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2022 (9) TMI 512 - AAR - GSTClassification of supply - Composite Supply of Works Contract - supply of design and construction of Roads and Services of TP-1 Area Under Cluster-A of MBSIR on EPC Basis wherein both goods and services are supplied - Section 2(119) and section 2(30) of the CGST Act, 2017 - whether the Principal Supply in this case will be the “Construction of Roads” and attract rate of 6% as per Notification No. 11/2017-CT(Rate) dated 28.06.2017) as amended)? - HELD THAT:- The subject Service order is for supply of design and construction of roads and utility services on EPC Basis. The said supply includes construction of Roads and other utility service and not exclusively for construction of Road. The contract/ work order is for construction of Road and other utility services and not only for Road. The construction of road and other utility services involves goods and service, are covered under the definition of work contract service. In the instant case construction of road involves component of goods and services and therefore covers under the category of composite supply of work contract. Further, construction of TP-1 Road covers under this entry - under the entry No. 3(iv) of Notification only work contract service of construction of Road is covered and attracts concessional rate of GST @ 6%. The design and construction of utility service includes goods and service supply by the applicant is composite supply of work contract. Hence first condition is satisfied. The applicant has submitted that Mandal Becharaji Special Investment Regional Development Authority (MBSIRDA) is a local authority and in support of argument has submitted the screen shot of TAN wherein it is mentioned that “Sub-category- local authority' also submitted another screen shot wherein mentioned “Constitution of Business- local authority'. The applicant has not submitted any documents of State Govt. Authority by which it can be established that MBSIRDA is a local authority. Further even at the time of filing the Advance Ruling Application, the applicant itself was not aware that they are local authority as such applicant has put forth this argument during the Personal Hearing only. This facts shows that the applicant was aware that they do not fulfil the criteria of being local authority otherwise they should aware of this facts. MBSIRDA is constituted under Sub-section (1) of Section 8 and every Regional Development Authority constituted under sub-section (1) of Section 8 shall be a body corporate in terms of Sub-section (2) of Section 8. Thus, it is evident that MBSIRDA do not cover under the ambit of a local authority as defined under Section 2(69) of CGST Act, 2017. Hence Second condition is not satisfied. Therefore, the applicant supply of work contract services of utility do not cover entry No. 3 (iii) of Notification is not applicable in this case. The supply of construction of Road of TP-1 area is work contract service and covers under Entry No. 3(iv) of Notification and is liable to GST @ 6% from 1-7-2017 to 17-7-2022 - with effect from 18-7-22 supply of construction of roads under the present contract attracts GST @18% - The applicant service of construction of other Utility Service viz. Potable Water Supply system, Recycled Water Supply, Sewerage Collection System, Industrial Effluent Collection System, Storm Water Drainage Network involves components of goods and services, therefore covers under the category of Work Contract service and is liable to GST @18%.
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