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2022 (4) TMI 403 - AAR - GSTClassification of supply - Rate of GST - composite supply of works contract - work order of the Central Railway Department carried out by the tax payer - predominantly earth work or not - taxable at 5% as per sub clause (Vii) of the clause 119 of Section 2 of the CGST Act 2017 or otherwise - applicability of N/N. 31/2017-C.T. (Rate) dated 13.10.2017 - Government entity or not - HELD THAT:- The three conditions to be satisfied for the impugned supply to be considered under the above mentioned Sr. No 3 (vii) are:-(a) the supply should be a Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, (b) such supply should be involving predominantly earth work (that is, constituting more than 75per cent, of the value of the works contract) and (c) such supply should be provided to the Central Government, State Government, Union territory, local authority, a Governmental Authority or a Government Entity. In the subject case, as per the impugned tender, the applicant is to undertake the earthwork in embankment, cutting and bridge approaches and construction of minor bridges and RUBs in the section between Beed to Parli from Ch. 175000 to 185000 m under Ahmednagar-Beed-Parli vajinath New Broad Gauge line project (project) by the Central Railway Department. From the submissions made by the applicant, it is found that in the subject case there is a supply of both, goods as well as services and therefore we have no hesitation in holding that the subject activity is a composite supply - thus, the impugned activity is a Composite supply of works contract as defined in clause (119) of section 2 of the CGST Act, 2017. The second condition mentioned in para 5.6 (b) is that the said Composite supply of works contract as defined in clause (119) of section 2 of the CGST Act, 2017 should be involving predominantly earth work (that is, constituting more than 75 per cent of the value of the works contract) - In the subject case as per the submissions, the impugned activities conducted by the applicant majorly involve, the supply consists majorly of activities such as Blasting/Cutting the Hard Rock, Removing of Excavated Stuff, levelling the ground, Cement Concreting, rock bolting, construction of approach roads to bridges, earthwork filling in embankments, etc. - the submissions made on the basis of site photographs etc. by the jurisdictional officer is relied upon that the applicant is supplying Composite Supply of Works Contract as defined in clause (119) of section 2 of the CGST Act, 2017 involving predominantly earth work (that is, constituting more than 75 percent of the value of the works contract). The third condition mentioned in para 5.6 (c) is that, the impugned supply should be provided to the Central Government, State Government, Union territory, local authority, a Governmental Authority or a Government Entity. The Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President - the Central railway Department, which has given the impugned work to the applicant, can be termed as Central Government. The status of Railways is that of Government only but it is a business entity. Hence, in the subject case, the applicant is making the impugned supply to Central Government. Thus, the applicant is supplying Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, involving predominantly earth work (that is, constituting more than 75per cent, of the value of the works contract) and such supply is being provided to the Central Government, i.e. Central railways. Therefore, the impugned supply of the applicant is covered under the provisions of Sr. No. 3 (vii) of Notification No. 11/2017 - CTR dated 20.06.2017 as amended from time to time.
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