TMI Blog2023 (4) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... contract to M/s Radhe Construction who in turn had engaged the appellant for further execution of the services as per the work order issued in the name of the appellant. Further, in the work order dated 05.09.2019 of M/s Radhe Construction, it is seen that at point No. 5. M/s Radhe Construction has mentioned that they would be paying applicable GST @18% in addition to the other prices mentioned in work Order. This would seem to suggest that the sub-contractor i.e M/s Radhe Construction was aware that further sub-contracting this work would be appropriately leviable to GST @18% and not eligible for the concessional rate of GST@12% - the contention of the appellant that they are covered under the provisions 3(iii) and 3(ix) of the amended Notification No. 11/2017-CT(Rate) is highly misplaced. The contention of the appellant need not be agreed that they are eligible for the concessional rate of GST @12% in terms of Notification No. 20/2017-CT(Rate) dated 22.08.2017 and Notification No. 1/2018-CT(R) dated 25.01.2018 as the activity undertaken by the appellant is not covered Sr. No. 3(iii) or under 3(ix) of the Notification No. 11/2017-CT(R) as amended and agree with the findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of tax the liability should be determined on services provided by appellant (sub-contractors) to the main contractor pertaining to the irrigation, construction and maintenance works to the irrigation department, State of Gujarat? b) Under which head we should classify our services to execute irrigation, construction and maintenance work supplied to the irrigation department, State of Gujarat? c) Whether to charge a tax rate of 12% GST or 18% GST? 3.3 Gujarat Authority for Advance Ruling, Ahmedabad (herein after referred to as 'GAAR') vide Advance Ruling order No. GUJ/GAAR/R/43/2021 dated 11.08.2021 gave the following ruling:- GST rate on subject supply is 18% for services supplied by the sub-sub-contractor to sub-contractor M/s Radhe and supply merits entry at Heading 9954, Entry No. 3(H) of Notification No. 1 l/2017-CT(R) dated 28.06.2017 . 4. Aggrieved by the above decision of the GAAR, the appellant has filed this appeal on the following grounds: 4.1 The appellant is works contractor and executes and undertake composite supply of works contract as defined in clause 119 of Section 2 of CGST, 2017 and was awarded a sub-contract by another w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds or services or both on behalf of another; 4.8 Contractor and sub-contractor are not defined under the CGST Act. 2017 but as per the general definition Contractor means-a person or firm that undertakes a contract from the employer to provide materials or labour to perform a service or do job at a specified price and a sub-contractor means a person who is hired by a general contractor (or prime contractor, or main contractor) to perform a specific task as part of the overall project or the total project at a specified price for services provided to the project by the originating employer. 4.9 When the contractor awards either wholly or partially the contractual obligation to a sub-contractors. the contract remains the same and the work to be performed by the contractor as well as sub-contractors remains same and identical to what is specified in the contract between the main contractor and the employer. It can be seen from this definition that the subcontractor is not doing anything other than what is specified in the contract between the main contractor and the employer. 4.10 As per the definition of agent, an agent is a person who carries on the same business of supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant was informed regarding the same for fresh personal hearing in the matter. Shri Ramesh Rakholia. Advocate, vide his letter/mail dated 13.03.2023 requested to decide the appeal on the basis of material already on record, written submission and earlier representation/hearing. DISCUSSION FINDINGS 6. Time limit for filing appeal: 6.1 The impugned Ruling has been passed by the GAAR on 11.08.2021. In the Form GST ARA-02 regarding Appeal to the Appellate Authority for Advance Ruling, at Sr.No.2. the appellant has shown the date of communication of the Advance Ruling as '17.08.202r. We observe that the present appeal filed on 08.10.2021 has been filed after the prescribed time limit of 30 days from the date of communication of Ruling, which expired on 16/09/2021. as prescribed under Section 100(2) of the CGST Act. 2017. There has been a delay of 22 days. As per Order dated 10.01.2022 of Hon'ble Supreme Court in Mise. Application No.21 of 2022 in Mise. Application No.665 of 2021 in Suo Moto Writ Petition (C) No.3 of 2020 . the period from 15.03.2020 till 28.02.2022 shall stand excluded in computing the period of limitation and all persons shall have a limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 (24 of 1958); (b) canal, dam or other irrigation works; (c) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal. It is not the case of the appellant that they have received any work order from any of the Governmental authorities mentioned above. They don't have any work order issued in their favour by any of the aforesaid Governmental authorities. 7.3 The appellant has further submitted that the sub-contractors providing services to the main contractor is further classified only under two categories mentioned at item No.(ix) and (x) of Notification No. 01/2018-CT (Rate) dated 25.01.2018 amending the original Notification No. 11/2017-CT(R). For the sake of convenience, the provisions relating to entry No. 3( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JSIW Infrastructure was the main contractor who was awarded the works contract service pertaining to the Irrigation Department of the State of Gujarat. This main contractor then engaged a sub-contractor M/s Radhe Construction. Rajkot for executing part of this contract who in turn engaged the appellant as the second level sub-contractor for executing part of the original works contract service pertaining to the State Government project. From the above it is clear that the appellant was not engaged directly as a contractor, or as a subcontractor of the main contractor, by the State Government of Gujarat for supply of the works contract pertaining to the Irrigation Department. Therefore, though the appellant is emphasizing on the fact that the composite works contract services provided by him pertains to the Governmental authority specified under Serial No. 3(iii) of the Notification No. 11/2017-CT(R) as amended, it is seen that there is no direct nexus between the appellant and the Governmental authority (Irrigation Department) since the documents reveal that the appellant is supplying the service on the basis of the work order of a subcontractor i.e M/s Radhe Construction and not d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e main Contractor on the sub-contractor M/s Radhe Construction from further subcontracting the work allotted to them, without the consent of the main contractor. The appellant has also not produced any evidence to show that they were appointed by M/s Radhe Construction after obtaining the consent of the main contractor. 7.7 The appellant has also taken the recourse of definition of 'Agent' as defined under Section 2(5) of CGST Act, 2017 and submitted that they are working as an agent of the contractor and the property in goods passes directly from them to the irrigation department (State Government) which also lead to the conclusion that there is only one contract that is between the Irrigation Department (State Government) and contractor as well as subcontractor. These contentions of the appellant is without any basis since it is observed that the contract is between the appellant and M/s Radhe Construction. Though the ultimate recipient of service may be a Governmental authority, yet the appellant cannot be considered as the sub-contractor to the main contractor fulfilling the conditions of the Notification No. 11/2017-CT(R) dated 28.06.2017 as amended by Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir case is 12% which is the rate applicable for composite supply of works contract as defined in clause (119) of Section 2 of CGST Act, 2017. It is observed that the said entry entails benefit of concessional rate only to a sub-contractor of the main contractor for providing the services so specified. No tax can be levied and collected except according to the authority of law. There are plethora of judgments of various authorities where it is held that taxes are to be determined as per the taxing statue and benefit of concessional/Exemption Notifications is available only upon strict compliance of conditions mentioned therein. Reliance is placed on the decision of Hon'ble Supreme Court in the case of CCE Vs M/s Doaba Steel Rolling Mills [2011 (269) ELT 298 (SC)] wherein it was held that once it is shown that an assessee falls within the letter of law. he must be taxed however great the hardship may appear to the judicial mind . Further, in the case of Dilip Kumar and Company (reported at 2018-TIOL-302-SC-CUS-CB). the Apex Court held that exemption Notification should be interpreted strictly and the burden of proving applicability would be on the assessee to show that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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