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TMI Blog2021 (7) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... on the same question raised by the appellant before us and the said proceeding is still pending before the DGGSTI, Indore. The first proviso to section 98(2) of CGST Act, 2017 is very clear, that the authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in case of an applicant under any of provisions of this Act - the Advance Ruling Authority has rightly rejected the appellant's application as per the first proviso to section 98(2) of CGST Act, 2017 on the grounds that the question raised by the appellant before the Authority is pending with the DGGSTI and proceeding against the appellant is underway by the DGGSTI, Regional Unit, Indore. Section 100(1) mandates that only a ruling pronounced under sub-section (4) of section 98 of CGST, Act, 2017 can be appealed before the Appellate Authority for advance, Ruling. It is found that the Advance Ruling Authority in its Order 20/2020 has rejected the application of the appellant under section 98(2) of CGST, Act, 2017, and it cannot be said to be any advance ruling pronounced under sub-section (4) of section 98 of CGST, Act, 2017, therefore the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (R) as am aided on 22-08-2017 which runs as under: (iii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Government, a local authority or a Governmental authority by way of construction, erection, commissioning installation, completion, fitting out, repair, maintenance, renovation, or alteration of, - or (a) a historical monument, archaeological site or remains of national importance, archaeological excavation, antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); (b) canal dam or other irrigation works: (c) pipeline, conduit or plant for (i) water supply (ii) water treatment or (iii) sewerage treatment or disposal, 6 - iv. M/s Navyuga Engineering Company Ltd was collecting paying tax @ 12 % as per the above notification on its works contract agreement with the Narmada Valley Development Authority. It had also advised the appellant to follow suit. Hence for the period from 22-08-2017 the appellant has raised his invoices with 12 % tax to M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of the appellant allegedly by exercising their powers under Section 67 of the Act. It may be noted that the officers have not found any discrepancy till date within the meaning of Section 67(1). Despite the same they have confiscated a pen drive containing commercial data u/s 67(2). The only point raised by the said officers till date, as evidenced by their letters dated 21-05-2020 08-06-2020 concerns the tax liability of a sub contractor in respect of works contracts that are liable to tax @ 12 % at the hands of principal contractor. In view of the above facts the appellant had posed the following question for determination by the Advance Ruling Authority What is rate of tax applicable to a sub contractor, where, he executes works contract pertaining to dam, wherein the principal contractor is liable for tax @ 12 %, for the period from 22-08-2017 to 25-01-2018? viii. During the course of preliminary hearing the AAR raised a preliminary objection as to why the application should not be treated as being barred as per the proviso to Section 98 (2). The said proviso bars any advance ruling if the question raised is pending or decided in any proceedings under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed directly from the sub-contractor to the employer. Now, in view of the said ruling, the appellant cannot be blamed to have followed the ruling claimed that his supplies are directly to the Government therefore is covered by notifications dated 22-08-17 or dated 21-09-17. ii. The appellant submits that, the AAR has sought refuge to proviso to Section 98 (2). The appellant submits that Section 67 does not cover their case. The above provision can be dissected as being applicable only when there is suppression of supply or stock or when ITC in excess of the entitlement is claimed or there is contravention of law in order to evade tax. In the present case, at the cost of repetition, they submitted that the DGGSTI authorities have not found anything close to evasion, suppression. They have simply issued a letter directing the appellant to make payment of tax on their own understanding of law, to which, the appellant begs to differ. It has been the case of the appellant that mere issue of such letter cannot be said to be any proceedings within the meaning of proviso to Section 98(2). On the issue that contravention should be with the intent to evede, the appellant has relied. on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respectfully submits that there is no proceeding pending against the appellant on which an Advance Ruling is sought. The appellant submits that the issue raised in the present Advance Ruling falls outside the ambit of Section 67 (1) because mere issue of letters for payment of differential tax does not amount to a proceeding, such as is contemplated by proviso to Section 98 (2) to prohibit the appellant from seeking the Advance Ruling. v. The appellant submits that the issue of parity in the rate of tax to be applied to sub contractors where their principal contractors are enjoying concessional rate of tax has been favorably decided by the GST Council in its 25th Council in favor of the Sub contractors consequently notification no.11/2017 was amended clause ix reproduced at Para no 5 above was inserted with effect from 25-01-2018. It may be noted that the Council did not deliberate on whether to give a prospective effect or retrospective effect. However, it fully endorsed the view that there ought to be parity of tax between the contractor sub contractor. vi. Appellant submits that the issue as to whether the notification referred to above in Para no 5 is clarificatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Civil Appeal No. 2318 of 2013 and Civil Appeal No. 7241 of 2016, decided on September 5, 2016.) where it lays down in para 19 that if one keeps in mind the above quoted observation of this Court in Builders Assn. of India the position becomes clear, namely, that even if there is no privity of contract between the contractee and the subcontractor, that would not do away with the principle of transfer of property by the subcontractor by employing the same on the property belonging to the contractee. Appellant submits that in the present case, it must be held that the property got transferred to the employer directly from the appellant hence all the conditions in the notifications for concessional rate get fulfilled right from 22-08-2017. xi. The appellant prays that: a. the turnover of the appellant shall stand governed by notification entry (iii) for the period from 22-08-2017 to 25-01-2018 till entry (ix) was inserted. OR b. the turnover of the appellant shall stand governed by notification entry (vi) for the period from 21-09-2017 to 25-01- 2018 till entry (ix) was inserted. c. the supplies of appellant as a sub contractor are supplies to employer i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .09.2021, informed that they have initiated proceedings of determination of short payment/non-payment of GST against the appellant on the issue of wrong availment of benefit of certain provisions of notification wherein lower rate of GST 12% is prescribed for works contract services pertaining to irrigation work when provided to Government, Governmental authority and local authority for the period July 2017 to January 2018. That the appellant provided the aforementioned services to M/s Navayuga Engineering Company Limited as a sub-contractor for which the applicable rate of GST, is 18% in terms of Notification No.11/2017- Central Tax (Rate) dated 28.06.2017 as amended. For sub-contractors, subsequently the rate of tax for such services got reduced to 12% vide Notification No.1/2018- Central Tax (Rate) dated 25.01.2018. It was also informed that the said investigation in the matter is undergoing. As per the submission of appellant and available records, we find that Directorate General of Goods Services Tax Intelligence (DGGSTI), Regional Unit, Indore, has already initiated proceeding against the appellant on the same question raised by the appellant before us and the said proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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