engagement of Third Party Inspection Agency for quality and quantity monitoring of Rural supply scheme.
• Providing comprehensive support service for data centre & networking hardware, redhat server operating system enhancement and maintaining office web portal.
• Development document archival software.
• Engagement of implementation support agency.
• Comprehensive technical support with dedicated software manpower.
• Project implementation & functioning support of domain.
• Providing SSL Certificate for Domain and sub-domain and cloud base videoconferencing software.
• Consulting support for DPR.
• Guarding arrangement for store.

No supporting documents like works order etc. in respect of the above have been placed before this authority.

4.5 Before going into the details of the discussion, we should discuss some concepts which will act as reference in the latter part of the discussion.

Pure Service: this term has not been defined in the provisions of the GST Act. This term has reference in serial no. 3 of Notification No. 12/2017-Central Tax (Rate) Dated 28.06.2017, as amended. Pure Services exclude works contract service or other composite supplies involving supply of goods. So supply of services which does not involve any supply of goods can be regarded as pure service.

Composite Supply: Section 2(30) of the GST Act defines Composite Supply as supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.

Article 243G: This Article of the Constitution of India reads as under:

Powers, authority and responsibilities of Panchayats.—Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to—(a) the preparation of plans for economic development and social justice; (b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule.

Now the Eleventh Schedule contains the following entries in respect of Article 243G:

1. Agriculture, including agricultural extension.

2. Land improvement, implementation of land reforms, land consolidation and soil conservation.

3. Minor irrigation, water management and watershed development.

4. Animal husbandry, dairying and poultry.

5. Fisheries

6. Social forestry and farm forestry.

7. Minor forest produce.

8. Small scale industries, including food processing industries.

9. Khadi, village and cottage industries.

10. Rural housing.

11. Drinking water.

12. Fuel and fodder.

13. Roads, culverts, bridges, ferries, waterways and other means of communication.

14. Rural electrification, including distribution of electricity.

15. Non-conventional energy sources.

16. Poverty alleviation programme.

17. Education, including primary and secondary schools.

18. Technical training and vocational education.

19. Adult and non-formal education.

20. Libraries

21. Cultural activities.

22. Markets and fairs.

23. Health and sanitation, including hospitals, primary health centres and dispensaries.

24. Family welfare.

25. Women and child development.

26. Social welfare, including welfare of the handicapped and mentally retarded.

27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes.

28. Public distribution system.

29. Maintenance of community assets.

Article 243W: This Article of the Constitution of India reads as under:

Powers, authority and responsibilities of Municipalities, etc.—Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow— (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to—(i) the preparation of plans for economic development and social justice;

(ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule;

(b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule.

Now the Twelfth Schedule contains the following entries in respect of Article 243W:

1. Urban planning including town planning.

2. Regulation of land-use and construction of buildings.

3. Planning for economic and social development.

4. Roads and bridges.

5. Water supply for domestic, industrial and commercial purposes.

6. Public health, sanitation conservancy and solid waste management.

7. Fire services.

8. Urban forestry, protection of the environment and promotion of ecological aspects.

9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.

10. Slum improvement and upgradation.

11. Urban poverty alleviation.

12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.

13. Promotion of cultural, educational and aesthetic aspects.

14. Burials and burial grounds; cremations, cremation grounds; and electric crematoriums.

15. Cattle pounds; prevention of cruelty to animals.

16. Vital statistics including registration of births and deaths.

17. Public amenities including street lighting, parking lots, bus stops and public conveniences.

18. Regulation of slaughter houses and tanneries.

Jal Jeevan Mission (JJM): As per the narration provided in the official website of Department of Drinking Water & Sanitation, Ministry of Jalshakti, Government of India, the Jal Jeevan Mission, is envisioned to provide safe and adequate drinking water through individual household tap connections by 2024 to all households in rural India. The programme will also implement source sustainability measures as mandatory elements, such as recharge and reuse through grey water management, water conservation, rain water harvesting. The Jal Jeevan Mission will be based on a community approach to water and will include extensive Information, Education and communication as a key component of the mission. The Jal Jeevan Mission will be based on a community approach to water and will include extensive Information, Education and communication as a key component of the mission. JJM looks to create a jan andolan for water, thereby making it everyone’s priority.

Jal Swapna Prakalpa: It is a project undertaken by the Government of west Bengal in coordination with JJM in respect of drinking water. The main objective of the project is to ensure supply of safe and filtered drinking water to all the villages and every household of a village.

It is in the context of all the above that we have to discuss the issues raised in the application for advance ruling.

4.6 We find from the produced documents that the two main questions raised in the application are based on fourteen work orders received by the applicant from the PHE Directorate. The rest of the three questions are basically follow ups of the first two questions. We have carefully examined all the relevant work orders in the reference frame of the questions raised by the applicant. It is also to be mentioned that all the works narrated in the Work Orders of the PHE Directorate are covered under Article 243G (vide Entry no. 11 of the Article) and Article 243W (vide Entry no. 5 of the Article) of the Constitution of India since the work orders are either related to the functions of JJM/ Jal Swapna Prakalpa or water quality management especially in drinking water sector, water conservation and various programmes of mass sensitization in respect of use and conservation of drinking water.

