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2022 (9) TMI 934 - AAR - GSTBenefit of exemption / concessional rate of GST - Classification of services - works contract services provided to Government Authority and Government Entity - Airport Terminal Building at Sogane Village in Shivamogga taluk and District, Karnataka - Greenfield Airport at Vijaypur in Karnataka State - Construction of High Security Prison at Central Prison, Parappana Agrahara, Bangalore Karnataka State - Construction of Basava International Center and Museum at Kudalasangam of Hunagunda Taluka in Bagalkot District - Construction of Government School Buildings and Hostels at various places in Karnataka State - Applicability of N/N. 15/2021 dated 18/11/2021-Central Tax (Rate). HELD THAT - Karnataka State Police Housing and Infrastructure Corporation Limited is a company of the Government of Karnataka incorporated under the companies Act 1956 and all the shares of the company are held by Government of Karnataka. In view of the definitions mentioned in the para 10 supra, Karnataka State Police Housing and Infrastructure Corporation Limited qualifies to be considered as a Government Entity. Karnataka Residential Educational Institutions Society (KRIES) is formed under the societies Registration Act to establish, maintain, control and manage residential institutions to the talented and meritorious children belonging to Scheduled caste, scheduled tribe and other backward classes. As per the rules and regulations of KRIES provided by the applicant, Government of Karnataka may appoint persons to review the progress of the society and to hold inquiries into the affairs of the society and give directions to the society with respect of any matter and the society shall be bound to comply with such directions. After going through the website of KRIES it was observed that it consists of 13 members and all are from the State Government - Karnataka Residential Educational Institutions Society qualifies to be considered as a Government Entity. The works of construction of Airport Terminal Buildings/facilities associated works at Sogane village in Shivamogga Taluk District, Karnataka and the work of Development of Greenfiled Airport at Vijaypur in Karnataka State are the works awarded by the Public Works Department of Government of Karnataka. Thus these are works supplied to State Government. However the said works for construction of airport terminal building or greenfield airport are predominantly meant for commerce and hence are not covered under Entry 3 (vi), (ix) and (x). The said works are covered under entry 3(xii) - N/N. 22/2021-Central Tax (Rate) dated 31.12.2021 has replaced the words Union territory, a local authority, a Governmental Authority or a Government Entity with the words Union territory or a local authority and Governmental Authority or a Government Entity were removed from the notification. The supplies made by the applicant in respect of all the contracts awarded to them as mentioned in para 9 supra are covered under entry 3(xii) of Notification No.11/2017 - Central Tax (Rate), dated 28.06.2017 further amended vide Notification No.03/2022-Central Tax (Rate) dated 13.07.2022, and attracts GST @ 18% (CGST 9% and KSGST 9%) with effect from 18.07.2022.
Issues Involved:
1. Applicable GST rates for various government works contract services executed by the applicant. Issue-wise Detailed Analysis: 1. Admissibility of the Application: The application is admissible under Section 97(2)(e) of the CGST Act, 2017, as it pertains to the determination of the liability to pay tax on any goods or services or both. 2. Facts of the Case: The applicant, a Public Limited Company, seeks advance ruling on the applicable GST rates for several government works contracts, including: - Construction of Airport Terminal Building at Sogane Village, Shivamogga. - Development of Greenfield Airport at Vijaypur. - Construction of High Security Prison at Central Prison, Parappana Agrahara, Bangalore. - Construction of Basava International Center and Museum at Kudalasangam. - Construction of Government School Buildings and Hostels at various places in Karnataka. 3. Applicable GST Rates: The applicant refers to Notification No.15/2021-Central Tax (Rate) dated 18/11/2021, which increased the GST rate on certain works contract services provided to Government Authority and Government Entity from 12% to 18% effective from 01-01-2022. 4. Governmental Authority or Government Entity: The ruling examines whether the entities to whom the applicant provides services qualify as Governmental Authority or Government Entity as per Notification No.11/2017-Central Tax (Rate), dated 28.06.2017, as amended by Notification No.31/2017-Central Tax (Rate), dated 13.10.2017. 5. Entities Considered as Government Entities: - Karnataka State Police Housing and Infrastructure Corporation Limited: Incorporated under the Companies Act 1956 with all shares held by the Government of Karnataka, qualifies as a Government Entity. - Kudala Sangama Development Board: Established under the Kudala Sangama Development Board Act 1994 with more than 90% of the board members from the State Government, qualifies as a Government Entity. - Karnataka Residential Educational Institutions Society (KRIES): Formed under the Societies Registration Act, managed by the State Government, qualifies as a Government Entity. 6. Specific Works Contracts: - Airport Terminal Building at Sogane Village and Greenfield Airport at Vijaypur: These are works supplied to the State Government but predominantly meant for commerce, thus covered under entry 3(xii) of Notification No.11/2017-Central Tax (Rate). - Other Contracts: The construction of High Security Prison, Basava International Center and Museum, and Government School Buildings are covered under entry 3(xii) of Notification No.11/2017-Central Tax (Rate), as amended. 7. Amendments to Notifications: - Notification No.22/2021-Central Tax (Rate), dated 31.12.2021: Removed Governmental Authority or Government Entity from the notification. - Notification No.03/2022-Central Tax (Rate), dated 13.07.2022: Further amended the notification to specify applicable GST rates. 8. Applicable GST Rates Post-Amendments: - All the contracts awarded to the applicant are covered under entry 3(xii) of Notification No.11/2017-Central Tax (Rate), as amended, attracting GST at 18% (CGST 9% and KSGST 9%) effective from 18.07.2022. Ruling: - Airport Terminal Building in Shivamogga: GST at 9% CGST as per entry No. 3(xii) of Notification No.11/2017-Central Tax (Rate). - Greenfield Airport at Vijayapura: GST at 9% CGST as per entry No. 3(xii) of Notification No.11/2017-Central Tax (Rate). - High Security Prison: GST at 9% CGST w.e.f 01.01.2022 as per entry No. 3(xii) of Notification No.11/2017-Central Tax (Rate), as amended. - Basava International Center and Museum: GST at 9% CGST w.e.f 01.01.2022 as per entry No. 3(xii) of Notification No.11/2017-Central Tax (Rate), as amended. - Residential School Complex in Chittapur: GST at 9% CGST w.e.f 01.01.2022 as per entry No. 3(xii) of Notification No.11/2017-Central Tax (Rate), as amended.
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