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2024 (8) TMI 231 - AAR - GSTClassification of goods - SAC rate - Polymer protective coating for bridges - rate of tax as applicable under Notification 11/2017-Central Tax (Rate) as amended from time to time for the period 01-07-2017 till date - eligibility for exemption from the whole or part of the tax leviable thereon under Notification 12/2017-Central Tax (Rate). Classification of goods - HELD THAT - The works rendered by the applicant to awarders squarely falls under the definition of works contract in section 2 (119) of the CGST Act 2017 including material by way of application of polymer protection to bridges as part of construction of bridges as well as for routine maintenance/renovation of the bridges and the same will be treated as supply of service under Service Code (Tariff) 995473. Rate of tax as applicable under Notification 11/2017-Central Tax (Rate) as amended from time to time for the period 01-07-2017 till date - HELD THAT - The applicant is providing works contract services by way of application of polymer protection to bridges as part of construction of bridges as well as for routine maintenance/renovation of the bridges and the bridges are for road transportation for use by the general public - Vide sl. no. 3 (iv)(a), the composite supply of works contract supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a bridge for road transportation for use by general public would be taxable @ 12%. Moreover, it is noted that such rate of tax is applicable in all cases where said works contract services are provided for the use of the general public. The status or class or category of the recipient of such works contract service is immaterial to decide the rate of tax. If the time of supply of the said services discussed in this ruling as determined in accordance with section 14 of the CGST Act falls between 01.07.2017 to 21.08.2017, the supply will be taxable @ 18% (CGST @ 9% and SGST @ 9%), if the supply is made between 22.08.2017 to 17.07.2022, the same will be taxable @ 12% (CGST @ 6% and SGST @ 6%) and thereafter, it will be taxable @ 18% (CGST @ 9% and SGST @ 9%) w.e.f. 18.07.2022. Eligibility for exemption from the whole or part of the tax leviable thereon under Notification 12/2017-Central Tax (Rate) - HELD THAT - This question is irrelevant on the basis of the ruling given above.
Issues Involved:
1. Classification and SAC code for the application of polymer protective coating for bridges. 2. Rate of tax applicable under Notification 11/2017-Central Tax (Rate) as amended from time to time for the period 01-07-2017 till date. 3. Eligibility for any exemption from the whole or part of the tax leviable under Notification 12/2017-Central Tax (Rate). Issue-wise Detailed Analysis: 1. Classification and SAC Code for the Application of Polymer Protective Coating for Bridges The applicant, a partnership firm engaged in works contract services, sought clarification on the classification and SAC code for applying polymer protective coating to bridges. The ruling determined that the services provided by the applicant fall under the definition of "works contract" as per Section 2(119) of the CGST Act, 2017. The polymer coating is considered an improvement of immovable property, involving the transfer of goods in the form of paint. Consequently, the service is classified under Service Code (Tariff) 995473, which includes painting services for building interiors, exteriors, railings, gratings, doors, windows, and other engineering structures. 2. Rate of Tax Applicable Under Notification 11/2017-Central Tax (Rate) The rate of tax applicable to the works contract services provided by the applicant was analyzed based on the amendments to Notification 11/2017-Central Tax (Rate). The ruling outlined the following tax rates for different periods: - 01-07-2017 to 21-08-2017: Taxable at 18% (CGST @ 9% and SGST @ 9%). - 22-08-2017 to 17-07-2022: Taxable at 12% (CGST @ 6% and SGST @ 6%) as per the amended entry 3(iv)(a) of Notification 11/2017, which covers works contract services for the construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a bridge for road transportation for use by the general public. - From 18-07-2022 onwards: Taxable at 18% (CGST @ 9% and SGST @ 9%) due to the removal of the specific entry related to works contract by way of construction of a bridge for road transportation for use by the general public. The time of supply for determining the applicable tax rate was to be ascertained in accordance with Section 14 of the CGST Act, 2017, which deals with changes in the rate of tax. 3. Eligibility for Exemption Under Notification 12/2017-Central Tax (Rate) The ruling concluded that the question of exemption under Notification 12/2017-Central Tax (Rate) was irrelevant based on the determination of the applicable tax rates provided in the ruling for question no. 2. Therefore, no exemption from the whole or part of the tax was considered. RULING: 1. Classification and SAC Code: The application of polymer protective coating for bridges is classified under Service Code (Tariff) 995473-painting services under the composite supply of Works Contract (9954). 2. Rate of Tax: - 01-07-2017 to 21-08-2017: 18% (CGST @ 9% and SGST @ 9%). - 22-08-2017 to 17-07-2022: 12% (CGST @ 6% and SGST @ 6%). - From 18-07-2022 onwards: 18% (CGST @ 9% and SGST @ 9%). 3. Exemption Eligibility: The question is irrelevant based on the ruling for question no. 2.
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