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2023 (3) TMI 1253 - AAR - GSTConstruction and re-carpeting of C.C. Road - Applicability of Notification No. 11/2017 - Central Tax Rate dt. 28th June, 2017 amended with Notification No. 24/2017 - Central Tax (Rate) dt. 21.09.2017 and further amended vide notification no. 31/2017 - Central Tax (Rate) dt. 13.10.2017, and furthermore amended vide notification no. 15/2021 - Central Tax (Rate) dt. 18.11.2022 - GST rate applicable for the nature of work being awarded. HELD THAT - The applicant is undertook the work of construction mainly Construction and Re-carpeting of C.C. Road from RIICO. Rajasthan State Industrial Development Investment Corporation is a body constituted under RIICO Industrial Areas (Prevention of Unauthorized Development and Encroachment) Act, 1999 as a special vehicle for undertaking of various government projects as envisaged by the Government of Rajasthan, but it's not Government itself - The Rajasthan State Industrial Development Investment Corporation (RIICO) is a corporation constituted under RIICO Industrial Areas (Prevention of Unauthorized Development and Encroachment) Act, 1999. The (RIICO) is constituted by the State Government and it is not falls under definition of state or central Government . It is clear that the words or a Governmental authority or a Government Entity has been omitted at serial number 3, in column (3), in the heading Description of Services in the said Notification No. 11/2017-Central Tax (Rate), dated the 28th June, 2017 vide aforesaid Notification No. 15/2021-Central Tax (Rate) dated 18.11.2021. It is observed that the applicant is registered with GST authorities and well aware about the type of supply, its notification, circular, discharging his GST tax liability and submitting his GST returns in accordance to them wef execution of contract - Notification No. 11/2017 - Central Tax Rate dt. 28th June, 2017 amended with Notification No. 24/2017 - Central Tax (Rate) dt. 21.09.2017 and further amended vide notification no. 31/2017 - Central Tax (Rate) dt. 13.10.2017, and furthermore amended vide notification no. 15/2021 - Central Tax (Rate) dt. 18.11.2022, has been further amended vide Notification No. 03/2022- Central Tax (Rate), Dated 13th July, 2022, thus applicant should pay tax in accordance to latter amendment of Notification. The applicant will be liable to pay GST @18% in light of Notification No. 11/2017 - Central Tax Rate dt. 28th June, 2017 amended with Notification No. 03/2022- Central Tax (Rate) Dated 13th July, 2022.
Issues Involved:
1. Applicability of Notification No. 11/2017 - Central Tax Rate dated 28th June 2017, as amended, to the services provided by the applicant. Detailed Analysis: 1. Background and Submission of the Applicant: The applicant, a registered person under GST, sought an advance ruling on the applicability of certain GST notifications to a contract awarded by the Rajasthan State Industrial Development & Investment Corporation (RIICO) for the development of a commercial complex, specifically for the construction and re-carpeting of C.C. Road. The applicant argued that RIICO is a governmental authority and thus the applicable GST rate for the services provided should be 12%, as per Notification No. 11/2017 - Central Tax Rate dated 28th June 2017, and its subsequent amendments. 2. Definition and Status of RIICO: The applicant contended that RIICO, being constituted under the RIICO Industrial Areas (Prevention of Unauthorized Development and Encroachment) Act, 1999, qualifies as a governmental authority. The applicant cited various provisions of the CGST Act, the General Clauses Act, and the Constitution of India to support this claim, arguing that the executive actions of RIICO are performed under the name of the Governor of Rajasthan. 3. Legal Position and Interpretation: The applicant asserted that the construction services provided to RIICO should attract a GST rate of 12% as per the description of services under Si. No. 3(vi)(a) of Notification No. 11/2017, as amended by subsequent notifications. The applicant emphasized that the nature of the work, primarily construction and re-carpeting of roads, falls under the specified category of services eligible for the reduced rate. 4. Personal Hearing and Additional Submission: During the personal hearing, the applicant reiterated the submissions and provided additional documents, including the work order and agreement. The applicant also mentioned a tender related to pure labor service contracts, suggesting that RIICO could be considered a government entity for the applicability of the notification. 5. Comments of the Jurisdictional Officer: No comments were received from the Jurisdictional CGST Division despite multiple requests, leading the authority to proceed without their input. 6. Findings, Analysis, and Conclusion: The authority examined the facts, supporting documents, and legal provisions. It noted that RIICO, although constituted by the state government, does not fall under the definition of "Government" as per Section 2(53) of the CGST Act and the corresponding provision in the Rajasthan GST Act. The authority also considered the amendments made to Notification No. 11/2017, particularly the omission of the words "or a Governmental authority or a Government Entity" by Notification No. 15/2021 and the increase in GST rates for certain works contracts to 18% by Notification No. 03/2022. 7. Decision and Ruling: The authority concluded that the services provided by the applicant to RIICO do not qualify for the reduced GST rate of 12%. Instead, the applicable GST rate for such services, as per the latest amendments, is 18%. The ruling explicitly stated that the services provided by the applicant to RIICO after 13th July 2022 would attract an 18% GST rate. Conclusion: The applicant is required to pay GST at the rate of 18% for the services provided to RIICO, as per Notification No. 11/2017, as amended by Notification No. 03/2022, effective from 13th July 2022. The authority's decision is based on the interpretation that RIICO does not qualify as a government entity under the relevant GST provisions.
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