9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 817 - AAR - GSTWorks Contract - Earth Work - SI No 3A- Chapter No. 9954 as per Notification No. 12/2017-CT. (Rate) dated 28.06.2017, as amended by Notification No. 2/2018-C.T. (Rate) dated 25.01.2018, w.e.f. 25.01.2018 - HELD THAT - To fall under Sr. No 3 A mentioned above, the primary requirement is that the supply should be in the form of a 'Composite supply of goods and services'. We have already found above in para 5.8 above that, the impugned activity is a 'Composite supply of works contract' as defined in clause (119) of section 2 of the CGST Act, 2017. Being a Composite supply of works contract, the impugned activity cannot be covered under Sr. No. 3A. It is also seen that the impugned supply is similar to the supply in the case of IN RE M/S. SOMA MOHITE JOINT VENTURE. 2020 (9) TMI 1143 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRA wherein it was held by the Appellate Authority for Advance Ruling, Maharashtra that, the supply was not covered under Sr. No. 3A of Notification No. 12/2017-CTR dated 28.06.2017 - Relying of the said decision of the Appellate Authority and the discussion made, it is opined that the impugned is not covered under Sr. No. 3A of Notification No. 12/2017-C.T. (Rate) dated 28.06.2017, as amended - the first question is answered in the negative. Whether the said contract is covered under the term Earth Work and therefore covered under SI No - Chapter No. 9954 as per Notification No. 31/2017-Central Tax (Rate) dated 13th October 2017? - HELD THAT - In the instant case, the applicant is rendering composite supply of works contract as defined in clause (119) of Section 2 of the CGST Act, 2017, a fact which is supported by the decision of Maharashtra Appellate Advance Ruling Authority in the case of SMJV - applying the ratio of the said decision and as per discussions made, it is found that such rendering composite supply of works contract involves predominantly earth work that is, constituting more than 75per cent. of the value of the works contract, (also seen from the submissions made by the applicant as well as the jurisdictional officer) - the GMIDC is a Government Entity. In the instant case, the applicant is rendering composite supply of works contract as defined in clause (119) of Section 2 of the CGST Act, 2017, to GMIDC, a Government Authority, and such rendering of composite supply of works contract involves predominantly earth work that is, constituting more than 75per cent. of the value of the works contract. Thus, the impugned activity of the applicant is covered under the Sr. No. 3 (vii) of Notification No. 11/2017-CTR dated 28.06.2017 as amended by Notification No. 31/2017-CTR dated 13.10.2017. Notification No.11/2017-CT (Rate) dated 28/6/2017, was further amended vide Notification No. 15/2021-CTR dated 18.11.2021 (with effect from 01.01.2022) and against Sr. No 3, in column (3), in the heading Description of Services , in item (vii) 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 that means the words Governmental authority or a Government Entity are omitted. Therefore, with effect from 01.01.2022, the impugned services supplied by the applicant will not be covered under Sr. No. 3 (vii) of Notification No. 11/2021 - CTR dated 28.06.2017 as amended from time to time.
Issues Involved:
1. Whether the contract is covered under the term "Earth Work" as per Notification No. 12/2017-CT (Rate) dated 28.06.2017, as amended by Notification No. 2/2018-C.T. (Rate) dated 25.01.2018. 2. If the above answer is negative, whether the contract is covered under the term "Earth Work" as per Notification No. 31/2017-Central Tax (Rate) dated 13th October 2017. 3. Definition of "Earthwork" if covered under any of the above Notifications. Issue-wise Detailed Analysis: 1. Whether the contract is covered under the term "Earth Work" as per Notification No. 12/2017-CT (Rate) dated 28.06.2017, as amended by Notification No. 2/2018-C.T. (Rate) dated 25.01.2018: 5.9.1 The first question raised by the applicant is whether the impugned contract is covered under the term “Earth Work” and therefore covered under SI No 3A- Chapter No. 9954 as per Notification No. 12/2017-C.T. (Rate) dated 28.06.2017, as amended by Notification No. 2/2018-C.T. (Rate) dated 25.01.2018, w.e.f. 25.01.2018. 5.9.1 We find that Sr. No. 3A of Notification No. 12/2017-CT. (Rate) dated 28.06.2017, as amended covers “Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution”. 5.9.2 To fall under Sr. No 3 A mentioned above, the primary requirement is that the supply should be in the form of a 'Composite supply of goods and services'. We have already found above in para 5.8 above that, the impugned activity is a 'Composite supply of works contract' as defined in clause (119) of section 2 of the CGST Act, 2017. Being a Composite supply of works contract, the impugned activity cannot be covered under Sr. No. 3A mentioned above. 