9911796707
TMI Blog2022 (8) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... The Applicant undertakes contract for construction of Head Works, Sumps, Pump Rooms, laying, jointing of pipe line and commissioning and maintenance of the entire work for water supply projects/ sewerage projects / 3. The applicant has sought advance ruling in respect of the following questions: i. Whether the supply of Services by the Applicant to M/s. Bangalore Water Supply and Sewerage Board is covered by Notification No.15/2021-Central Tax (Rate), dated 18th November, 2021 r/w Notification No.22/2021-Central Tax (Rate), dated 31st December 2021? ii. If the supplies as per Question 1 are covered by Notification No.15/ 2021-Central Tax (Rate), dated 18th November, 2021 r/w Notification No.22/ 2021-Central Tax (Rate), dated 31st December, 2021, then what is the applicable rate of tax under the Goods and Services Tax Act, 2017 on such supplies made w.e.f., 01-01-2022; iii. In case if the supplies as per Question 1 are not covered by the Notification supra then what is the applicable rate of tax on such supplies under the Goods and Services Tax Act, made w.e.f., 01-01-2022? 4. Admissibility of the application: The question is about the "applicability of a notification issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... havathi, K & C and Hebbal Valleys (major and minor). The sewerage system for newly added areas mainly the erstwhile CMC's is nearing completion. 5.6 The applicant states that Notification No.15/2021-Central Tax (Rate) seeks to amend parent Notification No.11/2017-Central Tax (Rate) dated 28th June, 2017. This Notification prescribed rate of tax on construction services at Serial No.3 of the table therein, viz-"(ii) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017" at 9% under CGST Act; thereby implying total GST at 18% (CGST-9% + SGST-9%); Notification 11/2017-Central Tax (Rate) dated 28th June, 2017 was subsequently amended vide Notification No.20/2017- Central Tax (Rate) dated 22nd August, 2017; whereby in Serial No.3 of the Table therein item (iii) was inserted viz-"(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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds; prevention of cruelty to animals. (p) Vital statistics including registration of births and deaths. (q) Public amenities including street lighting, parking lots, bus stops and public conveniences. (r) Regulation of slaughter houses and tanneries. Notification No.15/2021-Central Tax (Rate) dated 18th November, 2021, r/w Notification No.22/2021-Central Tax (Rate), dated 31st December, 2021 issued seeks to amend at Sr.No.3(iii) as - "Union territory or a local authority" thereby deleting the words a Governmental Authority or a Government Entity. 5.7 The applicant further submits that M/s. BWSSB is holder of PAN-AAALB0015G. The 4th character of PAN as highlighted is "L". PAN under Income Tax is designed in a Unique manner whereby the 4th character in the PAN classifies its Constitution / Status. "L" in this case denotes Local Authority. The GST Department while issuing GST REG-06 has stated as "Constitution of Business-Local Authority". 5.8 The applicant submit that the Constitution of the Business cannot change depending on different provisions under the same Act; i.e., for limited purposes under the Act the Constitution of the person is different and for another purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 r/w. Notification No.22/2021-Central Tax (Rate), dated 31st December, 2021; which after amendment now reads as "(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 Central Government, State Government, Union Territory or a local authority"; b. the said transaction is liable to tax under the GST Act @ 12%; and c. Not applicable PERSONAL HEARING / PROCEEDINGS HELD ON 07-07-2022 7. Shri Manish Goel, Chartered Accountant and Duly Authorised Representative appeared for personal hearing proceedings held on 07-07-2022 and reiterated the facts narrated in their application. FINDINGS & DISCUSSION 8. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Entry No.3(iii) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 will be applicable to the applicant. 13. Since the BWSSB is a Board set up by The Bangalore Water Supply and Sewerage Act, 1964, the same cannot be considered as State Government. Now let us discuss whether BWSSB is a Local Authority or not. Subsection 69 of section 2 of CGST Act s Local Authority as below: Section 2. Definitions.- In this Act, unless the context otherwise requires,- ......................... ......................... (69) 'local authority" means- (a) a "Panchayat" as defined in clause (d) of article 243 of the Constitution; (b) a "Municipality" as defined in clause (e) of article 243P of the Constitution; (c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund; (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006); (e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; (f) a Development Board constituted u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at and Municipalities we can see that both are institutions of self-government in defined areas. Self-Government is the management of local affairs by local Authorities, members of which have been elected by the local people. One of the distinctive attributes and characteristics of Local Authority is that, their members are elected through direct elections by the inhabitants of the defined area. But as per the section 3 of BWSSB Act 1964, all the members of BWSSB are appointed by the State Government. 13.4 BWSSB is also not a Municipal Committee or a Zilla Parishad or a District Board, since it is not vested with the control or management of a municipal or local fund. In view of the above, we can conclude that BWSSB is not Local Authority. 14. Now let us examine whether BWSSB is a Governmental Authority or Government Entity. Notification No.11/2017-Central Tax (Rate), dated: 28.06.2017 as amended vide Notification No. 31/2017-Central Tax (Rate), dated: 13.10.2017 defines Governmental Authority and Government Entity in as below: "(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) e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for the words "Union territory, local authority, a Governmental Authority or a Government Entity" the words "Union territory or a local authority" shall be substituted; 3) in column (5), in the heading "Condition", the entries against items (iii),(vi),(vii),(ix) and (x), shall be omitted. In view of the above notification, Entry No. 3(iii) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 is amended as below with effect from 01.01.2022: Sl.No. Chapter, Section or Heading Description of Service Rate (per cent.) 3 Heading 9954 (Construction services) (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 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 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 (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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