TMI Blog2021 (12) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 25 January 2018, 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 Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity. attracts levy of GST at 12%. The jurisdictional officer has stated that, since the activity undertaken by applicant, construction of roads is related to item (iv) of the original notification 11/2017 and hence its does not qualify for tax rate of 12% GST due to the fact that the said Entry No. (iv) is not mentioned in the amended Sr. No. 3(ix). Hence, according to the jurisdictional officer, as the activity undertaken by applicant does not qualify for 12% tax rate, it should attract 18% tax rate i.e. 9% CGST and 9% MGST. Similarly, in the case of IN RE: M/S. BUILDING ROADS INFRASTRUCTURE CONSTRUCTION PRIVATE LIMITED, [ 2021 (8) TMI 526 - AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH] held that the works contract services pertaining to construction, erection, commissioning and completion of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 01/2018 C.T. (R) dated 25/01/2018 doesn t specify the service provided by a sub-contractor to main contractor for construction of a Roads. 2.2 Applicant feels that they are a sub-contractor providing service to the main contractor for original contract work of constructing the Roads to be used by the General Public for which 12% GST is applicable and not 18%, as applicable in other cases. Works conducted by applicant as a sub-contractor is identical to the works to be performed by the main contractor nature of Transactions also remain the same so according to applicant, this transaction will be charged to GST @ 12%. Applicant Submission dated 30.10.2021:- 2.3 Applicant is engaged in the business of construction, erection, commissioning and completion of roads and provides WCS as a sub-contractor to main contractor for original contract work pertaining to roads. Applicant has been awarded a Sub-Contract from M/s. J.P. Enterprises vide Agreement dated 276 November 2018, for Executing Work of construction of Concrete Roads in Aurangabad City Packages P-2. The Contract was awarded to Ms J.P. Enterprises from Aurangabad Municipal Corporation vide Agreement dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by the justification of the recommendation of the Fitment Committee to the 25th GST Council meeting after which the downward revision of the rate was effected. 2.10 The service provided by sub- contractor to main contractor for construction of roads original works contract services is not specified in Notification No-01/2018- Central Tax (Rate) dated 25-01-2018. No weightage has been assigned to the contractee. In other words, if the project fulfills the characteristics of a road contract, then the tax rate of 12% applies irrespective of the person from whom the contract has been received. 2.11 Even though applicant is a sub-contractor providing service to main contractor for original contract work pertaining to roads, it should charge 12% GST only and not 18% as applicable in other cases. This is because the entry is applicable, only if the following are satisfied: (1) the service should be under the Heading 9954 (Construction Service) (2) the supply should be a Composite Supply (3) the work should be works contract as defined in Clause (119) of Section 2 of CGST Act and (4) the work should be by way of construction, erection, commissioning, inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity. Attracts levy of CGST at 6%. 3.4 Whereas, activity undertaken by applicant, construction of roads is related to item (iv) of the original notification 11/2017 and hence its does not qualify for tax rate of 6% CGST i.e.12 percent tax rate. Hence, the impugned activity undertaken by applicant does not quay for 12% tax rate, it should attract 18% tax rate i.e. 9% CGST and 9% MGST. 04. HEARING 4.1 Preliminary e-hearing in the matter was held on 16.06.2021. Shri. Arun Valera, learned CA and Shri Vaibhav Shah, learned CA appeared, and requested for admission of the application. Jurisdictional Officer Shri. Vijay Salunkhe, learned Asst. Commissioner, MUM-VAT-D-917, Nodal-06, Mumbai also appeared. 4.2 The application was admitted and called for final e-hearing on 09.11.2021. The Authorized representative of the applicant, Shri. Arun Valera, Learned CA and Shri.Vaibhav Shah, learned CA were present. The Jurisdictional officer was absent. 4.3 We heard both the sides. 05. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; 6 5.4 We find that, the aforesaid entry at serial no.3(iv) does not specify that it should be made applicable only to a contractor and not a sub-contractor, In the absence of such specification, we are of the opinion that the said entry should apply to the services provided by sub-contractor also. Further, we observe that, the above mentioned entry (iv) is based on a project and not based on the nature of the contractor/Contractee / recipient of service, etc. 5.5 The jurisdictional officer has submitted that, as per Sr. No. 3 (ix) of the above mentioned notification amended by Not cation 1/2018-Central Tax (Rate) dated 25 January 2018, Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shall attract the rate of 12%. 5.7 Further, The GST Council in their 25th meeting on 18.01.2018 had made recommendations at item No. 12 as under: to reduce GST rate (from 18% to 12%) on the Works Contract Services (WCS) provided by sub-contractor to the main contractor providing WCS to Central Government; State Government, Union territory, a local authority, a Governmental Authority or a Government Entity, which attract GST of 12%. Likewise, H/CS attracting 5% GST, their sub-contractor would also be liable to pay @ 5%. . The wording of the above release shows or throws light on the intent of the government service provided by a sub-contractor to a contractor would attract GST @ 12%. 5.8 The jurisdictional officer has failed to show under which particular entry the said works contract is taxable to attract 18% GST, if it is not taxable under the entry no. 3(iv) of the above referred notification. 5.9 The wording of the entry no (iv) is very clear and unambiguous. It gives importance to the works listed therein and not to the particular recipient of said works contracts or provider of the works contract. 5.10 Where the intention of the legislature is to give im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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