ORDER

M/s. R. Vidyasagar Rao Constructions, Plot No. 98 & 99, Lumbini layout, near Euro School, Gachibowli, Hyderabad-36 (GSTIN No. 36AAGFR6627L12Q) has filed an application in Form GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 103 of CGST/TGST Rules, 2017 and sought advance ruling on the following issues:

• The combination of services of excavation of sand including loading with machinery at reach, formation of Ramps and maintenance of Roads, transportation charges for the tractors/ tippers of sand from reach to stockyard and loading cost of sand from stockyard to lorries, is whether “Works Contract” or “Composite Supply” and the rate of tax applicable on the consideration received there for.

2. The applicant submitted the application in Form GST ARA-01 and Statement containing the applicant’s interpretation of law & relevant facts and requested for advance ruling on classification of services rendered by them and rate of tax applicable. They have submitted a copy of Challan evidencing payment of application fee of ₹ 10,000/-.

3. A personal hearing was held in this case and the assessee have appeared for personal hearing on 3-4-2018 along with their Advocate Dr. T. Ramesh Babu and explained their case as under :

(a) The applicant is a contractor to Telangana State Mineral Development Corporation Limited (TSMDC). TSMDC has entrusted the following work to the applicant:

• excavation of sand including loading with machinery at reach
• transportation of above sand from the reach to stockyard
• loading the so stocked sand to the lorries for further transportation by the contractee
• formation of ramps, roads and their maintenance

(b) The place where the above contract is being executed in all its respects is in fact related to the Kaleshwaram project when it comes into existence, the sand existing there would hit the flow/ storage of water when the object of the project is sought to be achieved and therefore it is the reason for removal of sand there from. The State of Telangana sought to remove the sand and it is to be done through contractors. Such sand being a mineral when removed, the role of TSMDC came into existence and hence the contractual obligation between TSMDC and the applicant originated.

(c) The important feature of above contract is formation of ramps and roads in which there is supply of goods involved which owned by the applicant at the time of their supply which are bought by the applicant in the local market by paying required royalty, taxes etc. by theory of accretion. When the said goods like, morrum, metal and pipes etc. are incorporated into the work for formation of the ramps and roads, the ‘works contract’ takes place. After formation of ramps and roads, the so formed immovable property would become the permanent property of the contractee.

(d) The ramps and roads so formed, while certain of them would be submerged in water when the irrigation project comes into existence, certain of them would remain as they are for use by the public.

(e) Therefore, the activity of the applicant would fit into the ambit of ‘works contract’ as defined under sub-section (119) of Section 2 of the GST Acts. Such works contract falls under paragraph No. 6(a) of Schedule-II to the GST Acts.

(f) In respect of the rate of tax applicable, the applicant is of the view that they are required to pay CGST 2.5% + SGST 2.5% = 5% as given in the CBEC Notification No. 31/2017, dated 13-10-2017 issued in G.O. Ms No. 253, Revenue (CT-II) department dated 23-11-2017.

(g) The applicant is also under strong belief that the activities they are rendering to the contractee amounts to composite services in which the transportation part is predominant and therefore also the rate would be 5% GST (2.5% CGST+2.5% SGST).

4. The applicant submitted copy of the Contract Agreement No. 08-TSMDC/Damerakunta-III/Annaram.Sand/Legal/2017, dated 18th March, 2017 entered between Telangana State Mineral Development Corporation Ltd., a Company registered under Companies Act, 2013 and M/s. VidyaSagar Rao Constructions (i.e. the applicant).

I. Opinion expressed by the member representing Central Tax:

1. A perusal of the said Agreement dated 18-3-2017 entered between Telangana State Mineral Development Corporation Limited, a Registered Company under the Companies Act, 2013 (TSMDC for brevity) and M/s. R. VidyaSagar Rao Construction, a registered partnership firm dealing with mining business and having its place of business at Yellareddyguda, Hyderabad (contractor/applicant for brevity), we find that TSMDC had accepted the tender submitted by the applicant who emerged as L1 Bidder by quoting ₹ 74.36 per CBM of sand for excavation of 15,60,000 CBM of sand from Block III, Damerakunta-III, over an extent of 52 Ha., at submergence areas of Annaram Barrage, Kaleshwaram Project and transport the same quantity of sand to nearby stockyard (within 1 Km from the submergence area) and again loading of sand into Lorries at stockyard. TSMDC had issued the letter of intent to the contractor on 27-1-2017 for execution of the agreement for excavation of the sand as mentioned above.

