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TMI Blog2022 (10) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... is definitely required in the state of Odisha, where the work is being carried out. In the present case, we observe from the E-Tender documents of East Coast Railway that the Applicant shall, at its own expense, will provide it self with Sheds, Store houses and Yards in such situation and in such numbers as in the opinion of the Engineer is requisite for carrying on the works and the Applicant shall keep at each such sheds, storehouses and yards a sufficient quantity of materials. The Applicant has sub contracted some part of the work to M/s SRC Company Infra (P) Ltd, Hyderabad. The value of the contract accepted by the sub-contractor is Rs. 137,60,47,790 out of the total cost of the contract of Rs.337.18 Cr. - The Engineer s representative shall have free access to the said sheds, storehouses and yards at any time for the purpose of inspecting the stock of materials. Further, the Applicant shall at its own cost provide and maintain suitable mortar mills, soaking vats or any other equipments Necessary for execution of the works. The Applicant is required to maintain suitable structures in terms of human and technical resources with sufficient degree of permanence at the sites ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dealer of Odisha? 1.1 At the outset, we would like to make it clear that the provisions of both the CGST Act and the OGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the OGST Act. 2.0 Submission of the Applicant 2.1 The Applicant having its principal place of business at Plot No. 06, 2nd floor,3 rd Floor, Belapur Bhawan, Sector-11, CBD Belapur, Navi Mumbai, Thane, Maharashtra, 400614 bearing GSTIN-27AAACK3725H1ZO is engaged in providing Works Contract Service, Transportation of Goods Transportation of Passengers Service by Railways, and Project Services to Zonal Railways and Other agencies. 2.2 The Applicant is a Government company and established in the year 1990 with equity participation by Ministry of Railways (51%), Maharashtra (22%), Karnataka (15%), Kerala (6%) and Goa (6%) for the purpose of construction and operation of Railway along the Western Coast of India. 2.3 The Applicant has received a letter of acceptance (LOA) dated 15th February 2022 for executing Construction of Maj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s over. Further, the Applicant shall, at his own expense, provide himself with sheds, storehouses, and yards in such situations and in such numbers as in the opinion of the Engineer is requisite for carrying on the works. 2.6 The Applicant contended that in the absence of fixed establishment from where the supply is made, the Location of Supplier of service is the location of the usual place of the supplier. In the instant case LOA received by the M/s Konkan Railway Corporation Ltd is Navi Mumbai, Maharashtra, hence location of Applicant(works contractor) will be the state where its principal place of business is registered i.e. Maharashtra state. 2.7 The Applicant has also contended that Place of supply is important to determine the kind of tax that is to be charged. When the location of the supplier and the place of supply are in two different States, then it will be an inter-State supply and IGST would be chargeable. And when they are in the same State, then it will be an intra- State supply and CGST/ SGST would he chargeable. The place of supply, in case of works contract services as governed by Section 12(3)(a) of IGST Act 2017, shall be the location at which the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbai, Maharashtra. Such site engineers will get site allowance as per the norms of the Applicant and will arrange their own stay near to site. All other Senior engineers involved in planning, drawing, designing, quality control and inspection will travel from Mumbai as and when required, for very short period. Few site Engineers deployed at site will occupy few desks in the site office of ECoR and Sub-contractor as per the tender conditions of Sub-contract. However, it is also important to state that there will be no rent agreement for such arrangement as both ECoR and Konkan Railway Corporation are working under Ministry of Railways, Government of India and cost of site office of KRCL will indirectly increase the cost of Project. Further, no rent will be paid to Sub-contractor for occupying few desks at Sub-contractor s site office. 2.12 The Applicant has submitted that as per contract, substantial value of work is sub-contracted to Sub contractor located registered under GST in the state of Odisha having GSTIN 21AATCS8714K1ZV. Sub-contractor will raise an IGST invoice to KRCL and KRCL will raise a works contract invoice charging IGST to ECoR. Hence there is no revenue lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us is squarely covered under Section 97(2) of the CGST Act, 2017 and therefore we admit the application for consideration. 