9911796707
TMI Blog2020 (6) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that M/s. Railtel Corporation of India ltd. by whom they have been awarded the tender has 100% share holding by Union Government and is a Government of India Enterprise. 3. The applicant has also submitted photocopies of (i) Tripartite Memorandum of Understanding (MOU) between Department of Telecommunications of Government of India, Government of Gujarat and Broadband Network ltd. dated 12.04.2013. (ii) Letter of acceptance dated 26.10.2017 issued by M/s. Railtel Corporation of India ltd. to M/s. Shree Hari Engineers and Contractors, Bhuj-Kachchh containing the schedule of work to be carried out by the applicant alongwith the rates. (iii) Agreement/Contract between M/s. Railtel Corporation of India ltd.and M/s. Shree Hari Engineers and Contractors, Bhuj-Kachchh dated 09.02.2018 for Rs. 1,69,75,575/- (iv) GST Notification No:24/2017-CT dated 21.09.2017. (v) Few R.A. bills issued by the applicant to M/s. Railtel Corporation India ltd. 4. The applicant has put the following question for advance ruling in their application:- "Whether the Contract with Railtel Corporation of India ltd. will fall under the Notification 24/2017-Central Tax (Rate) Sr.No.3(iv)-Construction Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia ltd. to further execute the work entrusted by Government of India for laying of Optical fiber cable, that floating tender for the work, that execution, supervision of the work etc. is done by M/s. Railtel Corporation of India ltd. on behalf of M/s. Bharat Broadband Network ltd., that they carry out the activity of excavation of trenches and laying of optical fiber cable and post execution of works contract, they bill to M/s. Bharat Broadband Network ltd. and submit the bills and other documents to M/s. Railtel Corporation of India ltd. for their review and processing on behalf of M/s. Bharat Broadband Network ltd., that M/s. Bharat Broadband Network ltd. is an entity incorporated under the sub-category of 'Union Government Company' under Companies Act and have attached a copy of the said company's master data. The applicant has attached a copy of MGT-7( as available from the database of Ministry of Corporate Affairs) wherein as per para-VI(a)(Sr.No.2),the Central Government holds 100% shares in M/s. Bharat Broadband Network ltd. and has stated that the work executed and supplied to M/s. Bharat Broadband Network ltd. satisfies the condition of Government entity. The applicant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 2017 (herein after referred to as the 'CGST Act'), in the case of the applicant. As per the letter of acceptance/work order issued by M/s Railtel Corporation India ltd. No.Rail Tel/Tender/OT/WR/NOFN/2017-18/04/LOA dated 26.10.2017 as well as the agreement dated 09.02.2018 signed between the applicant and M/s. Railtel Corporation ltd., the applicant has been awarded a contract for excavation of trenches and laying of Optical Fibre Cables(OFC) through ducts, testing, commissioning of OFC and maintenance in the 01(one) Block(Nakhatrana) of Kachchh District of Gujarat State. The amount involved in the said contract is Rs. 1,69,75,575/-. The applicant has also submitted another letter of acceptance/work order No.Rail Tel/Tender/OT/WR/NOFN/2017-18/49/LOA dated 12.05.2018 issued by M/s Railtel Corporation India ltd. regarding a contract for excavation of trenches and laying of Optical Fibre Cables(OFC) through ducts, testing, commissioning of OFC and maintenance in the 02 Blocks of Abdasa and Nakhatarana of Kachchh District of Gujarat State valued at Rs. 1,86,41,523/-. Further, as per the Tripartite Memorandum of Understanding signed between Department of Telecommunications of Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Notification 24/2017-Central Tax (Rate) Sr.No.3(vi)-Construction Service or Original Work to Government Authority, and the rate of tax applicable be 12%?" 11. The issue for consideration is whether the two contracts in question are covered under entry No.3(vi)(a) of Notification No.24/2017-Central Tax(Rate) dated 21.9.2017 (which amends original Notification No.11/2017-Central Tax(Rate) dated 28.06.2017) as amended from time to time, liable to tax at 12% (CGST + SGST together) or not. 12. The entry no.3(vi) of the above notification reads as under: Sl.No. Heading Description of Services Rate Condition (1) (2) (3) (4) (5) 3. Heading 9954 "(vi) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services 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 works meant predominantly for use other than for commerce, industry, or any other b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant, machinery or equipment or structures, whether fabricated or otherwise. 