4.7 The Contract of Services for operation & maintenance, regular upkeep and updation of secure Server/Dashboard, water quality applications for data collection, alert generation system and engagement of consultant for coordination appears not to have any supply of goods involved in them. Also the work orders for operation of water testing laboratories (without any supply of goods), engagement of consultancy agency for setting up of District Project Management Unit and regular upkeep and management of FTK mobile application and web Interface of Water Quality Integrated to State Water Quality Dashboard and maintaining database fall in the same bracket. As such, these services can be regarded as Pure Services and qualify for exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) Dated 28.06.2017, as amended on the following grounds:

i. Those are Pure Services.

ii. No works contract service or other composite supply involving supply of any goods is related to those works.

iii. Those pure services are provided to the Government of West Bengal represented by PHE Directorate.

iv. The specific activity of the services is in relation to function entrusted to a panchayat under Article 243G (serial no. 11 of the Eleventh Schedule) or to a municipality under Article 243W (serial no. 5 of the Twelfth Schedule).

4.8 In the last part (v) of Question No. 1 the applicant has raised the issue whether other contracts only for services can be construed as Pure Services. But the applicant has not adduced any evidence, whatsoever to establish that the referred contracts are only for supply of services. It is worthy to note that in order to ascertain the nature of any supply of service one must have to refer to the nature and scope of the work narrated in the document of work itself. So the authority is unable to conclude the nature of supply that the applicant is referring to.

4.9 The work orders for (i) Annual maintenance of Mobile Laboratory Van under Water Quality Monitoring and Surveillance Programme, with supply of consumables for the testing of water samples, (ii) Regular preventive upkeep & calibration of On-site Mobile Analysis System (in short OMAS) installed in various laboratories with supply of spare parts, (iii) Supply & distribution of portable multi-parameter water quality testing device and facilitating block level training/orientation program on testing, awareness generation etc., (iiia) Supply and delivery of consumables for water quality monitoring through OMAS including packing and distribution to different laboratories and collection of sample testing as well as uploading of test result in State Water Quality Dashboard, (iv) Supply of Spare Parts including Calibration & regular upkeep of OMAS, (v) Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of IEC leaflets and design on JJM and (vi) On-site assessment with sample collection & testing of AIRPs, CWPPs & water ATM including supply & delivery of seven new OMAS with consumables for testing Arsenic, Iron, Manganese & residue Chlorine in addition to monitoring and processing the data for precise analysis and evaluation of the plants and upload the data to the State Water Quality Dashboard appear to be contracts for supply of both goods and services according to the work orders placed before this authority. Each of the supplies will come under the definition of Composite Supply as noted in para 4.5. It is to be noted that in all the above cases the composite supply includes supply of goods more than 25% in terms of value as per the relevant contracts.

4.10 Having said so, now we will determine the principal supply in each of the above cases individually.

• In case of Annual maintenance of Mobile Laboratory Van (MLV in short) under Water Quality Monitoring and Surveillance Programme, with supply of consumables for the testing of water samples, the principal supply is the service of maintenance of MLV.
• In case of Regular preventive upkeep & calibration of On-site Mobile Analysis System (in short OMAS) installed in various laboratories with supply of spare parts, the principal  supply is the service of sample collection, testing and uploading data and monitoring and processing of such data.

• Supply & distribution of portable multi-parameter water quality testing device and facilitating block level training/orientation program on testing, awareness generation etc. is a composite supply where the principal supply is that of Field Test Kits (in short FTK).
• In respect of Supply and delivery of consumables for water quality monitoring through OMAS including packing and distribution to different laboratories and collection of sample testing as well as uploading of test result in State Water Quality Dashboard, the principal supply is the service of upkeep of On-site Mobile Analysis System (in short OMAS).
• The above observation is applicable for Supply of Spare Parts including Calibration & regular upkeep of OMAS.
• In case of Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of IEC leaflets and design on JJM, the principal supply is that of services of conceptualisation and implementation of community sensitisation in respect of water conservation.

4.11 So far as the work order related to Procurement of Mobile Laboratory Van (MLV) issued by the Executive Engineer, Jhargram Division, PHE Directorate is concerned, this appears to be supply of goods. The work order relates to supply of MLV complete with internal fabrication, refrigeration, exhaust system, air conditioning system, waste disposal system and fully equipped with chemicals, equipments etc. for on site testing, smart phone with preloaded water quality app synchronized with PHED water quality dashboard and safety gear for resource personnel including external designing and painting for IEC propaganda with IEC audio visual aids.

Thus it is evident that there is no supply of service involved in the above work order. It is a supply of goods i.e. supply of vehicle fitted with equipments and other fittings to serve a specific purpose.

This will come under Entry no. 401A of Schedule III. This entry pertains to Special purpose motor vehicles, other than those principally designed for the transport of persons or goods. The vehicle under question is specifically designed, equipped and furnished to execute the function of water quality testing in remote areas. So it is a special purpose motor vehicle.