5.2 It has been contended that the Applicant is registered under Maharashtra Goods and Service Tax Act, 2017 as Works Contractor. The Applicant has received a letter of acceptance (LOA) dated 15th February 2022 for executing Construction of Major bridges, ROBs, Supply of Vehicle, Site facilities other allied works between km 143 to km 184 (172 (29 Route km + 12.108 Long chainage=41.1 km)) of Khurda Road- Bolangir new BG Rail line project of East Coast Railway in Boudha District, Odisha. In its submission, the Applicant submitted that the place of supply, in case of works contract services as governed by Section 12(3)(a) of IGST Act 2017, shall be the location at which the immovable property (construction site) is located. In the Applicant s case, Place of Supply is State of Odisha and Location of Supplier is state of Maharashtra, hence IGST needs to be charged. Therefore, the Applicant is not required to have any separate GST registration in Odisha State. Also, It is to be stated that Works contact, being service, can be provided from anywhere. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Works Contract . 5.6 Before deciding the case, we need to discuss the provisions of registration for works contract service under GST. As per Sec 22(1), every supplier shall be liable to be registered under GST, in the State or Union territory, from where he makes taxable supply of goods or services or both, In case of inter-state supply of goods, registration is mandatory. It is pertinent to mention that registration is required in the State from which taxable supplies are made. Therefore, for the purposes of obtaining registration, it is important to identify the origin of supply even though GST is a destination based tax. Tax goes to the destination State but registration is required in the origin-State. In case of works contract service which is immovable in nature, place of supply is where the immovable property is located. Place of Supply (as determined from IGST Act) provides the destination and this is not relevant for registration. The location of Supplier is relevant for registration. As per Sec 2(71) location of the supplier of services means, (a) where a supply is made from a place of business for which the registration has been obtained, the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5.8 Further examination of the E-Tender documents of East Coast Railway reveals that the Applicant shall construct one site office for the Railway / Engineer. The Applicant shall supply and maintain new furniture and equipments for the Engineer s office and for this no extra payment will be paid by East Coast Railway. From the Applicant s submission, it has also been noticed that a good number of site Engineers and technical personnel of the Applicant will be deployed in Odisha for supervision of the job at site and give report to Applicant s head quarter at Mumbai, Maharashtra. Site Engineers deployed at site will occupy few desks in the site office constructed by the Applicant. 5.9 We also observe that the Applicant has sub contracted some part of the work to M/s SRC Company Infra (P) Ltd, Hyderabad. The value of the contract accepted by the sub-contractor is Rs. 137,60,47,790 out of the total cost of the contract of Rs.337.18 Cr. In this regard, the Applicant has contended that it has sub-contracted majority of work, except supply of Cement and Steel which will be procured and directly sent to site for consumption at Odisha, The Applicant further stated that it would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of permanence at the sites of East Coast Railway, Odisha to effect supply of desired services as per the terms and conditions of the work order. It has to ensure provision of works contract service for the contract period, indicating sufficient degree of permanence to the human and technical resources employed at the sites. The Applicant through its expert belonging, therefore, is to supply the services at the site from the establishment as defined under section 2 (7) of the IGST Act. The location of the supplier should, therefore, be in Odisha in terms of section 2 (15) of the IGST Act. Therefore, We do not agree with the contention of the Applicant that the Location of Supplier is in state of Maharashtra not in Odisha. Accordingly, we hold that the Applicant is required to be registered under Odisha Goods and Services Tax Act, 2017 and Central Goods and Services Tax Act, 2017 in the State of Odisha for the works contract services to be provided to M/s East Coast Railway Odisha vide agreement under discussion. 5.12 The Applicant in support of its stand has cited the decision pronounced by the Authority for Advance Ruling, Karnataka vide order No. KAR ADRG 18/2020 dated 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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