2023 (1) TMI 139 - AAR - GST

Classification of services - applicability of GST rate - Works Contract - composite supply - receipt of contract for new construction of CBD railway station, platform, parking, building and all other civil constructions within the boundary of the station - applicability of Entry No.3(v) of Notification No.11/2017- Central Tax (Rate) Dated 28 June 2017 - HELD THAT:- In the instant case the eligibility or otherwise of reduced rate of GST under Notification no. 11/2017 Central Tax (Rate) as amended, provided under S.no. 3(v) ibid, is the subject matter of this proceeding. The aforesaid Notification stands amended vide Notification No. 03/2022-Central Tax (Rate)New Delhi, the 13thJuly, 2022, effective from 18.7.2022.

In the instant case under consideration, the applicant has furnished the copy of letter of acceptance cum work order dated 31.3.2022 issued by CEO, NRANVP, Raipur for construction of CBD Railway station at Nava Raipur - As SAC 9954 covers construction services we now proceed to analyse the compliance of other vital conditions much essential for being eligible to the reduced rate of tax claimed by the applicant, as stipulated under S.no. 3 (v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended.

Whether the instant supply is a Composite supply? - HELD THAT:- It is seen that the intended works to be undertaken by the applicant is construction of CBD Railway station. Now for the instant supply of Civil works to be undertaken by the applicant to be categorized as “composite supply” there needs to be supply of goods and services and the same should be a natural bundle of supply of both and supplied in conjunction with each other in the ordinary course of business. No such details of supply of goods for the intended civil works is forthcoming from the letter of acceptance furnished by the applicant. Thus without substantial evidence of the works contracted/undertaken, like materials/ goods to be supplied, related schedules, etc., it is practically impossible for this authority to conclude or for that matter hold that the works undertaken as is forthcoming form the “letter of acceptance cum work order' and the tripartite agreement dated 25.4.2022 furnished by the applicant is ‘composite supply' perse - this authority on the basis of records furnished and available on record, is not in a position to conclusively hold that the works mentioned in the “letter of acceptance cum work order issued by Chief Executive Officer, Nava Raipur Atal Nagar Vikas Pradhikaran supra or tripartite agreement, intended to be undertaken by the applicant qualifies being treated as 'Composite supply' as per Section 2 (30) of CGST Act, 2017.

The work undertaken by the applicant as is forthcoming from the same, it is seen that the work awarded to the applicant are Original work' as defined in the notification. Further, on a thorough look into the text of the claimed exemption as provided under S.no. 3 (v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended, vide Notification 01/2018 Central Tax (Rate) dated 25.01.2018. we find that the entry at 3(v)(a) is specific to the composite supply of works contract pertaining to railways including monorail and metro.

It would be appropriate to conclude that till 17.7.2022, the applicability of Sl.no. 3 (v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended to the applicant, M/s Shreejikrupa Project Limited, H.No. 289, behind C.S.E.B Office, Sunder Nagar, Raipur-492001. Chhattisgarh GST1N-22AALCS6689K1ZNfor the said work, is subject to the fact that apart from the other stipulated conditions therein as discussed, the works undertaken by them satisfy the condition of it being “Composite supply” as defined under Section 2 (30) of the CGST Act, 2017, the same are 'Works Contract' as per Section 2 (119) of the Act and that the same “pertain to railways” - As the applicant has been found wanting in compliance of the stipulations provided under Sr. no. 3(v) (a) of Notification no. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended including the condition that the work “pertains to railway”, the said construction works attract GST @ 18% under the residual entry at Sr. no. 3 (xii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended.