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TMI Blog2022 (4) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... main contractor providing services specified in item (vii) of Sr No 3 of Notification 11/2017-CTR to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity. The Particulars of various work items to be done by the applicant includes : Excavation for Tunnel work in all kind of soft-strata and rock including ventilation arrangement ; Providing and fabrication, transporting and erecting structural supports ; Providing and rock bolting in position (work order in running meter) ; Providing and fixing in position M.S. reinforcement; Providing and applying material component shot crating in two layers ; providing ad fixing chain link ; providing and laying in situ cement concrete in grade M-15 ; Providing and laying in situ cement concrete in grade M-20 ; removing excavated stuff from underground excavation ; providing drainage arrangement and bailing out water, etc. The Composite supply of works contract is provided by the applicant sub-contractor to the main contractor who is further providing services specified in item (vii) above to the Central Government, State Government, Union territory, a local authority, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nceforth for the purposes of this Advance Ruling, the expression GST Act would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT FACTS: 2.1 M/s. Mahalxmi B T Patil Honai Constructions JV (Referred to as JV) registered under Goods and Service Tax Act, 2017, situated at 363/11, Balaji Niwas, Shivajinagar, Pune-411 016 is engaged in the business of Construction of infrastructure projects. The said IV was formed on 16/12/2008 to undertake construction of Jeur Tunnel under (Linking Ujani Reservoir to Sina, Kolegaon reservoir) Krishna Marathwada Irrigation Project, Tal. Karmala, Dist. Solapur a work allotted by Executive Engineer, Lift Irrigation Division, Osmanabad Project awarded by Godavari Marathwada Irrigation Development Corporation (GMIDC), Aurangabad. 2.2 The Said JV consists of three members, viz. M/s. Mahalaxmi Infraprojects Pvt Ltd., M/s. B T Patil Sons (Belgaum) Constructions Pvt Ltd and Honai Constructions and was formed to get the work and to share it amongst the members of JV. Accordingly, the applicant and M/S B T Patil Sons (Belgaum) Constructions Pvt Ltd are executing the work in the Ratio 50:50 proportion. 2.3 As per stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... racts involved in the instant case and even the project is one and the same added by GMIDC. It was held that the work carried out by the Applicant JV is covered by Entry 3(vii) of Notification No. 11/2017-CTR as amended by Notification No. 31/2017-CTR. Accordingly, sub-contractors of IV are also eligible for the same tax rate under Sr. No. 3(x) of the said Notification. 2.8 It is requested that the aforesaid questions raised, may be decided in favour of the Applicants in terms of Order No. MAH/AAAR/SS-RJ/21/2019-20 dtd 20.01.2020 of Soma Mohite Joint Venture. 2.9 Assistant Commissioner, Divn-III (Deccan) CGST, Pune-II Commissionerate, vide letter dt 30.07.2021 has agreed that services provided by Applicants fall within the description of services specified in column 3 of the Notification and they have satisfied all conditions of column 5 of the Notification. Also, Deputy Commissioner, Central GST, Division-III, Kolhapur vide email dated 10.01.2022 has agreed to applicability of GST @ 5% under Entry 3(x) of the Notification. 2.10 Further, the Deputy Commissioner (E-505), SGST, Large tax Unit-1, Pune vide letter dt 18.01.2022 has opposed the Application filed by the Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tunnel work in all kind of soft-strata including ventilation arrangement (workorder in Cubic Meter). Item No. 2: Excavation for Tunnel work in all kind of rock including ventilation arrangement (work order in Cubic Meter). item No. 3: Providing and fabrication, transporting and erecting structural supports (work order in Metric Ton). Item No. 4: Providing and rock bolting in position (work order in running meter). Item No. 5: Providing and fixing in position M.S. reinforcement (work order in metric ton). Item No. 6: Providing and applying material component shot crating in two layers (work order in sq. meter). Item No. 7: providing ad fixing chain link (work order in square meter). Item No. 8: providing and laying in situ cement concrete in grade M-15 (work order in cubic meter). Item No. 9: Providing and laying in situ cement concrete in grade M-20 (work order in cubic meter). Item No. 10: removing excavated stuff from underground excavation. (Work order in cubic meter). Item No. 11: providing drainage arrangement and bailing out water (work order in BHP per Hour). As per work order, app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l supports Providing and fixing Rock bolting Providing and fixing M.S. Reinforcement Providing and fixing chain link Providing and laying cement concrete Removal of excavated stuff Providing drainage arrangement which are executed by the applicant are available separately in such type of works-contract and same can be availed by Principal Contractor by giving work orders to various individual suppliers of services and goods. As such, work executed by the applicant is not a naturally bundled service and does not qualify under Composite supply. 3) The nature of various services - services rendered by applicant, such as excavation, removal of excavated stuff, drainage arrangement can be availed from various sub-contractors and hence, the services supplied cannot be treated as provision of a single service which gives such bundle its essential character. 4) Different elements are combined to one overall supply - Services and goods as per above work items supplied by the applicant are of varied nature, has independent existence can be supplied executed separately by various sub-contractors without dependency on each other hence, cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drainage arrangement etc. wherein total earth work is approximately 91% and construction work is approximately 9% wherein transfer of property is involved. According to the applicant the impugned activity of the Principal Contractor is a Composite supply of works contract as defined in clause (119) of section 2 of the CGST Act, 2017, where such supply is to a Governmental Authority/Government Entity. 5.4 The applicant has submitted that the Principal Contractor has outsourced fifty percent of the work to the applicant. While making detailed submissions regarding the activity of the Principal Contractor, the applicant has also submitted that, the two questions raised by the applicant are in respect of the impugned supply provided to the Principal Contractor as the sub-contractor. 5.5.1 The jurisdictional officer has submitted that, as per the concerned work order, applicant has been awarded various work items involving supply of services along with supply of goods. However, the work items executed by the applicant cannot be said as naturally bundled one to qualify as Composite supply as work items sub-contracted to the applicant has been ordered and measured in separate units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Venture (SMJV) wherein it was held that the work carried out by Soma Mohite Joint Venture was covered by Entry 3(vii) of Notification No. 11/2017 -CTR as amended by Notification No. 31/2017-CTR dated 13.10.2017. 5.7.1 We have already observed in the Advance Ruling Application filed by the Principal Contractor in respect of the same Work Order that, the impugned Contract/Work Order, involves activities consisting of Earth Work such as Excavation for Tunnel, removing of excavated stuff, fabrication, transporting, providing steel support, rock bolting, reinforcement, fixing of chain link cement concerting, providing drainage arrangement etc. wherein, the total earth work is approximately 91% and construction work is approximately 9% and where transfer of property is involved and held that the activity of the Principal Contractor, part of which is outsourced to the applicant, is a Composite supply of works contract as defined in clause (119) of section 2 of the CGST Act, 2017, where such supply is to a Governmental Entity, i.e. GMIDC. Further, we also held that, the said work has been procured by GMIDC in relation to work entrusted to it by the State Government of Maharashtra. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory, 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 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. 5.9.3 Section 3 (x) of Notification No. 11/2017 CTR dated 20.06.2017 as amended, covers Composite supply of works contract as defined in clause (119) of section 2 of the CGST Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (vii) of Sr No 3 of Notification 11/2017-CTR to the Central Government, State Government, Union territory, a local authority, a Governmental Autho ..... 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