2023 (8) TMI 1206 - AUTHORITY FOR ADVANCE RULING, TAMILNADU

Applicable rate of tax - works contract services undertaken by the applicant to M/s Tamil Nadu Urban Habitat Development Board and M/s Tirunelveli Smart City Limited with effect from 01.01.2022 consequent to amendment of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 by Notification No. 15/2021-C.T (Rate) dated 18.11.2021 effective from 01.01.2022.

HELD THAT:- Tirunelveli Smart City Limited falls under the definition of ‘Governmental Authority’ within the meaning of explanation in Para 4 (ix) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017, as amended vide Notification No. 31/2017 CT (Rate), dated 13.10.2017.

As per definition of local authority given at para 8.2.4, the term local authority inter alia includes certain bodies / authorities, more specifically “any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund” in section 2(69) (c) of the CGST Act, 2017 - it is clear that Tirunelveli Smart City Limited has been constituted with a different purpose to implement certain functions and it cannot be equated to a local body and hence it can be concluded that Tirunelveli Smart City Limited is not a Local Authority.

The effective rate of duty on work executed for Tirunelveli Smart City Limited, which is a ‘Government Authority’ and the nature of service provided by the applicant is covered under entry in serial number 3(vi) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 till 31.12.2021. However, after omission of ‘Government Entity’ from the description of service under the said entry vide Notification No. 15/2021-C.T (Rate) dated 18.11.2021 read with Notification No. 22/2021-C.T (Rate) dated 31.12.2021 with effect from 01.01.2022, the services of the applicant are covered under serial number 3 (xii) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 and attract CGST of 9%.