The Maharashtra Appellate Authority for Advance Ruling (AAAR) has ruled that project management consulting services are subject to 18% GST. The two-member bench comprising of D.K. Srinivas and Rajiv Kumar Mitta in the case upheld the ruling of AAR’s and observed that the services provided through their professionals are in the nature of professional and technical services as the services which are provided require technically qualified and trained professionals and staff. Therefore, the services which are provided by the appellant will merit classification under SAC 998349 with the description “Other technical and scientific services. Therefore, the appellant is part of Worley Parsons Limited, which is a global engineering company providing project delivery and consulting services to the resources and energy sectors and other complex process industries. It was observed that the Appellant has a workforce of more than 4,500 professionally qualified people in India who provide PMC and EPCM services to local and international customers. The PMC services are being provided to various natural oil and gas companies as well as oil and gas mining and exploration companies. It has been sought by applicant an advance ruling on the issue that weather the service which are provided by the appellant are classified under SI No. 21(ia) of heading 9983 of the rate notification as “the Other professional, technical, and business services which is relating to exploration, mining, or drilling of petroleum crude or natural gas or both” and attract 12% GST. It has been ruled by the AAR that the professional, technical, and business services supplied by the appellant to VL are clearly covered under residual entry no. 21(ii) of the rate notification, wherein the tax is attracted at the rate of 18% GST. It has further been contended by the appellant that they are out the functions pertaining to the management and supervision of the project that should otherwise have been carried out by the appellant’s client, but the same has been outsourced to them in terms of the agreement entered into between them. Thus, support services are being provided by them to their clients. It has further been argued by the appellant that because of their service which relates to projects that will aid in the expansion of their client’s mining activities and they should be construed as “support services for exploration, mining, or drilling of the petroleum crude or natural gas or both. Accordingly, it has been held by the AAR that the services which are provided by the appellant are not related to the exploration, mining, or drilling of petroleum, natural gas, or both. The Applicant’s Name: M/s. Worley Services India Pvt. Ltd.