4.12 From the above discussion the following points are noted:

• There are certain supplies as detailed in para 4.7 which are pure services and will qualify for exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) Dated 28.06.2017.

• There are certain supplies as discussed in para 4.9 which are to be regarded as composite supply where the value of goods supplied is more than 25% of the total value of the composite supply. These supplies will not surely come under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 since they are not pure services. There is also no scope that they will come under Serial No. 3A of Notification No. 2/2018-Central Tax (Rate) dated 25.01.2018 since they are composite supplies involving supplies of goods more than 25% in terms of value of the total composite supplies as is evident from the respective contracts.
• There is one particular supply as detailed in para 4.11 where the works order is related to supply of goods only.

In view of the foregoing discussion, we rule as under:

RULING

Q1. Whether the Contract of Services for (i) Operation & maintenance, regular upkeeping, updradation of secure Server/Dashboard, water quality applications for data collection, alert generation system and engagement of consultant for coordination, (ii) Operation of water testing laboratories without any supply of goods, (iii) Engagement of consultancy agency for setting up of District Project Management Unit, (iv) Regular upkeep and management of FTK mobile application and web Interface of Water Quality Integrated to State Water Quality Dashboard and maintaining database and (v) Other contracts only for services can be construed as Pure services and exempted from payment of tax vide Serial number 3 of the Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017, as amended.

Answer: Except the contract of services mentioned in (v) as above, all services referred to in the question can be regarded as Pure Service and as such they qualify for exemption under serial no. 3 of Notification No. 12/2017-Central Tax (Rate) Dated 28.06.2017, as amended.

In respect of (v) in question 1, no ruling is given for the reason noted in para 4.8.

Q2. Whether the contract for (i) Annual maintenance of Mobile Laboratory Van under Water Quality Monitoring and Surveillance Programme, with supply of consumables for the testing of water samples, (ii) Regular preventive upkeep & calibration of On-site Mobile Analysis System installed in various laboratories with supply of spare parts, (iii) Supply & distribution of portable multi-parameter water quality testing device and facilitating block level training/orientation program on testing, awareness generation etc., (iiia) Supply and delivery of consumables for water quality monitoring through OMAS including packing and distribution to different laboratories and collection of sample testing as well as uploading of test result in State Water Quality Dashboard, (iv) Supply of Spare Parts including Calibration & regular upkeep of OMAS and (v) Conceptualization, design, implementation of community sensitization /mobilization activities using various mediums on JJM through Tableau, Bus Panel advertisement, organizing school level awareness programme, designing, printing & supply of IEC leaflets and design on JJM, (vi) On-site assessment with sample collection & testing of AIRPs, CWPPs & water ATM including supply & delivery of seven new OMAS with consumables for testing Arsenic, Iron, Manganese & residue Chlorine in addition to monitoring and processing the data for precise analysis and evaluation of the plants and upload the data to the State Water Quality Dashboard, (vii) Procurement of Mobile Laboratory Van complete with internal fabrication, refrigeration, exhaust system, air conditioning system, waste disposal system and fully equipped with chemicals, equipments etc. for on site testing, smart phone with preloaded water quality app synchronized with PHED water quality dashboard and safety gear for resource personnel including external designing and painting for IEC propaganda with IEC audio visual aidsbe construed as composite supply.

Answer: For segment (i) to (vi) as above, the answer is in affirmative.

For the last segment (vii) the answer is that the supply is that of special purpose motor vehicle. This supply of goods will be covered by Entry No. 401A of Schedule III and will be taxed @ 9% CGST+9% SGST.

Q3. If Answer to the Q2 is ―Yes”, Whether the Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply be exempted from payment of tax vide Serial number 3A of the Notification No. 2/2018 – Central Tax (Rate) dated 25.01.2018 amendment to the mother Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017.

Answer: Upon careful study of the related work orders, it is found that in each of the above composite supplies, the value of goods supplied is more than 25% of the total value of the relevant composite supply. As such they are not eligible for exemption from payment of tax vide Serial number 3A of the Notification No. 2/2018 – Central Tax (Rate) dated 25.01.2018 amendment to the mother Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017.

Q4. If Answer to the Q2 is ―No”, Whether the Composite supply of goods and services be treated as supply of ―Composite Supply” u/s 2(30) of GST Act and the tax liability to be determined as exemption/rate applicable for principal supply.

Answer: The answer to Q2 except segment (vii) has been given in affirmative. So the tax liability on the composite supplies referred to hereinabove is to be determined on the basis of the rate of tax applicable to the principal supply which has been determined in para 4.10.

Q5. If Answer to the Q4 is ―Yes” e. composite supply u/s 2(30) of CGST Act, which one shall be treated as ―Principal Supply‖, Major item of Supply part or Service part for determination of rate for tax liability.

Answer: It will depend on the nature of particular supply envisaged in a particular work order. This has been elaborated in para 4.10. The principal supply in each of the works has been determined and the answer will follow the same discussion in para 4.10. The rate of tax for the mentioned composite supply will be the rate of tax of the principal supply determined therein.