9911796707
TMI Blog2022 (7) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... ered under the AP Goods & Services Tax Act, 2017. 3. Brief Facts of the case: * The applicant, M/s. Siddartha Constructions is engaged in construction services and is one of the successful bidders of online global open e-tenders floated by Andhra Pradesh Industrial Infrastructure Corporation Limited ("APIIC"), a Government of Andhra Pradesh undertaking and got selected for the below mentioned work: "providing Power Infrastructure, Fire Fighting & alarm System and street lighting to the proposed RBF shed No's 1 to 4 at YSR-EMC, Y.S.R. Kadapa District". * The scope of work order requires the applicant to install power infrastructures, safety warning and alarm systems, fire fighting measures and lighting systems for a non-residential/commercial building. They had entered into an agreement bond No.04/CE-II/APIIC/2020-21 dt: 23.02.2021 with the Chief Engineer of APIIC for the above works. * In view of the above facts, the applicant had filed an application in form GST ARA-01 dated 19.07.2021 by paying required amount of fee for seeking Advance Ruling on the following issues, as mentioned below: 4. Questions raised before the authority: The applicant seeks advance ruling on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, Union Territory, Local authority, Governmental Authority or Governmental Entity is eligible for the concessional rate of 6%. "11[(vi) 36[Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, 84[other than that covered by items (i), (ia) (ib) (lc) (id) (ie) and (if) above] provided] to the Central Government, State Government, Union Territory, 13[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 business or profession; b) A structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; or c) A residential complex predominantly meant for self- use or the use of their employees or other persons specified in paragraph 3 of the schedule III of the Central Goods and Services Tax Act, 2017 59[Explanation- for the purposes of this item, the term 'business' shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n AAR No.02/AP/GST/2020 dated 17.02.2020, the Advance Ruling Authority of Andhra Pradesh had also held that APIIC will qualify as a Governmental Entity. * In this regard, it is submitted that the reduced rate of 6% CGST under entry 3 (vi) would apply only in respect of three types of works mentioned in sub clauses (a) (b) and (c) of clause (vi) of S.No.3, out of which clause (b) is not relevant for the present purpose. Sub clause (a) reads as, "a civil structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession". The explanation to the SI.No 3 (vi) to Notification No.11/2017 was added vide Notification No.17/2018- Central Tax (Rate) dated 26.07.2018 which is reproduced hereunder: "Explanation - For the purposes of this item, the term 'business' shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities." * In view of the above, it is submitted that the activities undertaken by APIIC for the present projects are not in the form of business, rather, they are offices for development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 4 at YSR-EMC, Y.S.R. Kadapa District". The issue to be decided is whether the applicant is eligible to avail the concessional rate of GST at 12% as prescribed in SI.No.3(vi) of the Notification no. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended from time to time. The Government of India, vide notification No. 11/2017 - Central Tax (Rate), dated - 2811 June 2017 notified the rate of GST applicable on supply of services. The said notification has been amended from time to time. Vide Notification No. 24/2017 - Central Tax (Rate), Dated: 21.09.2017, Government of India by inserting entry No. (vi) notified, "Concessional GST rate of 6% for the construction services provided to Central Government, State Government, Union Territory, 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 civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession." This context necessitates the examination of two issues: a) Primarily, whether APIIC which awarded cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... predominantly for use other than for commerce, industry or any other business or profession. The applicant rather emphatically claimed that the work is meant for the use of Minister for Industries, which is essentially meant for promotion of Business and Industry. Moreover, the recipient of the services, APIIC is basically engaged in business activities and even a close observation of the modus operandi of the organisation prove the same. This would be sufficient enough to come to a conclusion that the said construction is for conducting promotional activities, which are essentially business oriented and hence not eligible for concessional rate of 12% (6% CGST 4- 6% SGST) available under Notification No.24/2017 - CT (Rate) dated 21.09.2017. Hence, the contract entered by the applicant is classifiable under SAC heading No. 9954 under construction services, with entry no (ii) of serial No.3 of notification no. 11/2017 Central Tax (Rate) dated 28.06.2017 i.e., Composite Supply of Works Contract as defined in clause 119 of Section 2 of Central Goods dose observation of the modus operandi of the organisation prove the same. This would be sufficient enough to come to a conclusion that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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