Classification of service— In the instant case, the applicant manufactures telecom products such as optic fiber, optic fiber cable, etc.; lays the optic fiber cables to create a network, sets up control centers, installs equipment necessary to operate network for desired purpose, commissions network and any other ancillary activity that may be necessary for creation of network infrastructure for its customers in telecom industry by way of 'turnkey contracts'.

The Indian Navy has entrusted the setting of a countrywide IP/MPLS based multiprotocol converged network, Naval Communication Network as core infrastructure for supporting strategic and operational needs of Navy, to Bharat Sanchar Nigam Limited which in turn has contracted with the Applicant to set up the network including the responsibility to supply all the material and services required for setting up of network, training services to operate the same and supply of satellite connectivity vehicles required for ensuring seamless connectivity during breakdown of network. 

The applicant has submitted that it had previously approached for advance ruing in the same matter and that this Authority had ruled that

(i). The supply of goods or services for 'setting up of network' would qualify as a composite supply of 'works contract' as defined under Section 2(119) of the CGST Act and

(ii) Activities of the Applicant were covered by sub-clause (ii) of Entry No. 3 of rate Notification and attracted GST at the rate of 18%.

The Authority, vide its earlier order had classified the subject activities under the Entry 3(ii) of Notification No. 11/2017 - CTR- dated 28.06.2017, after considering all the headings of the said notification including Sr. No. 3 (vi) (a). The remaining headings are still in existence today and no new headings have been incorporated in the said notification after Notification No 3/2019 Dated 29th March, 2019, which can be considered to be relevant to the applicant's subject activities.

Held that— The supplies of the Applicant are covered by sub-clause (xii) of Entry No. 3 of Notification No. 11/2017-CTR dated 28.06.2017 as amended and taxable @ 18% GST.