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TMI Blog2023 (11) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... works contract - Therefore in sum and substance the exemption extended to a works contractor supplying the works contract services to Government or local bodies is not extendable to a taxable person who is supplying services to such works contractor in absence of any entry or notification under Sec11 (1) of the CGST Act. - SRI S.V. KASI VISWESWARA RAO, AND SRI SAHIL INAMDAR, MEMBER [ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND UNDER SECTION 98(4) OF THE TEALANGANA GOODS AND SERVICES TAX ACT, 2017.] ****** 1. M/s. Immense Construction Company, Plot No.105, Sunrise Homes Colony, Upperpally, Rajender Nagar, Ranga Reddy, Telangana - 500048 (36ADZPG2112K1ZD) has filed an application in FORM 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 GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngana. 4.7 In the Contract so executed by the Principal Contractor, total value of supply of Goods constitutes not more than 25% of the Sub- Contracted value (as can be verified from the Contract so awarded) and therefore exempted from payment of GST in terms of entry 3A in Notification No 12/2017 - Central Tax (Rate) as amended by Notification No. 2/2018 Central Tax (Rate) dated 25/01/2018; and 4.8 Further, the Sub Contract so executed between the Applicant and the Principal Contractor, is only for supply of Man Power which is Pure Service and hence exempted from payment of GST in terms of Entry 3 in Notification No 12/2017 - Central Tax (Rate) as amended by Notification No. 2/2018 - Central Tax (Rate) dated 25/01/2018. 4.9 The Applicant presented its Interpretation of Law for each of the above questions, here under. a) That services provided by the Applicants are Pure Services; b) That these services are ultimately provided to the State Government of Telangana; c) That these services are in relation a function entrusted to a Municipality under Article 243W of the Constitution (the present work falls under Serial No. 5 of 12th Schedule being water supply for domestic purpose); d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such Supplies; and c. In case if the supplies as per Question (a) are not covered by the Notification supra then what is the applicable rate of tax on such supplies under the Goods and Services Tax Act, 2017. 6. PERSONAL HEARING: The authorized representatives reiterated their averments in the application submitted and averred as follows: 1. That, they are sub-contractors to Indian Hume Pipe Company Limited who are executing contract to Panchayat Raj Department for Mission Bhagiratha for Operation Maintenance of pipelines. That this contract does not involve transfer of property in goods more than 25% and therefore that they are governed by the Telangana Government Memo No. A2/TDWSCL/Payments/ Workshop/2017-18, Dt: 05-08-2020, wherein it is clearly held that The O M Contracts where pure services are involved or composite works contract having Goods component not more that 25% will fall under NIL rated services. In case of supply of works contract services where the goods component is more than 25% will fall under 12% rate. This memo follows the Notification No.2 of 2018 dt: 25-01-2018, wherein the new entry 3A for chapter 99 stipulate that such contract are taxed at NIL rate. 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o inturn is making supplies under entry 3A of Notification 12/2017 as amended above. The Hon ble Apex Court of India in the case of Hemraj Gordhandas Vs H.H. Dave AIR 1970 SC 755 held that exemption notification cannot be given an extended meaning in order to enlarge the scope of exemption granted by the notification. The Hon ble Apex Court in the case of CCE Vs Ginni Flaments 2005 (181) ELT has held that exemption notification has to be read strictly so far as the eligibility is concerned and the conditions stipulated there in cannot be ignored. It is also seen that in Notification 1/2018-Central Tax (Rate), Dt. 25-01-2018, which is an amendment to Notification 11/2017, the Government intends to bring the rates of main contractor and sub-contractor at par while they are providing their services to Central Government, State Government, or Local Authority under entry. Thus against Serial no. 3 in Col. 3 for item (ix) and (x) the sub-contractors are included in the entry for claiming lower rate of tax provided that their services have been procured by the main contractor in relation to a work interested to it by the Central Government, State Government, Union Territory, or Local Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be applied. One can look fairly at the language used' . This principle applied in catena of case laws by the Hon ble Apex Court which includes, Baidyanath Ayurved Bhavan v. Excise Commissioner - (1971) 2 SCR 590 AIR 1971 SC 378 (1971) 1 SCC 4=110 ELT 363 (SC 3 member bench) ShrimatiTarulataSyam v. CIT AIR 1977 SC 1802 (1977) 3 SCC 305 = 108 ITR 345 (SC) Federation of Andhra Pradesh Chambers v. State of Andhra Pradesh 2000(6) SCC 550-AIR 2000 SC 2905 -247 ITR 36-115 Taxman 143 (SC 3 member bench) CIT v. Shahzada Nand-AIR 1966 SC 1342 (1966) 60 ITR 392 (SC) CCEv. Kisan Sahakari Chinni Mills 2001 (132) ELT 523=125 STC 432 (2001) 6 SCC 697 (SC) Eureka Forbes v. State of Bihar (2011) 7 GST 1 (SC) MahimPatram P Ltd. TUOI (2007) 7 STT 136 (2007) 3 SCC 668 7 STR 110=6 VST 248 (SC) State of Rajasthan v. Khandaka Jain AIR 2008 SC 509 Ajmera Housing Corpnv. CIT (2010) 8 SCC 739-193 Taxman 193=326 ITR 642 (SC) CCE 1.Doaba Steel Rolling Mills (2010) 14 SCC 751-269 ELT 298 (SC) Ranbaxy Laboratories Ltd. v. UOI(2011) 10 SCC 292-33 STT 326-15 taxmann.com 95-273 ELT 3 (SC) CIT v. Calcutta Knitwears (2014) 6 SCC 444 = 223 Taxman 115 43 taxmann.com 446-362 ITR 673 (SC) PradipNath Gala STO (2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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