IN RE: GSPL INDIA TRANSCO LTD. AND ORS. Vs. STATE
AUTHORITY FOR ADVANCE RULINGS
In Re: Gspl India Transco Ltd. And Ors.
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(1.) M /s. GSPL India Transco Limited (F. No. AAR/44/ST/02/13) and M/s. GSPL India Gasnet Limited (F. No. AAR/44/ST/04/13) (hereinafter referred to as applicant) are a subsidiary of Gujarat State Petronet Limited (GSPL), which is a Government Company under the Companies Act, 1956. As the facts and question, on which Advance Ruling sought, is same in respect of above referred applicants, both applications are taken up for common ruling.
(2.) BOTH these cases had a checkered journey so far. Applicants filed applications before this Authority on 13.12.2011. However, the applications were rejected vide order dated 30.03.2012 as not maintainable. Thereafter, the applicants filed writ petition against aforesaid order of this Authority before the Hon'ble Gujarat High Court, who vide order dated 29.08.2012 allowed the writ petition and instructed this Authority to hear the applicant on merits. In the interim, Service Tax laws in India were replaced by a comprehensive Service Tax regime with effect from 01.07.2012. Due to these changes, the applicants filed corrigendum to the original applications on 12.11.2012. However, on the instructions of this Authority, fresh applications dated 01.03.2013 were filed, i.e. present applications. This Authority vide Order dated 16.01.2015 restored the applications, which were dismissed earlier for non -prosecution on 21.04.2014. Applicant will be engaged in rendering taxable service in the nature of transport of gas through pipelines, classified under the erstwhile taxable category of "Transport of goods through pipeline or other conduit service", under section 65(105)(zzz) of the Finance Act, 1994, as it existed prior to July 1, 2012. Applicant proposes to avail the benefit of Cenvat credit in respect of the 'capital goods' and utilizing the same for discharging its output service tax liability. Applicant proposes to adopt engineering, procurement and construction ("EPC") model for laying of gas transmission pipelines. The proposed activity, as described by the applicant, is as under;
(3.) THE activity of laying of pipelines begins with identification of route of the pipeline from the source to destination. The identification of the route involves a feasibility analysis to ensure that an acceptable route for the pipeline exits that provides the least impact to the environment and public infrastructure already in place. Once the route for the pipeline is identified, the next step is to acquire Right of Use and Right of Way on the said route. In this regard, the applicant would obtain the Right of Use (ROU) in respect of the land along -with the identified route either under the Gujarat Water & Gas Pipelines (Acquisition of Right of User in Land) Act, 2000 or the Petroleum and Minerals Pipeline (Acquisition of Right of User Inland) Act, 1962. The first one is a Gujarat State Legislation and the second one is a Central legislation and both are exactly pari -materia. The requisite rights of way are obtained through privately negotiated contracts. For the purposes of laying pipeline, the applicant would be required to procure steel pipes and valves and further would have to get the pipes and valves installed and commissioned along the identified routes so as to connect the source to the destination. In this regard, applicant would grant various turnkey contracts ("EPC Contracts") involving supply of pipes and valves as well as installation and commissioning of the said pipes and valves to bring into existence a pipeline connecting the source to the destination. The scope of work of the EPC Contractors would relate to construction of the complete pipelines by carrying out inter alia the following specific work scopes:
"a) Supply of Plant and Equipment (including pipes and valves)
b) Installation and construction services, onshore services and offshore services.
c) Supply of mandatory spare within and outside India
d) A civil works package for constructing the pipelines sub -stations";
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