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2021 (12) TMI 609 - AAR - GSTClassification of services - Work Contract Services on Construction of Roads - Tax Rate to be charged by the sub-contractor to main contractor - rate of tax of 12% or 18%? - HELD THAT:- In the present case, the works contract i.e. composite contract of construction of roads has been awarded by the Aurangabad Municipal Corporation to M/s J.P. Enterprises (Main contractor) and the said main contractor has awarded part of said contract to the applicant. The applicant is thus a sub-contractor and for the supply undertaken, has issued invoices by charging GST @ 12% - the supply of service under the impugned contract is not yet completed. It is still a work being undertaken by the applicant at the time of filing of the application and therefore satisfies the provisions of Section 95 of the CGST Act. Hence, the subject application cannot be rejected outright on the ground contended by the jurisdictional officer. Hence, the application of the applicant is being considered. As per Sr. No. 3 (ix) of the notification amended by Not cation 1/2018-Central Tax (Rate) dated 25 January 2018, “Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity.” attracts levy of GST at 12%. The jurisdictional officer has stated that, since the activity undertaken by applicant, construction of roads is related to item (iv) of the original notification 11/2017 and hence its does not qualify for tax rate of 12% GST due to the fact that the said Entry No. (iv) is not mentioned in the amended Sr. No. 3(ix). Hence, according to the jurisdictional officer, as the activity undertaken by applicant does not qualify for 12% tax rate, it should attract 18% tax rate i.e. 9% CGST and 9% MGST.” Similarly, in the case of IN RE: M/S. BUILDING ROADS INFRASTRUCTURE & CONSTRUCTION PRIVATE LIMITED, [2021 (8) TMI 526 - AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH] held that the ‘works contract’ services pertaining to construction, erection, commissioning and completion of ‘Bridges and Roads’ provided by the applicant as a subcontractor to the Contractors who have been awarded the construction contract pertaining to construction/widening of roads by the Government Entities such as National Highway Authority of India, falls under Serial No 3 (iv) of the Notification No.11/2017 as amended from time to time and chargeable to GST @ 12%.
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