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TMI Blog2021 (10) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... s the applicant has not made supply of pure services but has made supply of works contract services they are covered by exception to the exemption given under entry (3) of the above notification. It is evident that entry 3(vi) of the Notification is specific entry covering only certain construction services. This entry does not cover other works contract services under service head 9954 which include long-distance underground/overland/ submarine pipe lines, communication and electric power lines (cables); pumping stations and related works; transformer stations and related works i.e., General construction services. However there is a residual entry at 3(vii) of the above Notification covering all other construction services not mentioned in the preceding entries. The services supplied by the contractor to the applicant do not fall under entry 3 (vi) of Notification 11/2017 CTR dated.28.06.2017 as modified by Notification No.24/2017 dated.21.09.2017 and Notification no. 17/2018 dt:26.07.2018. Therefore this supply of works contract service is covered by Entry (vii) of Serial No. (3) of the said notification as inserted by way of substitution vide notification no. 24/2017 dt:21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules. 2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression 'GST Act' would be a common reference to both CGST Act and TGST Act. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of ₹ 5,000/- for SGST and ₹ 5,000/- for CGST towards the fee for Advance Ruling. The concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted 4. Brief facts of the case: The applicant M/s. Transmission Corporation of Telangana Limited (TS TRANSCO) is State Transmission Utility (STU) notified by Government of Telangana under Section 39 of Electricity Act, 2009. The applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to I CAD department. 5. Tax liability for supply of works contract service by the applicant to south central railway. 6. Tax liability for procuring works contract services by the applicant from a 3rd party in order to supply the same to south central railway. However, The Sate member retired on Superannuation on 31.01.2021. Further, Government of Telangana vide G.O. Rt. No. 216, Rev(CT-II) Dept, Dt.16.06.2021 have nominated Sri S.V. Kasi Visweswara Rao, Additional Commissioner (ST) as member to The Authority for Advance Ruling and hence the case was re-posted a fresh on 09.07.2021. Heard the case. The authorized representatives Sri. Shankar Bala, CA AR Smt. Radhika Verma, CA AR, Smt. J. Anuradha, DyCCA, TS TRANSCO Appeared before the AAR on 09.07.2021 and reiterated their averments in the application submitted and contended as follows: The authorized representatives reiterated their averments in the application submitted and contended as follows: 1. That the government departments have requested for installation of transformers and laying of cables in specific locations identified by such government departments for example GHMC, Irrigation CAD. That th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the earlier. (Provisions of paragraph 2 of this notification shall apply for valuation of this service) competent authority or after its first occupation, whichever is 9 (ii) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017. 9 (iii) construction services other than (i) and (ii) above 9 This notification was further qualified to give exemptions and reduce the rate of tax to the specific works undertaken. 1. Notification no. 12/2017 dt: 28.06.2017 - Pure services provided to State and Central Government or a local authority was made exempt from tax if such works were undertaken in respect of any function enumerated in Article 243G and 243W of the Constitution of India. This notification excluded works contract services or other composite supplies involving supply of goods from this exemption. 2. Notification no. 17/2018 dt: 26.07.2018 - The followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (cables); pumping stations and related works; transformer stations and related works 16 Group 99542 995424 General construction services of local water and sewage pipelines, electricity and communication cables and related works 17 995425 General construction services of mines and industrial plants 18 995426 General Construction services of Power Plants and its related infrastructure 19 995427 General construction services of outdoor sport and recreation facilities 20 995428 General construction services of other civil engineering works nowhere else classified 21 995429 Services involving repair, alterations, additions, replacements, renovation, maintenance or remodeling of the constructions covered above As seen from the annexure to the notification, the works done by the applicant fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is evident from the entry 3 of Notification 12/2017 CT (R) dated 28 June 2017 that only pure services which do not involve any works contract involving supply of goods or other composite supply involving supply of goods are exempted from tax under CGST/SGST. As seen from the above abstract of estimate of supply to GHMC, the applicant has executed works contract services for GHMC involving supply of goods. As the applicant has not made supply of pure services but has made supply of works contract services they are covered by exception to the exemption given under entry (3) of the above notification. Further, the nature of works contract services supplied is covered by service head 995423 of General construction services as the work involves laying of electric power lines. Therefore this supply of works contract service is covered by Entry (vii) of Serial No. (3) of the said notification as inserted by way of substitution vide notification no. 24/2017 dt:21.09.2017. The same entry was later retained as Entry (xi) of Serial No. 3 to notification 11/2017 vide a substituted notification no. 3/2019 dt: 29.03.2019. Therefore this supply of works contract services involving goods to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rks undertaken by the applicant's contractor do not fall under the above entry for the reason discussed supra all other qualifications to the entry also becomes inapplicable for interpretation of the entry. In view of the above discussion, the services supplied by the contractor to the applicant do not fall under entry 3 (vi) of Notification 11/2017 CTR dated.28.06.2017. This supply of works contract service is covered by Entry (vii) of Serial No. (3) of the said notification as inserted by way of substitution vide notification no. 24/2017 dt:21.09.2017. The same entry was later retained as Entry (xi) of Serial No. 3 to notification 11/2017 vide a substituted notification no. 3/2019 dt: 29.03.2019. Therefore this supply of contractor to the applicant is taxable at the rate of 9% under both CGST SGST Acts respectively. 3. The applicant has submitted that they have made construction of electricity transmission infrastructure to the pumping stations under various lift irrigation schemes. That the assets so constructed are retained by them in their books and amortised over a period of time. They further state that the State Government sanction grants to the applicant for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted works; transformer stations and related works. That in their view supply of this service is taxable @18%. As discussed in the Paragraphs above, it is observed that the supply of general construction services which enumerated at entry 3 (vii) of Notification 24/2017 dt.29.01.2017 which is retained as entry 12 vide Notification 3/2019 Central Tax dt.29.01.2019 and are taxable @9% under CGST/SGST Acts. 6. It is submitted by the applicant that they engage a private turnkey contractor on a back to back arrangement to execute the electric contract discussed in Para 5 above for South Central Railway. That these services supplied by such private contractor are covered by entry 3 (vi) (a) of the Notification 11/2017 dt.28.06.2017. The applicant itself has submitted in the earlier arguments at Para 5 that the works executed by them for South Central Railway are covered by entry 3 (vii) of the Notification 24/2017 dt.29.01.2017 which is retained as entry 12 vide Notification 3/2019 Central Tax dt. 29.01.2019 The findings of the undersigned authority in the earlier discussion make it clear that the works contract service supplied by the applicant are in nature of General Construct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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