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2020 (7) TMI 381 - AAR - GSTClassification of Services - rate of tax - applicant agreed for construction work namely “Construction of Building for Office space/IT space at IT park, Mangalgiri as awarded by APIIC - composite supply of works contract - Governmental Authority/entity or not - construction work taken up by the applicant is meant for business or otherwise. Whether APIIC which awarded construction work to the applicant would qualify for a Governmental Authority/entity or not? - HELD THAT:- Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC) was formed in 1973 by the GO No: 831 dated 10-SEP-1973 issued by Government of Andhra Pradesh. As seen from the share holding ratios of the 41st Annual Reports for the years 2013-14 as made available by APIIC website, the Government of Andhra Pradesh including its nominees is having 100% of share holding and thus it is covered under the definition of 'Government Entity' under the above said provisions. Therefore, we conclude that M/s APIIC is a “Government Entity” for the purpose of GST matters. Whether the construction work in which the applicant is engaged in is meant for any business or otherwise? - HELD THAT:- As seen from the 41st Annual Report for the year 2013-14 as made available by APIIC in their website https://www.apiic.in/Annualreports.html, they are engaged in land acquisition and development and allotment of plots and sheds to various industrial ventures in the State making investments in joint venture, in associate companies , in related party companies, in subsidiary companies etc., and the income they are getting is revenue from operations like sale of land, houses, interest on hire purchase and long term borrowings etc. - It is evident from the above statement that the activities of M/s APIIC are business activities and not otherwise. Moreover, the applicant did not provide any information or documentary proof evidencing that the construction/ building is for use other than for commerce, industry, or any other business or profession to be eligible for concessional rate of 12% available under Notification No.24/2017 - CT (Rate) dated 21.09.2017. The contract entered by the applicant is classifiable under SAC Heading No. 9954 under construction services, and it falls under entry no (ii) of serial No.3 of notification no. 11/2017 Central Tax (Rate) dated 28.06.2017 i.e., Composite Supply of Works Contract as defined in clause 119 of Section 2 of Central Goods and Services Act, 2017 and the applicable rate of tax is 18%.
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