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2020 (10) TMI 1351 - AAR - GSTClassification of services - rate of tax - composite supply of works contract - N/N. 11/2017-Central Tax (Rate) dated 28th June 2017 - HELD THAT - In response to the कमांक/ राकआ / अविप्रा /03/2020/24 नवा रायपुर अटल नगर, दिनांक 03.09.2020 issued to the Assistant Commissioner, State Tax, Korba Circle-2, Chhattisgarh, the jurisdictional office vide कमांक/ रा.क. 2/ एफ/2020/460 कोरवा दिनांक 06/अक्टूबर/2020 Opined that since there is no other mention, the date of issue of Notification No. 20/2017-Central lax (Rate), dated 22nd August, 2017 and Notification No. 24/2017-Central Tax (Rate), dated 21 st September 2017 would be the effective date of the said Notification. The GST Rate on composite supply of works contract as defined in clause (119) of Section 2 of the Central Goods and Services tax Act, 2017 is 18% (9% CGST 9% SGST) till 21/08/2017 as stipulated under serial no. 3, Heading 9954 of Notification No. 11/2017-Central Tax (Rate) dated -28/06/2017. Thereafter, the GST Rate on composite supply of works contract as defined in Clause (119) of Section 2 of the Central Goods Services tax Act, 2017 is 12% (6% CGST 6% SGST) from 22/08/2017 as per serial no. 3, Heading 9954 of Notification No. 20/2017-Central Tax (Rate) dated-22nd August, 2017 - The applicant has wrongly interpreted that the tax liability is @ 12% (CGST 6% and SGST 6%) from 01st July, 2017 itself whereas the effective date of the said Notification is the Notification date itself. Notification No. 11/2017-Central Tax (Rate) dated-28/06/2017 is applicable with effect from the notification date viz. 28/06/2017. Similarly Notification No. 20/2017-Central Tax (Rate) dated-22 nd August, 2017 is applicable with effect from the notification date viz. 22/08/2017 and Notification No. 24/2017-Central Tax (Rate) dated 21st September, 2017 is applicable with effect from 21/09/2017.
Issues Involved:
1. Applicable GST rate for composite supply of works contract as per Central Goods and Services Act, 2017. 2. Effective date of amendments reducing the GST rate from 18% to 12% as per Notification No. 20/2017 and Notification No. 24/2017. Issue-wise Detailed Analysis: 1. Applicable GST Rate for Composite Supply of Works Contract: The applicant sought clarification on the GST rate applicable to the composite supply of works contract as defined in clause (119) of Section 2 of the Central Goods and Services Act, 2017. The applicant's contention was that the GST rate should be 12% (6% CGST + 6% SGST) based on amendments made by Notification No. 20/2017 and Notification No. 24/2017, which they interpreted to be effective from 1st July 2017. However, the ruling clarified that the GST rate for such works contracts was initially 18% (9% CGST + 9% SGST) as per Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017. The rate was subsequently reduced to 12% (6% CGST + 6% SGST) effective from 22nd August 2017, as per Notification No. 20/2017 and further confirmed by Notification No. 24/2017 dated 21st September 2017. 2. Effective Date of Amendments Reducing GST Rate: The applicant argued that the amendments reducing the GST rate to 12% should be effective from 1st July 2017, based on the interpretation that the notifications substituted the original notification. However, the ruling emphasized the principle of lex prospicit non respicit, meaning 'The Law looks forward and not backward,' stating that unless explicitly mentioned, legislation is presumed not to have retrospective effect. Therefore, the effective dates of Notification No. 20/2017 and Notification No. 24/2017 were confirmed as 22nd August 2017 and 21st September 2017, respectively. The ruling concluded that the applicant's interpretation of the effective date being 1st July 2017 was incorrect. Conclusion: The ruling provided a clear answer that the applicable GST rate for the composite supply of works contract was 18% until 21st August 2017 and 12% thereafter, effective from 22nd August 2017. The amendments made by Notification No. 20/2017 and Notification No. 24/2017 were not retrospective and became effective from their respective dates of issuance.
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