2022 (6) TMI 194 - AAR - GST

Classification of services - rate of GST - composite supply of services - provision of services provided to Shahjahanpur Nagar Nigam (Local Authority) - services of electrical lighting earthing fixation of junction boxes poles and cantilevers cabling infrastructure design supply installation testing and commissioning of various intelligent traffic management system - correct HSN / SAC code - HELD THAT - The subject Contract Agreement as enumerated in the brief facts is a Works Contract Agreement involving supply of goods and services for implementation of the Project. Vide Schedule II(6)(a) CGST Act Supply of Works Contract shall be treated as a supply of service. We find that the service recipient is Shahjahanpur Nagar Nigam Uttar Pradesh which is a local authority. Thus the subject Supply is covered vide Sr no 3(vi)(a) of Notification 8/2017-Integrated Tax (R) dated 28-6-17 at Tariff 9954 and liable to 12% IGST rate. It is found that this Integrated Tax Notification comes into play in subject matter as the supply is Inter State Supply. M/s Amnex s submission to take into account Notification 24/2017- CT(R) dated 21-9-17 as this Notification pertains to Intra state supply is dismissed. HSN/ SAC Code of Subject Supply - HELD THAT - The subject ITMS project is an original works involving both installation commissioning and maintenance. It is found that Tariff 9954 as mentioned in previous para is reflected at the said sr. no 3(vi)(a) of Notification 8/2017-IT(R). On reference of SAC 995468 Other installation services n.e.c. it is found that the said SAC description encompasses the ITMS project which is an original works installation and note that SAC 995468 occurs last in the numerical order of the of Tariff subheading 9954. In this backdrop and for the reason that the subject supply is made to a local authority and the rate being 12% IGST as per said sr no 3(vi)(a) to the said Notification and that Tariff 9954 is reflected at the said sr no 3(vi)(a) it is apt to consider SAC 995468 for the subject works contract without delving further.

Summary

Issues Involved:
1. Determination of the applicable rate of GST for services provided to Shahjahanpur Nagar Nigam.
2. Identification of the correct HSN/SAC code for the services provided.

Issue-wise Detailed Analysis:

1. Applicable Rate of GST:

M/s Amnex Infotechnologies Private Limited (M/s Amnex) was awarded a contract by Shahjahanpur Nagar Nigam for the implementation of an Intelligent Traffic Management System (ITMS). The scope of work included various activities such as assessment, supply, installation, testing, commissioning, and maintenance of ITMS components.

M/s Amnex argued that their contract constitutes a "composite supply" as defined under section 2(30) of the CGST Act, 2017. They further contended that the contract qualifies as a "works contract" under section 2(119) of the CGST Act, 2017, involving immovable property and thus should be taxed accordingly.

The Authority for Advance Ruling (AAR) examined the nature of the contract and found it to be a works contract involving the supply of goods and services for the ITMS project. The AAR referred to Schedule II(6)(a) of the CGST Act, which treats the supply of works contract as a supply of service. Given that Shahjahanpur Nagar Nigam is a local authority, the service is covered under Sr. No. 3(vi)(a) of Notification 8/2017-Integrated Tax (R) dated 28-6-17, attracting a 12% IGST rate. The AAR dismissed the relevance of Notification 24/2017-CT(R) dated 21-9-17, as it pertains to intra-state supply, whereas the subject supply is inter-state.

2. Correct HSN/SAC Code:

M/s Amnex sought a ruling on the appropriate HSN/SAC code for their services. The AAR noted that the ITMS project involves original works, including installation, commissioning, and maintenance. The AAR referred to Tariff 9954, specifically SAC 995468, which encompasses other installation services not elsewhere classified (n.e.c.). The AAR determined that SAC 995468 is appropriate for the ITMS project, given its comprehensive nature and the fact that it involves original works installation.

The AAR emphasized that this determination of the SAC code is specific to this case and should not be considered a general formula for other cases.

Ruling:

1. The supply is leviable to 12% IGST.
2. The SAC code for the services is 995468.