2023 (10) TMI 470 - AAR - GST

Maintainability of application - information requested could not be filed by the applicant - Government Entity as per N/N. 11/2017 31/2017 or not - works contract executing civil works for Central Government Employees Welfare Housing Organization (CGEWHO) - whether the tax rate of 12% is applicable to the contract entered into by the applicant with CGEWHO or not? HELD THAT - It is observed by the AAR that the information requested could not be filed by the applicant till date. The said information is crucial to forming an opinion by the AAR therefore in the absence of the said material the AAR is not in a position to gives its clarification on the questions raised before it by the applicant. Hence the application is dismissed.

Summary

Issues involved:
The issues involved in this case are the admission of the application u/s 98(4) of the Central Goods and Services Tax Act, 2017 and u/s 98(4) of the Telangana Goods and Services Tax Act, 2017, and the clarification regarding the rate of tax on works executed for the Government by M/s. Srico Projects Private Limited.

Admission of Application:
M/s. Srico Projects Private Limited filed an application under Section 97(1) of the TGST Act, 2017 read with Rule 104 of CGST/TGST Rules. The application was admitted by the Authority for Advance Ruling as the queries raised by the applicant fell within the ambit of Section 97 of the GST Act. The applicant also paid the requisite fee for Advance Ruling, and it was declared that the questions raised in the application were neither decided nor pending before any authority under any provisions of the GST Act.

Clarification on Tax Rate:
M/s. Srico Projects Private Limited sought clarification on the rate of tax for works executed for the Central Government Employees Welfare Housing Organization (CGEWHO). Initially, the application was rejected citing an ongoing enquiry by DGGI, Hyderabad Zonal Division. However, the Hon'ble High Court directed the AAR to reconsider the application as the investigation was initiated after the applicant filed the application.

Questions Raised:
The questions raised by M/s. Srico Projects Private Limited were:
1. Whether CGEWHO is covered under the definition of the term "Government Entity" as per Notification No. 11/2017 & 31/2017?
2. If CGEWHO falls under the definition of Government Entity, whether the tax rate of 12% (CGST@6% + SGST @ 6%) is applicable to the contract entered into by the applicant with CGEWHO.

Personal Hearing:
During the personal hearing, the authorized representatives reiterated their arguments and requested the AAR to decide the case on its merits. The applicant contended that they were executing contracts with CGEWHO, a Government Entity, and provided the definition of "Government Entity" from Notification No. 11 of 2017.

Discussion & Findings:
The AAR requested specific information from the applicant to form an opinion on the questions raised, including notification creating CGEWHO, percentage equity/control of the Central Government, and communication/directions from the Central Government to CGEWHO. As the applicant failed to provide this crucial information, the AAR dismissed the application due to the absence of material necessary for clarification.