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2023 (8) TMI 1206 - AAR - GSTApplicable rate of tax - works contract services undertaken by the applicant to M/s Tamil Nadu Urban Habitat Development Board and M/s Tirunelveli Smart City Limited with effect from 01.01.2022 consequent to amendment of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 by Notification No. 15/2021-C.T (Rate) dated 18.11.2021 effective from 01.01.2022. HELD THAT - Tirunelveli Smart City Limited falls under the definition of Governmental Authority within the meaning of explanation in Para 4 (ix) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017, as amended vide Notification No. 31/2017 CT (Rate), dated 13.10.2017. As per definition of local authority given at para 8.2.4, the term local authority inter alia includes certain bodies / authorities, more specifically any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund in section 2(69) (c) of the CGST Act, 2017 - it is clear that Tirunelveli Smart City Limited has been constituted with a different purpose to implement certain functions and it cannot be equated to a local body and hence it can be concluded that Tirunelveli Smart City Limited is not a Local Authority. The effective rate of duty on work executed for Tirunelveli Smart City Limited, which is a Government Authority and the nature of service provided by the applicant is covered under entry in serial number 3(vi) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 till 31.12.2021. However, after omission of Government Entity from the description of service under the said entry vide Notification No. 15/2021-C.T (Rate) dated 18.11.2021 read with Notification No. 22/2021-C.T (Rate) dated 31.12.2021 with effect from 01.01.2022, the services of the applicant are covered under serial number 3 (xii) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017 and attract CGST of 9%.
Issues Involved:
1. GST rate applicable on composite supply of works contract to Tamil Nadu Urban Habitat Development Board. 2. GST rate applicable on composite supply of works contract to Tirunelveli Smart City Limited. 3. Determination of whether Tirunelveli Smart City Limited is a Government Authority or not. Issue 1: GST Rate on Works Contract to Tamil Nadu Urban Habitat Development Board The applicant did not submit details and nature of services provided to Tamil Nadu Urban Habitat Development Board. As per Section 95(a) of CGST Act, 2017, advance ruling is confined to matters on questions in relation to supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Since the applicant withdrew the application for advance ruling on this issue, no ruling was provided. Issue 2: GST Rate on Works Contract to Tirunelveli Smart City Limited The applicant sought to determine the GST rate applicable to the composite supply of works contract to Tirunelveli Smart City Limited for the period from 01.01.2022 to 18.07.2022. The Authority examined the nature of the services provided and concluded that the services of the applicant provided to Tirunelveli Smart City Limited are covered under serial number 3(xii) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017, and attract CGST of 9% and SGST of 9% with effect from 01.01.2022. Issue 3: Determination of Government Authority Status The Authority examined the legal status of Tirunelveli Smart City Limited. It was determined that Tirunelveli Smart City Limited falls under the definition of 'Governmental Authority' as per explanation in Para 4(ix) of Notification No. 11/2017-C.T (Rate) dated 28.06.2017, as amended. However, it does not qualify as a 'Local Authority' under Section 2(69) of the CGST Act, 2017, as it does not have control or management of a municipal or local fund. Ruling: 1. No ruling provided for the GST rate on composite supply of works contract to Tamil Nadu Urban Habitat Development Board. 2. The GST rate applicable on composite supply of works contract to Tirunelveli Smart City Limited is 18% (CGST 9% and SGST 9%) with effect from 01.01.2022. 3. Tirunelveli Smart City Limited is considered a 'Governmental Authority' but not a 'Local Authority'.
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