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2019 (10) TMI 522 - AAR - GSTClassification of services - Rate of tax - Development of Airport by construction of Runway, Taxi track, Apron, Isolation bay, Perimeter Road including Earth work and other allied works - Up gradation of Airport to make it suitable for operation of any type of aircraft by extension of Runway, Construction of New Apron, Taxi track, Isolation bay including Link taxi, GSE area, Perimeter road, and allied works (Civil & Electrical) - Government entity or not? Whether the transaction is covered under the Sl.No. 3(vi) of the Notification No. 11/2017 - Central Tax dated 28.06.2017? HELD THAT:- The Composite supply of works contract as defined in section 2(119) of the CGST Act, 2017, provided to the Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession is liable to tax at the rate of 6% under the CGST Act. Similar notification also exists under the Karnataka Goods and Services Tax Act and also under the Integrated Goods and Services Tax Act (wherein the tax rate is 12% IGST). The applicant is undertaking a contract of works contract of construction of a civil structure or any other original works for the Airport Authorities of India. The Department of Personnel and Training, Government of India has shown in the company profile that the shareholding of the Government of India in the Airport Authorities of India is 100% and hence the AAI is a Government Entity. Whether the constructed works is a civil structure or any other original works? - HELD THAT:- The applicant is engaged in construction of new civil structures. The activities carried out by the applicant are covered under the relevant serial number of the Notification. Whether the works are meant predominantly for use other than for commerce, industry, or any other business or profession? - HELD THAT:- The airlines that use the runway and the aprons etc constructed by the applicant work with a view to earn profits. They are engaged in commerce and business. Entry at Serial number 3(vi)(a) specifically provides that works be ‘meant predominantly for use other than for commerce, industry, or any other business or profession’. As the works carried out by the applicant are used in the process of commerce and business, the applicant does not qualify for the works to be classified under Serial number 3(vi)(a) - the works contract performed by the applicant cannot be considered as covered under Serial No. 3(vi) of the Notification No. 11/2017 - Central Tax dated 28.06.2017 liable to tax at 6%, but are more appropriately covered under Serial No.3(ii) of the of the Notification No. 11/2017 - Central Tax dated 28.06.2017 liable to tax at 9%.
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