Q : Whether Carrying out seismic survey is a service or works contract ?
Tripura VAT: Assessee agreed to carry out seismic surveys for an entity to assist it in gas exploration. It used certain equipments for surveys. Since, equipments always remained in control of assessee, therefore, there was no transfer of right to use goods and, thus the contract was of service and not works contract.
Facts of the Case :-
• The assessee contracted to provide 2D seismic data acquisition and basic processing services (“seismic surveys”) to an entity ‘J’ engaged in oil exploration. Assessee had to bring certain equipments for its own use to carry out the survey. It was argued by the State that such equipments had been transferred to J and therefore there was a sale.
• The question of law arose in the case was whether the services being rendered by the assessee were in nature of works contract or were pure and simple services.
High Court Decision :-
• The Court held that it was not a works contract because no works was to be done except carrying out a survey. The terms of the contract made it clear that there was no transfer of any property. The equipment of the assessee remained in control of assessee itself. Therefore, there was no transfer of right to use goods and the assessee was only rendering services which were only amenable to tax by the Union of India and not by the State.
HIGH COURT OF TRIPURA
Asian Oilfield Services
State of Tripura
AND S.C. DAS, J.
W.P. (C) NO. 352 OF 2011
MAY 5, 2015