(a) On perusal of the scope of the work specified in the said agreement, it is found that the contractor shall excavate sand and transport the same to the stockyard and again load the same into the lorries at stockyard. The equipment/vehicles and manpower required for the said activities is the responsibility of the contractor. The services to be rendered by the contractor as part of the agreement consists of the following components.

(i) excavation of sand;

(ii) transportation of the excavated sand from the submergence area to the identified stockyard and

(iii) loading of the sand into lorries at the stockyard.

(b) The contractor receives an amount of ₹ 74.36 per CBM of sand for the above said three activities mentioned at (i) to (in) above. It is the look out of the contractor to transport the excavated sand by laying the roads/ ramps wherever it is required from the submergence area to the identified stockyard and laying of road/ramps is out of the scope of the contract as specified in the subject agreement. Hence the service rendered by the applicant do not encumber the works related to roads/ramps as claimed by the applicant.

(c) The contractor should have under their possession through ownership or lease, equipment such as Excavators, Mobile water tanks, Tractors/ Tippers throughout the contract period.

(d) The contractor shall obtain all necessary licences, permits, approvals, etc., before commencement of the work as required under Telangana State Sand Mining Rules, 2015, for execution of the work.

(e) It is the sole responsibility of the contractor to lay/ form required road from stockyard to nearby connectivity road for plying of lorries/vehicles, any incidental expenditure incurred and involved thereon for laying & maintenance of roads shall be borne by the contractor.

2. Thus it is very clear from the agreement entered between the contractor and the contractee, the main work to be rendered by the contractor involves excavation of sand at submergence areas of Annaram Barrage and transport the same quantity of sand to nearby stockyard and again loading of sand into lorries at stockyard. Laying of roads from stockyard to nearby connectivity roads for plying of lorries is incidental to transport of sand excavated from the submergence areas of Annaram Barrage to nearby stockyard. Hence the claim made by the applicant that the activity rendered by them falls under ‘works contract’ is not tenable.

3. The service supplied by the applicant is a ‘composite supply’. As per Clause (30) of Section 2 of the CGST Act, ‘Composite supply’ is defined as:

“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 in conjunction with each other in the ordinary course of business, one of which is a principal supply”;

The three components of the services:

(i) excavation of sand;

(ii) transportation of the excavated sand from the submergence area to the identified stockyard and

(iii) loading of the sand into lorries at the stockyard,

as mentioned above are naturally bundled and the principal supply is ‘excavation of sand’. Without excavation of sand, transportation and loading of sand to the lorries doesn’t arise. The services of transportation of sand and loading of sand to the lorries are ancillary to the service of ‘Excavation of sand’ and hence excavation of sand is the principal supply in the composite supply of the services rendered by the applicant.

In view of the above discussion, the contention of the applicant that the impugned contract needs to be treated as ‘Works contract’ is not acceptable and hence the question of application of tax rate of 5% (2.5% + 2.5%) as per Notification No. 46/2017-CGST (Rate), dated 14-11-2017 and Notification No. 31/2017 of TGST Act in G.O.Ms. No. 23-11-2017 does not arise.

4. The alternate argument put forth by the applicant during the time of personal hearing is that even if the contract is treated as Composite supply other than ‘Works Contract’, the predominant and the object of the contract is ‘transportation of goods’ in a vessel i.e. container on which GST rate 5% (2.5% + 2.5%) is applicable and hence the applicant pleaded for the ruling of the same.

