9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (10) TMI 1097 - AAR - GSTExemption from GST - activity of providing, laying, jointing, testing and commissioning of sewer system and all ancillary works - Applicability of entry 3B of the NN 13/2017-CT (Rate) dated 28.06.2017 - BIKANER NAGAR NIGAM is local authority or not. HELD THAT - In the instant case the applicant is engaged in providing 'works contract services'. The applicant also admits the fact that they are engaged in supply of goods along with services for an immovable property. Thus, the services provided by the applicant are found to be works contract services, where goods along with services are supplied. BIKANER NAGAR NIGAM is covered under the definition of Local Authority. In the instant case, the applicant is providing services to BIKANER NAGAR NIGAM which is a local authority. The applicant provides services to Nagat Nigam, Bikaner, which is a local authority' and all the three entries Sr No 3, 3A and 3B of the Notification 12/2017-CTR dtd 28.06.2017 are consistent and should not be read individually, the rate of tax on services provided by the applicant should be decided in terms of Sr No. 3 and 3A, since the said entries cover services provided to 'local authority', there need to go to Sr No. 3B - It is pertinent to mention here that the applicant has discharging it's tax liability by paying 18% GST (SGST CGST 9%) considering the supply of construction civil work under SAC 995424 prior to 19.10.2023. The SAC 995424 stands for general construction services of local water and sewerage pipelines, electricity and communication cables and related works. The applicant is providing its services to NAGAR NIGAM, BIKANER (local authority) of Providing, laying, jointing, testing and commissioning of sewer system and all ancillary works along with Design, construction, supply, installation. testing and commissioning (Civil, Electrical, Mechanical and Instrumentation and other necessary works) of Sewage Pumping Station/MWP(if any), Sewage Treatment Plant based on SBA Process with provision for waste water reuse including MPS and 10 MLD capacity STP based on SBR process With provision of 1 year defect liability 5 years O M for towns under package AMRUT-2.0/RAJ/SEWERAGE-13.. So, exemption entry No. 3B is not applicable to the applicant.
Issues Involved:
1. Applicability of GST exemption under entry 3B of Notification No. 13/2023-CT (Rate) for services related to sewer system installation and commissioning. 2. Classification of the services provided as works contract and its implications on tax liability. 3. Interpretation of the term "Governmental Authority" and its relevance to the exemption claim. Issue-wise Detailed Analysis: 1. Applicability of GST Exemption under Entry 3B: The applicant, engaged in providing services related to the installation and commissioning of a sewer system, sought clarity on the applicability of GST exemption under entry 3B of Notification No. 13/2023-CT (Rate). The notification exempts services provided to a Governmental Authority in areas such as water supply, public health, sanitation conservancy, solid waste management, and slum improvement. The applicant argued that their services fall under sanitation conservancy and hence should be exempt. However, the ruling concluded that the exemption under entry 3B is not applicable to the applicant's services because the services are provided to a local authority (Nagar Nigam Bikaner), which does not qualify under the definition of a Governmental Authority for the purposes of this exemption. 2. Classification as Works Contract: The services provided by the applicant were classified as a works contract, which involves a composite supply of goods and services related to immovable property. According to Section 2(119) of the CGST Act, a works contract is defined as a contract for various activities such as building, construction, and installation, where the transfer of property in goods is involved. The ruling emphasized that the applicant's services constitute a works contract since they involve the supply of goods along with services for an immovable property. Consequently, the services are not eligible for exemption under entry 3B, which primarily pertains to pure services or composite supplies with a goods component not exceeding 25%. 3. Interpretation of "Governmental Authority": The applicant's claim for exemption hinged on the interpretation of "Governmental Authority." The ruling clarified that a Governmental Authority, as defined in the notification, refers to an entity set up by an Act of Parliament or a State Legislature with significant government participation to perform functions entrusted to a Municipality under Article 243W of the Constitution. The ruling noted that the services provided to Nagar Nigam Bikaner, a local authority established under the Rajasthan Municipalities Act, do not fall under the scope of services provided to a Governmental Authority as intended by the exemption. Conclusion: The ruling concluded that the services provided by the applicant do not qualify for the GST exemption under entry 3B of Notification No. 13/2023-CT (Rate), as they are classified as works contract services provided to a local authority, not a Governmental Authority. Therefore, the applicant is liable to pay GST on the services rendered.
|
