TMI Blog2019 (3) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner, CGST Division, Rudrapur Present for the Applicant: Shri N.K. Gupta, DGM (Finance), Shri J C Pant, Senior Manager (Law) Present for the Jurisdictional Officer: None Present for Concerned Officer: None Note : Under Section. 100(1) of the Uttarakhand Goods and Services Tax Act, 2017, an appeal against this ruling lies before the appellate authority for advance ruling constituted under section- 99 of the Uttarakhand Goods and Services Tax Act, 2017, within a period of 30 days from the date of service of this order. RULING 1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 (herein after referred to as Act) and the rules made thereunder filed by M/s NHPC, Admin Building, Tanakpur Power Station, Banbasa, Uttrakhand seeking an advance ruling on the issue: (a) Whether the Notification No. 12/2017-Centra1 Tax (Rate) dated 28.06.2017 (as amended from time to time) is applicable to the contractors/ sub- contractors involved in the construction of Indo-Nepal Border Road or otherwise. 2. Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad will be financed out of the budgetary outlays of MEA under the budget head Aid to Nepal . Initially NHPC can spend the money, if required, subsequently the same can be recouped from the budget of MEA to NHPC directly. Budget releases will be made by MEA to NHPC which is executing the project as a turnkey agency of MEA based on the recommendation of the Ministry of Power. 7. The applicant further submitted the MOU dated 03.10.2018 signed between General Manager, NHPC Ltd, Tanakpur Power Station, Champawat, Uttarakhand (herein after referred as client/department) and Superintendent Engineer, PWD, Champawat, Uttarakhand (herein after referred as construction agency). The relevant portions of the same are summarized as under: i. On the proposal of client, construction agency has agreed to do construction and related works of construction of 1.3 km motor road from Tanakpur Barrage to Brahmdev in District Champawat ii. Total cost of the project is ₹ 6.72 cr including GST contingencies as indicated in the administrative and financial sanction issued as informed by General Manager, NHPC, Tanakpur Power Station vide letter dated 02.07.2018. iii. The construction ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of construction of road by Ministry of External Affairs, Govt. of India (in short MEA ) wherein the funds will be provided by MEA from its head Aid to Nepal to M/s NHPC Ltd. It means that the funds provided by MEA to M/s NHPC Ltd are in the form of grants. The function of M/s NHPC Ltd in the said work has been defined as turnkey agency . The issue of GST liability on the applicant on this matter has already been decided by us vide Ruling No.10/2018-19 dated 22-10-2018 wherein the activity of the applicant was held exempted from GST in terms of Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 (as amended from time to time). 8.4 The applicant in their present application has sought advance ruling on the applicability of GST on sub-letting of work entrusted to PWD, Uttarakhand and contractor hire by PWD, Uttarakhand for completion of said work. On this issue we have different views and are discuss as under: (a) [Ruling per: Vipin Chandra, Member]- In the background of the issue in hand, the applicant has earlier sought the advance ruling on the applicability of GST on the activity being carried out by them and vide Advance Ruling No. 10/2018-19 dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); (b) canal, dam or other irrigation works; (c) pipeline, conduit or plant for (i) Water supply (ii) water treatment, or (iii) sewerage treatment or disposal 6 (iv) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by Way of construction , erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (a) a road , bridge, tunnel, or terminal for road transportation for use by general public; (b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; (c) a Civil structure or any other original works pertaining to the In-situ rehabilitation of existing slum dwellers using land as a resource through private participation under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana, only for existing slum dwellers; (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have been procured by said the entity relation to a work entrusted to it by the Central Government, State Government, Union territory or authority, as the case may be (viii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 and associated services, in respect of offshore works contract relating to oil and gas exploration and production (E P) in the offshore area beyond 12 nautical miles from the nearest point of the appropriate base line. 6 I further find that Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017 was further amended vide Notification No. 1/2018-Central Tax (Rate) dated 25th January, 2018 and the relevant portion of the same reproduce as under: 3 4 5 (ix) 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 Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully I have gone through the views expressed by Hon ble member Shri Vipin Chandra. I am having certain reservations on the opinion expressed. In the present case I find that Ministry of External Affairs (herein after referred to as MEA) has allotted the work i.e 'construction of road' to the NHPC (applicant). The applicant sub-let the said work to PWD, Uttarakhand who further sub-let the work to a contractor. The applicability of GST on the applicant for construction of road' has already been decided by the authority vide Advance Ruling No 10/2018-19 dated 22-10-2018 wherein it was held that the services provided by the applicant to MEA is exempted in terms of Notification No. 12/2017-Central Tax (Rate) dated 28-06- 2017 [amended vide Notification No. 32/2017-Central Tax (Rate)] and the relevant portion of the same is reproduced as under: S.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (percent.) Condition 1 2 3 4 5 9C Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the sponsor of the statute can be pressed into service so as to know the real purpose or intent of the legislature. In this context I find that the legal facts given under Fiscal Interpretation of Statutes has to be read in conjunction with the recommendation of 25th GST Council (supra) and I observe that where literal interpretation may not serve the purpose or may lead to absurdity, the doctrine of purposive interpretation can be adopted which is based on the understanding that the authority is supposed to attach that meaning to the provisions which serve the purpose behind such a provision and the same was upheld by the Hon ble Supreme Court in its judgment (supra). Therefore I observe that the purpose or object of the GST Council is to extend benefit to the last chain of said supply and reason for the same is to provide equal opportunities and equal level playing fields to business entities and avoid discrimination. Thus I am of the view that the recommendations made by the GST Council in this regard makes it clear that if GST rate on the work contract is 12% or 5% then sub-contractor is also liable to discharge his GST liability @ 12% or 5% as the case may b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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