TMI Blog2022 (10) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Schedule III of the CGST Act - the conditions to be fulfilled for a supply to be eligible for the concessional rate under the above entry are; (i) the supply must be a composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017; (ii) the supply must satisfy any of the specified descriptions and (iii) the supply must be provided to the Central Government or State Government or Local Authority or Governmental Authority or Government entity. Whether the service rendered by the applicant falls under the category of works contract service as per the CGST Act? - HELD THAT:- The term works contract under GST is restricted to contract for construction, fabrication etc of any immovable property. The facts submitted by the applicant reveals that the applicant had entered into an agreement with Malabar Cancer Centre for the construction and extension of site and building. Hence the service rendered by the applicant falls under the ambit of definition of works contract under the CGST Act. Whether the supply of works contract services fall under any of the specified descriptions mentioned in the above entry? - HELD T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, a reference hereinafter to the provisions of the CGST Act, Rules and the notifications issued there under shall include a reference to the corresponding provisions of the KSGST Act, Rules and the notifications issued there under. 3. The Applicant requested an advance ruling on the following: Whether the works contract service provided to Malabar Cancer Centre is to be billed at 12% GST or to be billed at 18% GST? 4. Contentions of the Applicant: 4.1. The applicant submits that they have entered into an agreement with the Director, Malabar Cancer Centre [MCC] Thalassery, Kannur established as a charitable society registered under the Societies Registration Act (21 of 1860) for the construction and extension of site and building. MCC is an autonomous institution under Health and Family Welfare Department, Government of Kerala, started with an aim to establish a comprehensive cancer centre, providing the much-required oncology care to the general public. The control and management of the society are vested in the Governing Body consisting of 23 members with the Hon'ble Chief Minister of Kerala as the Chairman. The routine activities are controlled by the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government Entity' as defined under Notification No. 12/2017-C.T.(Rate) dated 28.6.2017 as amended effective from 13.10.2017 is given below.- (x) Government Entity means an authority or a board or any other body including a society, trust, corporation,-. (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority. 5.3. The Government of Kerala, has full control over the activities of MCC and it qualifies to be called and termed as a 'Government Entity1 for the purpose of GST law, as it fulfills the necessary and sufficient conditions laid down under the notification supra. 5.4. SI. No.3 (vi) of the Notification No. 11/2017 - Central Tax (Rate) dated 28-06-2017 is given as under; (vi) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, {other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above provided to the Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhubaneswar will not only be unwarranted but also defeat the very purpose of concessional rate. Thus the AAR ruled that construction of Directors Bungalow and construction of staff / faculty quarters is out of purview of concessional rate provided under Notification No. 11/2017 - CT (Rate) dated June 28, 2017 and would attract 18% GST. 5.7. Thus the composite supply of works contract as defined in clause (119) of Section 2 of the CGST Act, 2017 which squarely fall within the ambit of the scope of work entrusted to MCC by Government of Kerala shall be entitled to a concessional rate under SI No. 3(vi) to Notification No. 11/2017-CT (Rate) Accordingly, each and every supply under the subject contract shall be treated separately for determining the rate of tax under the CGST Act, 2017 read with the provisions of the GST Tariff and respective exemption notifications. 6. Personal Hearing: The applicant was granted opportunity for personal hearing on 26.10.2021. Shri Shaju Srakeentavida represented the applicant in the personal hearing. The representative reiterated the contentions made in the application and requested to issue a ruling based on the submissions in the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 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. 7.3. The concessional rate of GST prescribed under the above entry is applicable to the supply of specified work contract services provided to Central Government or State Government or Local Authority or Governmental Authority or Government entity. The specified works contract services are supply by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of (i) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession or (ii) a structure meant predominantly for use as an educational, a clinical, or an art or cultural establishment or (iii) a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y out diagnostic or investigative services of diseases. Malabar Cancer Centre being established and engaged in oncology care and treatment squarely falls within the above definition of clinical establishment and accordingly the works contract services rendered by the applicant falls within the description specified in sub-item (b) of the above said entry. 7.7. The next question to be decided is whether Malabar Cancer Centre is a governmental authority or a government entity. As per Para 4 (ix) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017; 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 ninety per 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 to a Panchayat under Article 243G of the Constitution. 7.8. The functions entrusted to a municipality under the Twelfth Schedule to Article 243W of the Constitution are: (a) Urban planning including town planning; (b) Regulation of land-use and construction of buildings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies; (xxiv) Family welfare; (xxv) Women and child development; (xxvi) Social welfare, including welfare of the handicapped and mentally retarded; (xxvii) Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes; (xxviii) Public distribution system; (xxix) Maintenance of community assets. 7.10. Malabar Cancer Centre, a society registered under the Societies Registration Act is established by the State Government under the administrative control of the Department of Health and Family Welfare as a comprehensive cancer centre to provide oncology care and treatment to the general public. The control and management of Malabar Cancer Centre is vested in the Governing Body consisting of 23 members of which the Hon'ble Chief Minister of Kerala is the Chairman. The members of the Governing Body and Executive Committee hold their position by virtue of their official positions in the Government of Kerala and also as nominated by the State Government. Further, public health is a function entrusted to a Municipality as well as to a Panchayat under Article 243W and Article 243G respectively of the Constitution. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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