5. The Sl. No. 9 of the Notification No. 11/2017-Centra1 Tax (Rate), dated 28-6-2017 is extracted hereunder for ready reference:

Sl. No.	Chapter, Section or Heading	Description of Service	Rate (per cent.)	Condition
(1)	(2)	(3)	(4)	(5)
9	Heading 9965(Goods Transport services)	(i) Transport of goods by rail [other than services specified at item no. (iv)]	2.5	Provided that credit of input tax charged in respect of goods in supplying the service is not utilised for paying central tax or integrated tax on the supply of the service
(ii) Transport of goods in a vessel.	2.5	Provided that credit of input tax charged on goods (other than on ships, vessels including bulk carriers and tankers) used in supplying the service has not been taken [Please refer to Explanation no. (iv)]
(iii) Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use). Explanation. – “goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.	2.5	Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)]
(iv) Transport of goods in containers by rail by any person other than Indian Railways.	6	–
(v) Goods transport services other than (i), (ii), (iii) and (iv) above.	9	–

6. The Tariff Heading 9965 (Goods transport services) specified against Sl. No. 9 covers five categories of services of goods transport. The claim of the applicant is that their composite supply falls under ‘Transport of goods in a vessel.’ Specified at (ii) under column (3) against Sl. No. 9. The said category of transport covers goods transport in a vessel. The ‘vessel’ referred to in the above said notification means ship/ large boat used for transport of goods by sea/inland waters. Hence the case on hand do not fall under ‘(ii) Transport of goods in a vessel.’ as claimed by the applicant. The word ‘vessel’ has been defined under clause (z) of Section 2 of Major Port Trusts Act, 1963 and the same is extracted here under:

“(z) “vessel” includes anything made for the conveyance, mainly by water, of human beings or of goods and a caisson”

As per Section 2(34) of the CGST Act, 2017 “Conveyance” includes a vessel, an aircraft and a vehicle. Hence the words “Transport of goods in a vessel” as Specified at (ii) under column (3) against Sl. No. 9 of the Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 mainly refers to the mode of transport, and the word “vessel” cannot be considered as a “container” as argued by the applicant.

7. In terms of the above statutory provision, vessel includes all types of transport conveyances by water like ships, barges, boats, tankers, etc. But the case on hand is distinguishable as the vehicles used for transportation of the sand is by road and therefore the same are not covered under ‘vessel’ as specified at entry (ii) under column (3) against Tariff Heading 9965 (Goods transport services) in the Notification No. 11/2017.

8. Thus in view of the above discussion, and the service rendered by the applicant being a composite supply with three components of services viz., (i) excavation of sand at submergence areas of Annaram Barrage, (ii) transportation of such excavated sand to stockyard nd (iii) loading of the sand into lorries at the stockyard; and the principle supply being excavation of sand as mentioned in the ‘scope of work’ of the agreement between the applicant and TSMDC, theservices rendered by the applicant are classifiable as “Excavating and Earthmoving Services” under Heading 995433 of GST tariff and rate of tax applicable is 9% CGST + 9% SGST.

II. Opinion expressed by the member representing State Tax:

Facts:

(a) The applicant is a contractor to Telangana State Mineral Development Corporation Limited (TSMDC).

TSMDC has entrusted the following work to the applicant:

Tender Document Reference: TSMDC/SAND/EXC/Damerakunta-III/Annaram/2016, dated 29-12-2016

Excavation of Sand 560000CBM of Block III, Damerakunta-III over an extent of 52.0 Ha from Submergence area of Annaram Barrege, Kaleswaram Project and transport the same to the nearby Stockyard and again loading of the same into the Lorries at Stockyard…………. Page 1.

The Corporation upset price is ₹ 100/per CBM (Rs.30 for loading charges for machinery at Reach, ₹ 7.50 for formation of Ramps and maintenance of Roads, ₹ 32.50 for transportation charges for the tractors/ tippers of sand from reach to stockyard and ₹ 30 for loading cost of sand from Stockyard to lorries…… Page 8.

At the cost of repetition, the upset price ratios are drawn hereunder as per the above tender document:

Loading charges for machinery at reach: 30%

Formation of ramps, formation and maintenance of roads: 7.50%

Charges for transportation of sand through tractors/tippers from reach to stockyard: 32.50%

Loading cost of sand from Stockyard to lorries: 30%

Agreement Dated 18-3-2017:

Contractee: TSMD Corporation – Contractor: R. Vidya Sagar Rao – Partnership firm)

Contractee accepted the tender submitted by the Contractor, who emerged as L1 Bidder by quoting ₹ 74.36 per CBM of sand for excavation of 15,60,000 CBM of sand from over an extent of 52 Ha. At submerged areas of Annaram Barrage, Kaleswaram Project and transport the same quantity of sand nearby Stockyard and again loading of sand into the lorries at Stockyard…….Page 2 & 3.

