TMI Blog2022 (7) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... ant 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, AMC is basically engaged in business activities and even a dose 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% 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 and Services Act, 2017 and the applicable rate of tax is 18%. - AAR No.02/AP/GST/2022 - - - Dated:- 24-1-2022 - SRI. D. RAMESH, AND SRI. RV PRADHAMESH BHANU, MEMBER Represented by : Sai Makarandh P, Advocate ORDER (Under sub-section (4) of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of GST to be charged by the applicant? On Verification of basic information of the applicant, it is observed that the applicant falls under Centre jurisdiction, i.e. Superintendent of Central Tax (CT) Yerraguntla Range, Kadapa Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Centre Tax authorities to offer their remarks as per Sec. 98 (1) of CGST /APGST Act 2017. In response, remarks are received from the State tax authorities that no issues stand pending on the subject concerned for which the Advance Ruling sought by the applicant. 5. Applicant's Interpretation of Law: The applicant states that the present work is awarded by APIIC for providing interior works, furniture, and internal electrification in the area proposed for the Hon'ble Minister for Industries, in APIIC Towers in IT Park, Mangalagiri, Guntur. The applicant is providing works contract services in the form as defined under section 2 (119) of the CGST Act, 2017. (119) Works contract means a contract for building, construction, fabrication completion, erection, installation, fitting out, improvement, modification, repair, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority as the case may be] It is submitted that APIIC will satisfy the definition of Government Authority. [(ix) Governmental Authority means an authority or a board or any other body,- (I) Set up by Act of parliament or a State Legislature; or (ii) Established by any Government, With 90per cent or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243W of the Constitution or a Panchayat under article 243G of the Constitution. In this regard, it is submitted that APIIC exercises/performs the statutory powers/functions of the local bodies with effect from 01.10.1994 onwards in 287 Nos. Industrial Areas (phase wise)! housing Complexes/Mini Industrial Estates/Commercial Complexes falling under Municipalities, Municipal Corporations and Gram Panchayats in the State, through its officers nominated as Executive Authority under the relevant Acts (AP Panchayti Raj Act, AP Municipality A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he use of officers and not for commercial purposes. APIIC is vested with the objective of providing industrial infrastructure through the development of industrial areas and they have developed more than 300 industrial parks spreading over an extent of about 1,21,655 acres (including allotted area). Besides, APIIC is also developing sector focused parks like apparel park/food processing parks/leather parks, special Economic Zones in the state. APIIC has also constructed 3500 industrial sheds, 4800 dormitory units, 466 commercial shops. The applicant states that present contract is not a contract to develop industrial park etc., for APIIC but for the offices of the Hon'ble Minister of Industry. Further, as per the explanation provided in SI.No.3 (vi), this particular contract is not for the business interests or transactions of APIIC but for propagating the industry and trade in the State of Andhra Pradesh and formulating the industrial plans of the State. This is not a commercial business but is the duty of the Hon'ble Minister as per their designation. Further, the same cannot be treated as commercial business since they functioning as a Governmental Authority an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or commerce, industry, or any other business or profession. This context necessitates the examination of two issues: a) Primarily, whether APIIC which awarded construction work to the applicant would qualify for a Governmental Authority/entity or not. b) Consequently whether the construction work taken up by the applicant is meant for business or otherwise. a) Initially we examine whether M/s. APIIC is a Government Authority/Entity or otherwise. The para 4 of clauses (ix) (x) of Notification No.11/2017 - CT (Rate) dted 28.06.2017 as amended by Notification No.31/2017 - CT (Rate) dated 13.10.2017 is as hereunder; (ix) Governmental Authority means an authority or a board or any other body, - (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution. (x) Governmental Entity means an authority or a board or any other body including a society, trust, corporation, set up by an Act of Parliament o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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