TMI Blog2021 (9) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... works, irrespective of the recipient being Government or not, then sub-sub contractor is also eligible for said entry in Notification. But the Notification lays down the condition that supply should be provided to Government by main contractor and only sub contractor to said main contractor enjoys the benefit of being covered under cited entries of said NT. As said applicant is sub-sub contractor and supplies service to M/s Radhe sub contractor and not to M/s JSIW main contractor, the conditions of said entry 3(iii)/ 3(ix) to said Notification is not satisfied. GST rate on subject supply is 18% for services supplied by the sub-sub-contractor to sub-contractor M/s Radhe and supply merits entry at Heading 9954, Entry No 3(ii) of Notification No.11/2017-CT(R) dated 28-6-17. - GUJ/GAAR/R/43/2021 - - - Dated:- 11-8-2021 - SANJAY SAXENA AND ARUN RICHARD MEMBER Present for the applicant : Shri R.B. Rakholia, Advocate. BRIEF FACTS: The applicant M/s. Shreeji Earth Movers, Village-Kolithad, Taluka-Gondal, Rajkot-360311 is engaged in providing works contract service directly to sub-contractors who execute the contract with the main contractor for original contract wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule of GST rate for service under GST, composite value of works contract is classified as under: SAC Code Description of Services Rate in % (iii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Government, a local authority or a Governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, - (a) a historical monument, archaeological site or remains of national importance, 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. 12% 4. The applicant submits that sub-contractors providing services to the main contractor is further classified only under two categories as under: SAC code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the terms Contractor and Sub-contractor are not defined under the CGST Act, 2017 but as per general definition: Contractor means a person or firm that undertakes a contract from the employer to provide materials or labour to perform a service or do a job at a specified price. A sub-contractor means a person who is hired by a general contractor (or prime contractor, or main contractor) to perform a specific task as part of the overall project or the total project at a specified price for services provided to the project by the originating employer. 6. The applicant submits that when the contractor awards either wholly or partially, the contractual obligation to a sub-contractor the contract remains the same and the identity of the contract does not change; that when the contractor awards either wholly or partially, the work to be performed by the contractor as well as the sub-contractor remains same and identical to what is specified in the contract between the main contractor and the employer; that it can also be seen from the definition quoted above that sub-contractor is not doing anything other but only what is specified in the contract between the main c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ruling in the case of M/s. Shree Construction. (iii) Mary Matha Construction Company (2018) 98.Taxmann Com.164) (AAR-Kerala). (iv) Kunal Structure India pvt.ltd.(2021)127.Taxmann.123. (v) State of Andhra Pradesh and others versus Larsen Tubro ltd. others. Question on which Advance Ruling sought? 9. The applicant has sought Advance ruling on the following: a) At what rate of tax the liability should be determined on services provided by us (sub-contractors) to the main contractor pertaining to the irrigation, construction and maintenance works to the irrigation department, State of Gujarat? b) Under which head we should classify our services to execute irrigation, construction and maintenance work supplied to the irrigation department, State of Gujarat? c) Whether to charge a tax rate of 12% GST or 18% GST? Personal Hearing: 10. Shri R.B.Rakholia, Advocate appeared for the hearing (Video Conferencing) on 27-7-2021 and reiterated the contents of the application. FINDINGS: 11. At the outset we would like to make it clear that the provisions of CGST Act and GGST Act are in pari materia and have the same provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub Contractor Radhe Construction JSIW providing service to Government Sr no 3(ix) 3 Sub sub contractor Applicant Radhe Construction Not eligible for entry at Sr no 3(iii)/(ix) 15.2 The Wording in the said Notification, when clear, plain and unambiguous and only one meaning can be inferred, we are bound to give effect to the said meaning. We give due regard to the clear meaning of words and matter should be governed wholly by the language of the notification. We note that the wordings of the Notification and its conditions imposed for satisfaction to merit entry in the said serial number. We cannot allow any scope for intendment. We find that our view of strict interpretation of the wordings of the said notification is in compliance to the Supreme Court Judgements as follows: 2015 (324) E.L.T. 656 (S.C.) [ para 31] 2011 (265) E.L.T. 14 (S.C.) [ para 10] 1989 (40) E.L.T. 239 (S.C.) [ para 11]. 1978(2) ELT(J350)(SC) [ para 5] CCE1995(77) ELT474(SC) [ para 16]. 16. M/s JSI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of Hospital buildings in Government Medical College, Construction of Non science building at Central University of Kerala and Construction of Biotech lab and Administrative Block at Life Science Park, Trivandrum which is different from the present case, as in this cited Ruling, the appellant was subcontractor to the Principal contractor. iv. Kunal Structure India Pvt. Ltd.(2021) 127.Taxmann.123. This Ruling pertains to GST rate for sub-contractor of the main contractor for construction of Medical College. v. Further, Rulings of AA/ AAA as per the provisions of Section 103 of the CGST Act shall be binding only on the applicant who had sought it and the jurisdictional officer in respect of the applicant. vi. State of Andhra Pradesh and others vs Larsen Tubro ltd. others: In this case, the question which was considered was whether the A.O. was right in his conclusion that there were two deemed sales, one from main contractor to the contractee and the other from the sub-contractors to the main contractor as there was no privity of contract between the contractee and the sub-contractors. We note that the subject matter before us is not covered und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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