Laying roads: It is the sole responsibility of the Contractor to lay/ form required road from stockyard to nearby connectivity road for plying of lorries/vehicles, any incidental expenditure incurred and involved for laying & maintenance of roads shall be borne by the Contractor…… Page 8.

Letter of intent dated 27-1-2017: At its page 1 the acceptance of price for CBM consisting the above contract fixed at ₹ 74.36 and accepted and communicated by the contractee.

In view of the above terms of tender called for which was fructified into an agreement between TSNMDC and the applicant since the applicant quoted the lowest bid and hence was successful in the bid and need to execute this contract.

Understanding by the applicant: about the nature of contract and rate of tax there on :

1. Firstly as per the information/ details provided along the application for ruling and also written submissions filed at the time of hearing the case, the applicant opines this contract is a works contract falling under Section 2(119) and hence when it is being done to Government connected to Kalaeswaam Projected and hence liable to CST @ 2.5% CGST and 2.5% SGST as per the Notification No. 31/2017, dated 13-10-2017, vide G.O.Ms No. 253, Revenue (CT-II) Department, dated 23-11-2017 the portion of which is as under:

Heading	Description of Service	Rate (percent.)	Condition
9954	(vii) Composite supply of works contract as defined in Clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017, involving predominantly earth work (that is, constituting more than 75 percent. of the value of the works contract) provided to the Central Government, State Government, Union territory, local authority, a Governmental Authority or a Government Entity.	2.5	Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be

2. Secondly, he states the supply being composite supply it is Goods Transportation supply on vessel as per notification No. 11/2017, dated 28-6-2017 as per G.O.Ms No. 110, Revenue (CT-II) Department, dated 29-6-2017, which is as under :

Sl. No.	Chapter, Section or Heading	Description of Service	Rate (percent.)	Condition
(1)	(2)	(3)	(4)	(5)
9	Heading 9965(Goods transport services)	(i) Transport of goods by rail [other than services specified at item no. (iv)].	2.5	Provided that credit of input tax charged in respect of goods in supplying the service is not utilised for paying central tax or integrated tax on the supply of the service
(ii) Transport of goods in a vessel.	2.5	Provided that credit of input tax charged on goods (other than on ships, vessels including bulk carriers and tankers) used in supplying the service has not been taken [Please refer to Explanation no. (iv)]
(iii) Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use). Explanation. – “goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.	2.5	Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)]
(iv) Transport of goods in containers by rail by any person other than Indian Railways.	6	–
(v) Goods transport services other than (i), (ii), (iii) and (iv) above.	9

Analysis of the facts & Conclusions:

1. Before proceeding further, it needs to kept in view that in ₹ 74/- the same ratios as mentioned above are there for the independent components of supplies since there is no change in the denoted supplies in the tender and the agreement, the change is in overall price only. Basis for the agreement is the tender and such fact is not to be ignored.

2. For brevity in the foregoing paragraphs, TSMDC is referred to as ‘receiver’ and the applicant is as ‘provider’.

3. In order to address the above questions, it is necessary to examine whether or not the work entrusted to the provider by the receiver is just for a ‘supply’ simplicitor or does it involved with more than one ‘supply’ viz.: in combination of ‘supply of goods and supply of services’ or ‘supply of different services joined together’ in the event of which the transaction between the provider and the receiver is in the nature of a ‘Composite supply’ under the scheme of the Act.

4. Though in the letter of intent and in the Agreement it is referred that the price is for one CBM of work done such work is not just simple as ‘excavation’ i.e. culling out sand form the nature and placing the excavated movable goods viz. sand nearby the source wherefrom it is excavated. The pre and post excavation activities joined among them in fact could be gathered from the tender document/agreement as per which the following are they:

1. ₹ 30 for loading charges for machinery at Reach,

2. ₹ 7.50 for formation of Ramps and maintenance of Roads,

3. ₹ 32.50 for transportation charges for the tractors/ tippers of sand from reach to stockyard

4. ₹ 30 for loading cost of sand from Stockyard to lorries = Summed up to ₹ 100/- CBM of work done.

5. As a matter of fact out of ₹ 100/- no amount is apportioned in the name of excavation as such and the same is to be ascertained out of ₹ 30/- referred for loading charges for machinery at reach i.e. source where from the sand acquired. Such fact makes it clear that out such ₹ 30/- only a portion whatsoever is to be apportioned excavating sand from the source and the rest such would remains to be for loading the sand so culled out to the machinery available for transportation.

