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The activity of wet-Leasing is squarely classifiable under SAC 9973 Leasing or rental services with or without operator as held by the Lower Authority and we uphold the same. the benefit of entry at 3(v)(a) of Notification No.11/2017-C.T.(Rate) is not applicable

Classification of service- In the instant case, we find that the appellant is engaged in construction of Shed, Provision of M& P’s in ICF Shell/ Furnishing Division/ retro-fitment/ re-conditioning/ re-sitting/ disposal of obsolete M&P’s of Shell division including wet leasing of M&P’s and associated Electrical Works on turn key basis at ICF Chennai. The appellant had sought ruling on whether the above works awarded to them are composite supply of services and the benefit of SI.No. 3 (v) of Notification No. 11/2017-C.T.(Rate) is applicable to subject works. The Lower Authority has ruled that the works undertaken as per Schedule-I, II and III is a composite supply of works contract and the benefit of Sl.No. 3(v) of Notification No. 11/2017-C.T.(Rate) is applicable; Supply in the agreement for wet leasing as per Schedule V are composite supply of services and not ‘works contract’ and therefore not eligible for the benefit under Sl.No. 3(v)(a) of the notification. Held that- Just because, there is a transfer of property in goods after the lease period, the activity is not a works contract. The activity of wet-Leasing is squarely classifiable under SAC 9973 Leasing or rental services with or without operator as held by the LA and we uphold the same. Therefore the benefit of entry at 3(v)(a) of Notification No.11/2017-C.T.(Rate) dated 28.06.2017 is not applicable in respect of Wet-Leasing of the M&Ps.
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