2022 (4) TMI 1135 - AAR - GST

Classification of supply of goods/service - rate of GST - construction of efficiency hostel, extension of school of basic science, extension of mechanical science extension of school of infrastructure of IIT at Argul Campus Bhubaneswar, Odisha Construction of New infrastructure 2nd phase of IIT Bhubaneswar in permanent at Argul, Khurda, Odisha - supply to a Government Entity i.e. IIT, Bhubaneswar - applicability of concessional rate of tax in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 - Revision of bills/invoices - HELD THAT - The following pre-requisites are to be satisfied in order the supply to qualify for the notified exemption. (a) Service provided or to be provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a structure meant predominantly for use as (i) an educational (ii) a clinical, or (iii) an art of cultural, establishment. (b) Services are provided to Central Government, State Government, Union Territory, a local authority, Governmental Authority or Government Entity (c) If the services provided to Government Entity, then the services must have been procured by the Government entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority. As per the first pre-requisite, IIT Bhubaneswar is an autonomous public institution of higher education and governed by the Institutes of Technology Act, 1961; therefore, the said construction for IIT. Bhubaneswar cannot said to be used for commerce, industry, or any other business or profession. Hence, 1st pre-requisite for the supply to qualify for the notified concession is satisfied/ful-filled - as regard the second pre-requisite it is held that IIT, Bhubaneswar is entitled to be termed as 'Government Entity' in terms of Explanation to Notification No. 11/2017-C.T. (Rate), and also as per Notification No. 31/2017-C.T. (Rate), dated 13-10-2017 as it fulfills the necessary and sufficient conditions laid down under notification supra. It therefore leaves no doubt that IIT, Bhubaneswar is a Government Entity for the purpose of provisions of CGST Act, 2017 and OGST Act, 2017 - As per third pre-requisite, it is held that the rate of 12% is applicable from the date when the aforesaid amended Notification has come into effect or from the commencement date of the said contract whichever is later. The Works Contract Service of construction of efficiency hostel, extension of school of basic science, extension of mechanical science extension of school of infrastructure of IIT at Argul Campus Bhubaneswar, Odisha Construction of New infrastructure 2nd phase of IIT Bhubaneswar in permanent at Argul, Khurda, Odisha allotted to the applicant under sub contract basis would merit entitlement for concessional rate of GST @ 12% in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 (and as amended). Revision of bills/invoices - HELD THAT - This question does not fall under the provisions of Section 97(2) of the CGST Act, 2017; therefore, the said question does not merit discussion/consideration. Application disposed off.

Summary

Issues Involved:
1. Applicability of concessional GST rate on works contract service for IIT Bhubaneswar.
2. Effective date for the applicability of the concessional GST rate.
3. Requirement to revise invoices and amend GST returns based on the concessional rate.

Issue-wise Detailed Analysis:

1. Applicability of Concessional GST Rate on Works Contract Service for IIT Bhubaneswar:
The applicant sought clarification on whether the works contract service for the construction of various facilities at IIT Bhubaneswar, provided under a sub-contract, is eligible for a concessional GST rate of 12% as per Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017, read with subsequent amendments.

The applicant argued that IIT Bhubaneswar qualifies as an educational institution and a government entity, thus meriting the concessional rate. The notification specifies that services provided to a government entity by way of construction of an educational establishment are taxable at 12%. The applicant's services, provided to NBCC (India) Limited (the principal contractor), which in turn provides services to IIT Bhubaneswar, should also attract the same concessional rate.

The authority examined the relevant entries in the notification and determined that the construction services provided by the applicant fall under the specified category for educational establishments. IIT Bhubaneswar, being an autonomous public institution established by an Act of Parliament and recognized as an institute of national importance, qualifies as a government entity. Therefore, the works contract service provided by the applicant is eligible for the concessional GST rate of 12%.

2. Effective Date for the Applicability of the Concessional GST Rate:
The applicant inquired about the effective date for the applicability of the 12% GST rate. The authority clarified that the concessional rate is applicable from the date when the amended notification (Notification No. 1/2018-Central Tax (Rate)) came into effect, i.e., 25th January 2018, or from the commencement date of the contract, whichever is later.

3. Requirement to Revise Invoices and Amend GST Returns:
The applicant sought guidance on whether they need to revise the invoices already issued to NBCC (India) Limited and amend the GST returns filed, based on the concessional rate. The authority concluded that this issue does not fall under the provisions of Section 97(2) of the CGST Act, 2017, and therefore, does not merit discussion or consideration.

Ruling:
(a) The works contract service provided by the applicant for the construction of various facilities at IIT Bhubaneswar, under a sub-contract basis, is entitled to a concessional GST rate of 12% [CGST @ 6% + SGST @ 6%] as per Notification No. 11/2017-Central Tax (Rate) and its amendments.

(b) The concessional GST rate of 12% is applicable from the date when Notification No. 1/2018-Central Tax (Rate) dated 25th January 2018 came into effect or from the commencement date of the contract, whichever is later.

(c) The question regarding the revision of invoices and amendment of GST returns does not fall under the provisions of Section 97(2) of the CGST Act, 2017, and thus, is not considered for discussion.