2019 (9) TMI 743 - AAR - GST

Classification of service - Rate of GST - contract given to Shreeji Infrastructure India Pvt Ltd towards construction of residential quarters at 2x660 MW Shree Singaji Thermal Power Project Stage -II Khandwa - N/N. 11/2017 amended vide N/N. 20/2017, 24/2017 and 31/2017. HELD THAT - The issue raised in the present application has been duly decided by this Authority in the matter of Application filed by IN RE M/S. SHREEJI INFRASTRUCTURE INDIA (P.) LTD., 2018 (11) TMI 58 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH . The applicant in the present application are the service receivers while M/s.Shreeji Infrastructure P.Ltd. are the service providers. This authority had ruled that The works contract service of construction of 599 residential quarters allotted to the applicant (Shreeji Infrastructure P.Ltd.) by MPPGCL will merit classification under SAC 9954 and would attract GST @18%. In the present case, in the absence of any specific mention of construction of residential quarters having been entrusted to the applicant by the Government of Madhya Pradesh, we do not find any reason to deviate from our stand taken in IN RE M/S. SHREEJI INFRASTRUCTURE INDIA (P.) LTD., 2018 (11) TMI 58 - AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH . Rate of GST applicable on construction contracts of residential quarters at various power stations of the Applicant - HELD THAT - It is a very generic question which cannot be decided without looking into specific contracts being awarded. We thus refrain ourselves from giving any categorical ruling on the second question posed before us.

Summary

Issues:
1. Rate of GST on the contract for construction of building and structure for colony at a specific power project.
2. Rate of GST on the construction contract of residential quarters at various power houses of a government entity.

Analysis:

Issue 1: Rate of GST on the contract for construction of building and structure for colony at a specific power project:
The application sought an advance ruling on the rate applicable to the construction contract for residential quarters at a power project. The applicant argued for a lower GST rate based on specific notifications. The concerned officer's view was that the contract would attract GST at 18%. The applicant contended that the construction of residential quarters was integral to the power plant project. However, the authority noted that a previous ruling had already classified similar services under SAC 9954 at 18% GST. The authority found that the work entrusted to the applicant was solely for electricity generation, not construction of residential quarters, and upheld the 18% GST rate.

Issue 2: Rate of GST on the construction contract of residential quarters at various power houses of a government entity:
The applicant also sought a ruling on the GST rate for construction contracts of residential quarters at different power stations. The authority declined to provide a specific ruling due to the generic nature of the question without specific contract details. The authority reiterated that the GST rate for construction of residential quarters, as per a previous ruling, was 18% under SAC 9954. The ruling emphasized that the specific tender document mentioned in the application would attract GST at 18% for the construction of residential quarters awarded to a specific contractor.

In conclusion, the authority ruled that the construction contract for residential quarters at a specific power project would attract GST at 18% under SAC 9954. The ruling remains valid unless declared void under the provisions of the GST Act.