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2020 (9) TMI 1232 - AAR - GSTClassification of supply - composite supply of construction service to the Forest Department - exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 or any other exemption notification or not - if not exempt, then applicable rate of GST - Whether the Forest Department is correct in not giving GST to the applicant on the composite supply as the said department classified the same as exempted service? HELD THAT:- The applicant is providing composite supply (works contract) like construction of Machan, laying of foundation, construction of pillars etc as well as supply of labour service of clearing paths & areas in forest, loading & unloading of plants etc directly to the Forest Department. A works contract is essentially a contract of service which may also involve supply of goods in the execution of the contract. It is basically a composite supply of both services and goods, with the service element being dominant in the contract between parties. On perusal of documents submitted by the applicant, it is found that the contracts has been awarded by the Forest Department to the applicant for construction as well as for repair & maintenance of immovable property wherein transfer of property in goods is involved in the execution of such contracts. Thus the said contracts are duly covered under the definition of "work contract" service and thus it is a composite service. Further, as per Para 6 (a) of Schedule II to the CGST Act, 2017, works contracts as defined in section 2(119) of the Act shall be treated as a composite supply of services. Thus, there is a clear demarcation of a works contract as a composite supply of service under the Act. Taxability of said service provided to Government department - HELD THAT:- There is no exemption is available to the said service provided by the applicant to the Forest Department. However the said service is a taxable event in terms of entry no. 3(vi) (a) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) in as much as the services provided by the applicant to the Forest Department is not for commerce, industry or any other business or profession and attract GST 12%. Whether the Forest Department is correct in not giving GST to the applicant on the composite supply as the said department classified the same as exempted service? - HELD THAT:- The authority cannot pass the ruling on the same in as much the said question do not qualify for ruling in terms of section 97(2) of the Act.
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