2022 (5) TMI 692 - AAAR - GST

Classification of goods - rate of tax - works contract executed - composite supply or not - eligibility for concessional rate of GST under Sl. No.3 (vi) of notification 11/2017-CT (CR) dated 28.06.2017 - What is the effective date of applicability of 12% tax rate and whether this concessional rate shall be applicable prospectively or retrospectively - HELD THAT - Unless a specific effective date is mentioned in a notification the date from which rate of tax is applicable is the date of issuance of such a notification. The notification No. 11/2017 CT(R) dated 28-06-2017 which prescribes the applicable tax rate of 12% on work contract service provided to IIT Bhubaneswar which is an educational institution is effective form the date of notification. The said notification being come into force with effect from 1st July 2017, we are of the view that the concessional rate of GST of 12% pertaining to the case of applicant is effective retrospectively.

Summary

Issues involved:
1. Classification of works as composite supply
2. Applicability of concessional GST rate
3. Refund eligibility for excess tax paid
4. Procedure for claiming excess tax refund
5. Effective date of applicability of tax rate

Classification of works as composite supply:
The case involved determining whether the works executed by the applicant could be classified as a composite supply. The Appellate Authority for Advance Ruling held that the works entrusted to the applicant by IIT-Bhubaneswar could indeed be treated as composite supply, making certain components eligible for concessional rates under specific notifications.

Applicability of concessional GST rate:
The issue revolved around whether the concessional GST rate under a specific notification would apply to the works contract service provided by the applicant to IIT-Bhubaneswar. The Appellate Authority confirmed that the concessional rate would be applicable to the said works contract service, in line with the CGST Act and SGST Act effective from 01-07-2017.

Refund eligibility for excess tax paid:
The applicant questioned whether the excess tax paid prior to the pronouncement of the Appellate Authority's order could be considered as tax paid over and above the legal liability. The Authority for Advance Ruling rightly pointed out that this question did not fall under the provisions of the CGST Act, 2017, thus justifying their decision in this regard.

Procedure for claiming excess tax refund:
Regarding the eligibility for refund of excess tax paid, the Authority for Advance Ruling referred to Section 54 of the CGST Act, 2017, which deals with refund of taxes. The ruling confirmed that the applicant could follow the procedures outlined in the said GST section for claiming any refund.

Effective date of applicability of tax rate:
A crucial question raised was about the effective date of the applicability of the 12% tax rate and whether it would be applicable prospectively or retrospectively. The Appellate Authority clarified that in the absence of a specific effective date in the notification, the rate of tax would be effective from the date of issuance of such notification. Therefore, the concessional rate of GST of 12% was deemed effective retrospectively from the date of notification.

This detailed analysis covers the key issues addressed in the legal judgment by the Appellate Authority for Advance Ruling in Odisha.