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TMI Blog2019 (3) TMI 1567X X X X Extracts X X X X X X X X Extracts X X X X ..... Mumbai, Dt. 11.07.2018 = 2018 (9) TMI 854 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA BRIEF FACTS OF THE CASE A. M/s. Shree Construction (hereinafter referred to as 'the party') are providing works contract service as sub-contractor to main contractor for original contract work pertaining to Railways. They execute and undertake composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017. B. It is the opinion of the party that as per Notification No-20/2017- Central Tax (Rate) dated 22-08-2017 the rate of GST is 12% for composite supply of works contract supplied by way of construction, erection, commissioning or installation of original works pertaining to railways. As per Sr.No-12 in press release of 25th meeting of GST council held at New Delhi on 18-01-2018, the rate of GST applicable to main contractor should be levied by sub-contractor. C. Further, it is stated by the party that as per Notification No-01/2018- Central Tax(Rate) dated 25-01-2018 the service provided by sub- contractor to main contractor for railway original works contract services is not specified in the notification. The party say that they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, it appears from the said Notification No. 20/2017-Central Tax (Rate) dated 22.08.17 that the category of WCS services provided by sub-contractor to main contractor is not covered by the said notification. (3) As per amending Notification No.01/2018-Central Tax (Rate) dated 25.01.2018, in para (C), it is substituted that in serial number (ix) and (x) that for Composite supply of WCS provided by sub- contractor to main contractor specified in item (iii) or item (iv) to the Government Entity, rate of tax prescribed is 12%. However, for construction services other than (v), rate of tax is prescribed as 18%. Therefore, in terms of Notification No.01/2018-Central Tax (Rate) dated 25.01.2018, the services provided by sub- contractor to main contractor for railway original works contract services are excluded from the main entry (ix) and (x) of the said notification. All other construction services other than specified services will therefore attract rate of 18% tax which includes services provided by sub-contractor to main contractor for railway original works contract. (4) Therefore, the ARA Order stating that the applicants' services are covered by the original works cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advance Ruling Authority has decided that the works contract services provided by M/s. Shree Construction as sub-contractor to its main contractor are squarely covered under the item (v) of Sr. 3, describing the Construction services, under the Notification No. 11/2017 dated 28.06.2017 as amended by the Notification No. 1/2018 dated 25.01.2018, which provides for the concessional rate of 12% GST on the composite supply of works contract as defined in clause (119) of Section 2 of the CGST Act, 2017, supplied by way of construction, erection, commissioning, or installation of original works pertaining to railways, including monorail and metro. They had agreed to the applicant's contention that since the works contract services provided by them is same, or part of the works contract entered between the main contractor and Railways because the services performed by them as well as property in goods i.e. material used by them in the execution of the works contract are directly getting transferred to the railways in its entirety without any change, modification or alteration therein. Thus, the composite supply of any works contract undertaken by the sub-contractor as per the agreement e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or recipient of the services in this case. If the services fulfil the criteria of the activities/services having description contained the above item (v), then it is immaterial that who is providing services to whom. (10) We do not find any merit in the above mentioned contention of the Jurisdictional Officer as from the plain reading of the item (v) of the Sr. 3 of the Notification, it is very much clear that any supply of works contract pertaining to the railways including monorail and metro is subject to concessional rate of 12% GST. In the instant case, though the respondent i.e. M/S. Shree Construction is providing works contract services to its main contractor who has entered into works contract agreement with railways, the composite supply of works contract being carried out by M/s. Shree Construction is ultimately going to the use of railways without being subjected to any change or modification, thus the said works contracts, though undertaken by the sub-contractor, is undoubtedly pertaining to the railways and no one else. Thus, the condition specified under item (v) of the Sr. 3 of the said notification is completely fulfilled and therefore the services provided by th ..... 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