5.9.3 Further, it is also seen that the impugned supply is similar to the supply in the case of SMJV (mentioned above) wherein it was held by the Appellate Authority for Advance Ruling, Maharashtra that, the supply was not covered under Sr. No. 3A of Notification No. 12/2017-CTR dated 28.06.2017. Relying of the said decision of the Appellate Authority and the discussion made above, we are of the opinion that the impugned is not covered under Sr. No. 3A of Notification No. 12/2017-C.T. (Rate) dated 28.06.2017, as amended and therefore the first question is answered in the negative. 2. Whether the contract is covered under the term "Earth Work" as per Notification No. 31/2017-Central Tax (Rate) dated 13th October 2017:5.10 The second questions raised is, 'if the answer to the first question is negative, then “whether the said contract is covered under the term “Earth Work” and therefore covered under SI No - Chapter No. 9954 as per Notification No. 31/2017-Central Tax (Rate) dated 13th October 2017'. 5.10.1 We find that the applicant has not mentioned the Serial number of Notification No. 31/2017- C.T. (R) dated 13.10.2017 in their question. However, we have already found that in the instant case, the applicant is rendering composite supply of works contract as defined in clause (119) of Section 2 of the CGST Act, 2017, a fact which is supported by the decision of Maharashtra Appellate Advance Ruling Authority in the case of SMJV as mentioned above. Further, applying the ratio of the said decision and as per discussions made above, we find that such rendering composite supply of works contract involves predominantly earth work that is, constituting more than 75per cent. of the value of the works contract, (also seen from the submissions made by the applicant as well as the jurisdictional officer). Finally, we observe that the GMIDC is a Government Entity as also held by the Appellate Authority in the SMJV case. 5.10.2 In view of the above we find that, in the instant case, the applicant is rendering composite supply of works contract as defined in clause (119) of Section 2 of the CGST Act, 2017, to GMIDC, a Government Authority, and such rendering of composite supply of works contract involves predominantly earth work that is, constituting more than 75per cent. of the value of the works contract. Thus, the impugned activity of the applicant is covered under the Sr. No. 3 (vii) of Notification No. 11/2017-CTR dated 28.06.2017 as amended by Notification No. 31/2017-CTR dated 13.10.2017. 5.10.3 We also rely on the ratio of the decision of the Maharashtra Appellate Advance Ruling Authority in the case of Soma Mohite Joint Venture mentioned above which is squarely applicable in the subject case. 5.11 Further, we find that Notification No.11/2017-CT (Rate) dated 28/6/2017, was further amended vide Notification No. 15/2021-CTR dated 18.11.2021 (with effect from 01.01.2022) and against Sr. No 3, in column (3), in the heading “Description of Services”, in item (vii) 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 that means the words “Governmental authority or a Government Entity” are omitted. Therefore, with effect from 01.01.2022, the impugned services supplied by the applicant will not be covered under Sr. No. 3 (vii) of Notification No. 11/2021 - CTR dated 28.06.2017 as amended from time to time. 3. Definition of "Earthwork" if covered under any of the above Notifications:Question 3:- If we are covered any of above Notifications i.e. 31/2017-Central Tax (Rate) or 02/2018 Central Tax (Rate) then what is the meaning of “Earthwork”? Answer: - The subject question does not fall under any of the clauses to Section 97(2) of the CGST Act, 2017 and therefore is not specifically answered. Order:ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the questions are answered thus - Question 1:- Whether the said contract is covered under the term “Earth Work” and therefore covered under SI No 3A- Chapter No. 9954 as per Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017, as amended by Notification No. 2/2018- Central Tax (Rate) dated 25th January 2018? Answer: - Answered in the negative. Question 2:- If the above answer is negative, then whether the said contract is covered under the term “Earth Work” and therefore covered under SI No - Chapter No. 9954 as per Notification No. 31/2017-Central Tax (Rate) dated 13th October 2017? Answer: - The said contract is covered under SI No 3 (vii) of Notification No. 11/2021- CTR dated 28.06.2017 as amended by Notification No. 31/2017-C.T. (Rate) dated 13th October 2017 but will be covered under the said Entry only till 31.12.2021, as discussed above. Question 3:- If we are covered any of above Notifications i.e. 31/2017-Central Tax (Rate) or 02/2018 Central Tax (Rate) then what is the meaning of “Earthwork”? Answer: - The subject question does not fall under any of the clauses to Section 97(2) of the CGST Act, 2017 and therefore is not specifically answered.
|