14. In view of the above, services provided by applicant would be liable to tax at the rate of 12% in terms of entry No.3(vi) of Notification No:11/2017-Central Tax (Rate), as amended from time to time, subject to the following conditions: (i) It must be a composite supply of works contract as defined in section 2(119) of the CGST Act, 2017. (ii) The contract should be by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of civil structure or any other original works. (iii) It must be provided to the Central Government, State Government, Union Territory, a local authority, a Government Authority or a Government Entity. (iv) The civil structure or original works must be predominantly meant for use other than for commerce, industry, or any other business or profession. 14.1. Works Contract is defined under clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017, as under: [(119) "works contract" means a contract for building, construction, fabrication, completion, erection, installation, fitting out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries. 9. Khadi, village and cottage industries. 10. Rural housing. 11. Drinking water. 12. Fuel and fodder. 13. Roads, culverts, bridges, ferries, waterways and other means of communication. 14. Rural electrification, including distribution of electricity. 15. Non-conventional energy sources. 16. Poverty alleviation programme. 17. Education, including primary and secondary schools. 18. Technical training and vocational education. 19. Adult and non-formal education. 20. Libraries. 21. Cultural activities. 22. Markets and fairs. 23. Health and sanitation, including hospitals, primary health centres and dispensaries. 24. Family welfare. 25. Women and child development. 26. Social welfare, including welfare of the handicapped and mentally retarded. 27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes. 28. Public distribution system. 29. Maintenance of community assets. Functions entrusted to the municipalities under 243W of the Constitution of India: 1. Urban planning including town planning. 2. Regulation of land-use and construction of buildings. 3. Planning for economic and social ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing details: (i) type of work to be carried out by the applicant i.e. "Excavation of Trenches and laying of OFC through ducts, testing, commissioning of OFC and maintenances etc. (ii) reference to tender issued by M/s. Railtel Corporation of India ltd. for the work to be done. (iii) value of the work. (iv) details of equipments and materials to be supplied by the applicant for the execution of the work (v) terms and conditions of the work etc. However, there is no mention therein to the Tripartite Memorandum of Understanding signed between Department of Telecommunications of Government of India, Government of Gujarat and Bharat Broadband Network ltd. dated 12.04.2013 nor is there any reference therein which infers that the work has been entrusted to them by any Government, Union Territory or a local authority. Thus, the work carried out by the applicant for M/s. Railtel Corporation of India ltd. is not a function entrusted by the Central Government, State Government, Union Territory or a local authority. In view of the above, M/s. Railtel Corporation of India ltd. does not fall under the category of 'Government Entity'. Hence the third condition is not satisfied. 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether it is done for a pecuniary benefit, and any activity done in connection with or incidental or ancillary to such activity is also included in the scope of 'business'. 15. Thus, the applicant in the course of providing work contract service to M/s. Railtel Corporation of India ltd. (on behalf of M/s. Bharat Broadband Network ltd.) is involved in the laying of trenches and laying optical fiber cables (goods) through which they are providing/supplying internet connectivity to the gram panchayats. However, it cannot be construed that the optical fiber cables laid underground are meant predominantly for use other than for commerce, industry, or any other business or profession as stated by the applicant. Thus, the resultant structure that has arisen under the ground in the form of optical fiber cables due to the work executed by the applicant can be used for commerce, industry, or any other business or profession. Hence the fourth condition mentioned at para-14 above is not satisfied. Therefore, we are of the view that the contract in question does not satisfy the conditions envisaged in 3(vi) of Notification No.24/2017-Central Tax (Rate) dated 21.09.2017. 16. In view of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
