TMI Blog2019 (1) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2(17) of the GST Act. The Applicant is supplying works contract service for an original work that is meant for commerce and business. It does not, therefore, satisfy the conditions laid down under Serial No. 3(vi)(a) of the Rate Notification - The Applicant’s supply of works contract service for construction of the Multi-modal IWT Terminal at Haldia, therefore, attracts GST at 18% rate under Serial No. 3(xii) of the Rate Notification. Ruling:- Amendments to Serial No. 3(vi) of Notification No. 11/2017–CT (Rate) dated 28/06/2017, brought about by Notification No. 24/2017-CT (Rate) dated 21/09/2017 and 31/2017 – CT (Rate) dated 13/10/2017, are not applicable to the Applicant’s supply of works contract service for construction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Description of the service Rate Condition (1) (2) (3) (4) (5) 3. 9954 (vi) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Service Tax Act, 2017, provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of- (a) a civil structure or any other original work meant predominantl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strative control of the Ministry of Shipping, Government of India. The supply is, therefore taxable @ 12% under the GST Act in terms of Serial No. 3(vi) of the Rate Notification, as mentioned above. In support of his argument the Applicant refers to letter no. 198/Representation/MOF/GST Council/2017/2899 dated 14/03/2018 of the GST Council to the contractee. In the said letter the Council draws attention to Notification No. 31/2017 CTR dated 13/10/2017, amending the Rate Notification, and says, The status of IWAI vis- -vis the definition of Government Entity as explained at para 4(x) of Notification No. 31/2017 CTR dated 13/10/2017 may be examined. It is to further add that consequent upon to this amendment, the composite supply of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orks contract service to a Government Entity, which is pointed out in the Council s above-mentioned letter. However, it is subject to the terms and conditions of Serial No. 3 (vi) of the Rate Notification, as described above. The concession under Serial No. 3 (vi) of the Rate Notification is contract specific. The recipient Government Entity should procure the works contract service in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be. If it is not covered under Serial No. 3(vi) (b) or 3(vi) (c), it should be a civil structure or an original work meant predominantly for use other than for commerce, industry, or any other business or profession [Serial No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucture so created is, therefore, for facilitating commerce and business. IWAI may, as indicated in its letter to the GST Council referred to above, levy and collect fees and charges from the users of the infrastructural facilities being created. In its letter dated 12/02/2018 to the GST Council IWAI has made no reference to this specific contract, but admits to levying a user charge on the commercial operators for navigating through the waterway using facilities as being created. All such fees and charges received are, according to the above-mentioned letter of IWAI, credited to the Consolidated Fund of India. The Applicant argues that the very fact of such credit to the Consolidated Fund of India clearly establishes that the fees so col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds from business as defined under section 2(17) of the GST Act. It is, therefore, evident that the Applicant is supplying works contract service for an original work that is meant for commerce and business. It does not, therefore, satisfy the conditions laid down under Serial No. 3(vi)(a) of the Rate Notification. The Applicant s supply of works contract service for construction of the Multi-modal IWT Terminal at Haldia, therefore, attracts GST at 18% rate under Serial No. 3(xii) of the Rate Notification. In view of the foregoing we rule as under RULING Amendments to Serial No. 3(vi) of Notification No. 11/2017 CT (Rate) dated 28/06/2017, brought about by Notification No. 24/2017-CT (Rate) dated 21/09/2017 and 31/2017 C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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