6. Therefore the first part being the excavation and loading work in this contract. This activity to be started with laying ramps and roads to enable the containers in which the excavated sand is to be loaded reach the resource of sand. As the provider only to do this job with his cost which means it is to be born out of ₹ 74…agreed upon between him and the recipient.

7. Therefore, formation of these ramps and roads in which supply of goods and services involved which amount to composite supply of works contract as defined under Section 2(119) of the Act. Such WCT is antecedent to the work of excavation and loading. Therefore, formations of ramps, roads i.e. internal roads before excavating the sand and loading can be said to be a Works contract in which certain goods are embedded to earth permanently amounting to immovable property. Therefore, the so formed roads and ramps in the submergible area after the Kaleswaram project comes into existence to facilitate the transportation of sand.

8. In the above activity, the construction of ramps and roads and their maintenance falls under WCT.

9. The next one is supply of transportation service i.e. from reach i.e. source wherefrom the sand culled out and loaded and to the place of stockyard.

10. Then the service of loading the sand from stockyard to lorries of 3rd parties starts.

11. Last service is formation of the road from the stockyard to the nearest village road and its maintenance till the entire contract is over. To form these roads, the provider needs to use goods and labour/service. In the contractual terms it is very clear that this service is to be done by the provider only. Then only the so loaded lorries would ply on the so formed roads which needs to be maintained by the provider only Hence the last actions of the provider ends with maintenance of roads formed by him only which too require men and material/ service and labour which again amounts to Works contract. These roads also facilitate the transportation of sand.

12. Important to notice laying ramps and roads and maintenance thereof is not for the provider himself but it is a part of the whole activity.

13. Thus formation of ramps, internal roads, formation of external roads and their maintenance are works contract only but they are facilitating supplies to the main supply of transportation of sand from one place to other. Hence, transportation of goods needs aid of laying ramps and roads rather than the excavation needing laying of ramps and roads.

14. In view of the above analysis, the request of the applicant in his written statement and as per his argument at the time of hearing the case that the entire contract is WCT is not tenable since the intention between the recipient and the provider is not to see the emergence of an immovable property i.e. ramps and roads either internal or external whatsoever but the intention is to see that the sand stagnated at one place be shifted to other place by means of transportation of the sand. So that laying the ramps and roads came into picture but not shifting the sand from one place to other brought such ramps and roads into picture, if the entire contractual obligations are overviewed.

15. In view of the above factual matrix, the above contract is a composite contract but not exclusively works contract service as defined under Section 2(119) and as per paragraph No. 6(a) of Schedule II to the Act.

16. Since the above contract is held to be composite contract, the request of the applicant what is the rate of tax on it is to examined as under:

17. In a composite supply the taxability under the scheme of the Act is on the basis of ‘principle supply’

18. Sub-section (30) of Section 2 of the TGST Act, ‘Composite supply’ is defined as:

“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 in conjunction with each other in the ordinary course of business, one of which is a principal supply”;

Example in for composite supply under the Act is as under :

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.

19. A plain reading of the above definition makes it clear that ‘Composite supply’ is one which consists more than one supply naturally bundled to each other and the example given above is one for the same amongst the worldly.

20. Whether supplies more than one in the ordinary course of business a matter to be gathered from the facts and circumstances of each case depend on the business line of activity and for that matter there is no and can’t be a thumb rule/no straight jacket formula. Same as the case in the case of ‘naturally bundled together’. Thus each case is to be examined in the back drop of several factors.

21. In the instant case the recipient for whatever may be the reasons, instead of engaging different providers for different supplies engaged one supplier for all the supplies referred to above in detail. This fact only making the instant contract a composite one. In the facts of this case, laying internal ramps and roads excavation of sand, loading to containers, transportation of sand, unloading, stacking, loading to 3rd party containers, making ready the external roads and their maintenance for free flow of transportation of integrally connected to each other and they are bundle of services and it is possible in these types of contracts.

22. The intention behind the contract is to shift the goods viz. sand from one place to other distinguishable from ‘excavation’ simplicitor.

