EXAMPLE-66

 

State whether the following activities undertaken would be liable to GST?

 

(i)                 Gautam provided services to Sahil Oil Corporation from vessels located in continental shelf of India for the purpose of prospecting natural gas.

 

(ii)               XYZ & Co. Ltd produced mineral oil in the EEZ or continental shelf.  

 

(iii)             Gunnu is engaged in the activity of preparation of a place for organizing event or function by way of erection/laying of pandal and shamiana. He is of the view that transaction including “transfer of right to use of goods” is taxable as supply of goods.

Answer

Nature of activity

 

Taxable under GST

 

Remarks

 

Supply of services to vessels located in continental shelf of India for the purpose of prospecting natural gas.

 

 

 

 

 

 

Supply of goods (mineral oil) from EEZ or continental shelf.

 

 

 

Activity of preparation of a place for organizing event or function by way of erection/ laying of pandal and shamiana.

 

 

 

 

 

 

 

 

Yes

 

 

 

 

 

 

 

 

Yes

 

 

 

 Yes

 

 

 Section 1 provides that GST Act extends to the whole of India except the State of Jammu and Kashmir.

In GST “India” means the territory of India as referred to in Article 1 of the Constitution, its territorial waters, seabed and sub-soil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976, and the air space above its territory and territorial waters.

Thus supply of services in continental shelf of India is covered under the scope of GST.

 

Supply of taxable goods from EEZ and CS is also within the territory of India. Thus taxable under GST.

 

   

  Paragraph 5, point (f) of Schedule II specifies that transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration shall be deemed as supply of services. Thus, this activity of transfer of right to use any goods provided with pandal and shamiana is deemed as supply of services.

On this supply of service same rate of GST and compensation cess is applicable as on supply of similar goods [SCHEDULE OF GST RATES FOR SERVICES AS APPROVED BY GST COUNCIL]

If the supply involves more than one goods, then rate of tax of principal supply would be applicable. If the supply is covered under the category of mixed supply, then,  highest rate of tax would be applied.