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TMI Blog2019 (3) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Amit Gupta (Member) Jurisdictional Officer: Assistant Commissioner, CGST Division, Rudrapur Present for the Applicant: Shri N.K. Gupta, DGM (Finance), Shri J C Pant, Senior Manager (Law) Present for the Jurisdictional Officer: None Present for Concerned Officer: None Note : Under Section. 100(1) of the Uttarakhand Goods and Services Tax Act, 2017, an appeal against this ruling lies before the appellate authority for advance ruling constituted under section- 99 of the Uttarakhand Goods and Services Tax Act, 2017, within a period of 30 days from the date of service of this order. RULING 1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 (herein after referred to as Act) and the rules made thereunder filed by M/s NHPC, Admin Building, Tanakpur Power Station, Banbasa, Uttrakhand seeking an advance ruling on the issue: (a) Whether the Notification No. 12/2017-Centra1 Tax (Rate) dated 28.06.2017 (as amended from time to time) is applicable to the contractors/ sub- contractors involved in the construction of Indo-Nepal Border Road or otherwise. 2. Advance Ruling under GST means a decision provided by the authority or the appellate autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Km link road will be financed out of the budgetary outlays of MEA under the budget head "Aid to Nepal". Initially NHPC can spend the money, if required, subsequently the same can be recouped from the budget of MEA to NHPC directly. Budget releases will be made by MEA to NHPC which is executing the project as a turnkey agency of MEA based on the recommendation of the Ministry of Power. 7. The applicant further submitted the MOU dated 03.10.2018 signed between General Manager, NHPC Ltd, Tanakpur Power Station, Champawat, Uttarakhand (herein after referred as client/department) and Superintendent Engineer, PWD, Champawat, Uttarakhand (herein after referred as construction agency). The relevant portions of the same are summarized as under: i. On the proposal of client, construction agency has agreed to do construction and related works of construction of 1.3 km motor road from Tanakpur Barrage to Brahmdev in District Champawat ii. Total cost of the project is ₹ 6.72 cr including GST & contingencies as indicated in the administrative and financial sanction issued as informed by General Manager, NHPC, Tanakpur Power Station vide letter dated 02.07.2018. iii. The cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work of construction of road by Ministry of External Affairs, Govt. of India (in short "MEA") wherein the funds will be provided by MEA from its head "Aid to Nepal" to M/s NHPC Ltd. It means that the funds provided by MEA to M/s NHPC Ltd are in the form of grants. The function of M/s NHPC Ltd in the said work has been defined as "turnkey agency". The issue of GST liability on the applicant on this matter has already been decided by us vide Ruling No.10/2018-19 dated 22-10-2018 wherein the activity of the applicant was held exempted from GST in terms of Notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 (as amended from time to time). 8.4 The applicant in their present application has sought advance ruling on the applicability of GST on sub-letting of work entrusted to PWD, Uttarakhand and contractor hire by PWD, Uttarakhand for completion of said work. On this issue we have different views and are discuss as under: (a) [Ruling per: Vipin Chandra, Member]- In the background of the issue in hand, the applicant has earlier sought the advance ruling on the applicability of GST on the activity being carried out by them and vide Advance Ruli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017, supplied by Way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (a) a road, bridge, tunnel, or terminal for road transportation for use by general public; (b) a civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana; (c) a Civil structure or any other original works pertaining to the "In-situ rehabilitation of existing slum dwellers using land as a resource through private participation" under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana, only for existing slum dwellers; (d) a civil structure or any other original works pertaining to the "Beneficiary led individual house construction / enhancement" under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana; (e) a pollution control or effluent treatment plant, except located as a part of a factory; or (f) a structure meant for funeral, burial or cremation of deceased. 6 (v) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity. 6 Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be (x) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (vii) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity. 2.5 Provided that where the services supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Entity to Central Government, State Government, Union territory, local authority or any person specified by Central Government, State Government, Union territory or local authority against consideration received from Central Government, State Government, Union territory or local authority, in the form of grants. Nil Nil I find that the Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017 supra (amended vide Notification No. 20/2017- Central Tax (Rate) dated 22.08.2017, Notification No. 24/2017- Central Tax (Rate) dated 21.09.2017 & Notification No. 31/2017- Central Tax (Rate) dated 13.10.2017) notifies that the central tax, on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table. Initially, the GST rate on works contract service was notified at 18%. Subsequently, various notifications were issued notifying the various GST rates for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of service in the form of work contract by the sub-contractors will also come in the purview of exempted or 0%. Thus I observe that if the principal contractor is providing an exempt works contract service to Government in terms of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended from time to time) and in such case if works contract is partially or wholly sub-contracted then the sub-contractors would also be exempted from payment of GST. In support of my view, I rely on following case laws : (i) The Hon'ble Supreme Court in the case of Director of Enforcement Vs Deepak Mahajan [reported in (1994) 3 SCC 430] has observed that "mechanical interpretation of the words and application of legislative intent devoid of concept of purpose and object will render the legislation insane". (ii) In the case of Siraj-ul-Haq Khan Vs Sunni Central Board of Waqf [reported in AIR 1959 SC 198], the Hon'ble Apex Court held that "an attempt must always be made to reconcile the relevant provisions so as to advance the remedy intended by statute. Where the liberal meaning of the words used in a statuary provision would manifestly defeat its object by making a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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