23. The value of transportation being 32.5% and the value 7.5% i.e. of formation of internal ramps and roads and external roads and their maintenance which are interlinked and for transportation of sand put together comes to 45%.

24. Here, it is pertinent to go through the Section 8 of TGST Act, 2017:

Section 8. The tax liability on a composite or a mixed supply shall be determined in the following manner, namely: –

(a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; and

(b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax.

25. A careful reading of the above Section and keeping in view of the above facts and circumstances of the case of the appellant the principle supply in this composite supply is identified as ‘transportation of goods’.

26. As per Notification No. 11/2017, dated 28-06-2017 the following are the tax rates for rendering the above service.

27. The Sl. No. 9 of the Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 is extracted hereunder for ready reference:

Sl. No.	Chapter, Section or Heading	Description of Service	Rate (percent.)	Condition
(1)	(2)	(3)	(4)	(5)
9	Heading 9965 (Goods transport services)	(i) Transport of goods by rail [other than services specified at item no. (iv)].	2.5	Provided that credit of input tax charged in respect of goods in supplying the service is not utilised for paying central tax or integrated tax on the supply of the service
(ii) Transport of goods in a vessel.	2.5	Provided that credit of input tax charged on goods (other than on ships, vessels including bulk carriers and tankers) used in supplying the service has not been taken [Please refer to Explanation no. (iv)]
(iii) Services of goods transport agency (GTA) in relation to transportation of goods (including used household goods for personal use). Explanation. – “goods transport agency” means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.	2.5	Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)]
(iv) Transport of goods in containers by rail by any person other than Indian Railways.	6	–
(v) Goods transport services other than (i), (ii), (iii) and (iv) above.	9

28. The applicant is not engaged in transpiration of goods or passengers by rail, not engaged as a Goods Transport Agency also.

29. The left over tariffs are Transportation of goods by Vessel i.e. 2.5% CGST and 2.5% SGST, or 18% under residuary entry.

30. The applicant stated in the application for ruling and also in his written submissions his contract is not works contract, it is transportation of goods by vessel.

31. The meaning of ‘vessel’ is not defined under the Act.

32. As per the condition in column 5 in respect of ‘Transportation of goods by vessel’ the position of input tax credit is as under:

‘Provided that credit of input tax charged on goods (other than on ships, vessels including bulk carriers and tankers) used in supplying the service has not been taken.

33. Therefore, the meaning of ‘vessel’ can be ascertained from the above proviso to the enumeration of ‘Transportation of goods by vessel’ and when it is done so, vessel include bulk carriers and tankers any goods used for transportation of other goods. Thus the meaning of vessel for the purpose of this entry stands as container which contains other goods which carries the goods from one place to other.

34. The difference between enumeration (ii) and (v) above in the above notification is the former carry the disentitlement of input tax credit and the latter carries no such disentitlement.

35. In view of the above discussion, and the service rendered by the applicant supply with the components of services viz, (i) Laying internal ramps and roads, (ii) excavation of sand at submergence areas of Annaram Barrage, (iii) transportation of such excavated sand to stockyard and (iv) loading of the sand into lorries at the stockyard; and laying and maintenance of external roads within the price of ₹ 74/- per CBM is a composite supply and the principal supply being transportation of sand ‘scope of work’ of the agreement between the applicant and TSMDC, the services rendered by the applicant are classifiable as ‘Goods Transporting by Vessel’ and GST tariff and rate of tax applicable is 2.5% CGST + 2.5% SGST subject to condition that the applicant not entitled to ITC to the extent mentioned in the proviso in column 5 of (v) entry as mentioned above as per G.O.Ms No. 110, Revenue (CT-II) Department, dated 29-6-2017.

III. Referring the application to Appellate Authority for Advance Ruling:

Since there is no uniform opinion arrived by the Members representing Central Tax and State Tax and they have expressed two different views on classification of services and applicable rate of tax on the services rendered by the applicant, the application filed by M/s. R. Vidyasagar Rao Constructions, Plot No. 98 & 99, Lumbini layout, near Euro School, Gachibowli, Hyderabad-36 (GSTIN No. 36AAGFR6627L12Q), is being referred to the Appellate Authority for Advance Ruling for the State of Telangana in terms of Section 98(5) of the CGST Act, 2017 for hearing and decision on the question on which advance ruling is sought.