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TMI Blog2023 (12) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... all by the applicant at Bapu Nagar Residential Scheme, Kota, in accordance of works contract allotted by UIT Kota, is a taxable service under GST law and if yes, then determination of the liability to pay tax after applicable exemption and deductions? - HELD THAT:- The applicant is liable to pay GST on supply of this services and there no exemption and deduction is available to applicant in respect of aforesaid service provided to UIT Kota. If no, then whether the paid tax shall be refunded to the assessee along with appropriate interest? - HELD THAT:- This question need not be answered. Applicability of change in tax rate during continuing of a works contract, where the works contract has pre-fixed terms and conditions including total tender rate - HELD THAT:- The benefit of the reduced tax rate, i.e., 12% instead of 18% on works contract supplied to a Governmental Authority or a Government Entity regarding the works contract services mentioned in the corresponding entry, stands discontinued with effect from 01.01.2022. The revised rate applicable for the said supply is 18%. The revised rate is applicable from the 01st day of January, 2022. In case, where the time of supply of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (in Brief) The applicant submitted his interpretation which is under- 1. That the applicant was a successful bidder for construction of a Community Hall at Bapu Nagar Residential Scheme (Beed ke Balaji), Kota. The tender was allotted to the applicant by the Urban Improvement Trust (UIT), Kota (hereinafter referred as UIT). 2. That as per the terms of the works contract dated 01.06.2022 issued by UIT, the period of work is from 11.06.2022 to 10.12.2022 for a consideration of Rs. 3,65,97,837/- at 12.69% increased rate. The copy of works order is annexed herewith and marked as Annexure - 2. 3. That during the aforesaid period of works order i.e. 11.06.2022 to 10.12.2022, the rate of tax liability under GST law i.e. Central GST Act, 2017 were amended, resultantly, the GST rate applicable on the applicant were significantly increased. 4. That due to sudden increase in the GST rate during a continuing works contract on a pre-fixed terms and conditions and absence of any effective clarification from the CGST Department or any other body of the Government, the applicant and similarly placed numerous assessees are in jeopardy and seek resolution from your esteemed authority of the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory under the aforesaid described special circumstances. 2.3. That in regard of the above stated facts and circumstances, the liability of applicant under the GST law ought to be ascertained by your esteemed authority. 3. If no, then whether the paid tax shall be refunded to the assessee along with appropriate interest 3.1. That if your esteemed authority decides the Issue No. 2, the work order dated 01.06.2022 allotted by UIT Kota shall be liable for exemption or deduction under the applicable law for GST, then the tax deposited by the applicant shall be refunded to the applicant at the reasonable time period by the government along with the appropriate interest rare. 4. Applicability of change in tax rate during continuing of a works contract, where the works contract has pre-fixed terms and conditions including total tender rate. 4.1. That as per present facts, the UIT Kota allotted works contract to the applicant for construction of Community Hall vide works order dated 01.06.2022. The work was started by the applicant on 11.06.2022. It is essential to highlight here that works contract was allotted for a pre-fixed rate of Rs. 3,65,97,837/-. Therefore, the applicable rate of GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horized Representatives appeared for personal hearing. He reiterated the submission already made in written submission. He also stated for additional written submission, along with Additional Documents on behalf of the Applicant WRITTEN SUBMISSION ALONG WITH ADDITIONAL DOCUMENTS ON BEHALF OF THE APPLICANT The humble applicant named hereinabove submits this written submission along with the additional documents as hereunder:- 1. That the contents of present written submissions and application under Rule 104(1) in Form GST ARA 01 may kindly be read as part and parcel and the same has not been repeated herein for the sake of brevity. 2. That the applicant being a licensed contractor, was a successful bidder for the tender of construction of a Community Hall and Sports Complex at Bapu Nagar Residential Scheme, Kota, allotted by the Urban Improvement Trust, Kota. 3. It is imperative to submit herein that the Urban Improvement Trust is a 'Government'/'local authority' being a 'trust' established by the State Government of Rajasthan under Section 8 of Rajasthan Urban Improvement Act, 1959. 8. Establishment and incorporation of Trusts. (1) The State Government may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'State Government Department' in reference to the Rajasthan Urban Improvement Trust Act, 1959. The Hon'ble Court observed that the functions required to be discharged by the Improvement Trust are indeed public functions and provided that the provisions of the 1959 Act leave no doubt that the Improvement Trust, created under the aforesaid Act, works as an agent or instrumentality of the State Government and as such the Trust must be considered as a 'State Government department', the Hon'ble High Court further held that:- 17. We have, from a consideration of the various provisions of the Act of 1959, come to the conclusion that there is an all pervading control of the State Government in the affairs of the Trust. Not only the funds of the Trust are provided partly by the State Government, the money of the Trust has to be kept in the Government treasury or sub-treasury or the bank to which government treasury business has been made over. Further the State Government exercises effective control in respect of the strength and service of the Trust. The nazul lands have been placed at the disposal of the Trust for improvement, control and supervision, but, however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 8.3 As per notification No. 11/2017-Central Excise (Rate) dated 28.06.2017 as amended vide notification No. 24/2017-Central tax (rate) dated 21.09.2017 and further amended vide notification no. 31/2017-Central Tax (Rate) dt 13.10.2017. Central tax at the rate of 6% is applicable on the following. In the said notification, in the Table, as per serial number 3 for item (vi) in column (3) and the entries relating thereto, (vi) Services provided to the Central Government, State Government, Union Territory, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of- (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017. 8.4 IDA established vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot leviable on the service provided to the Government authority or local authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession and thereby exempted. 6. That it is established in the foregoing paras that the applicant is not liable to pay GST on the services provided to the Urban Improvement Trust, however in accordance with the work contract the applicant is liable to pay and has been duly paid the leviable taxes and duties in respect of the materials procured by the applicant for the use in work contract It is humbly submitted that other than taxes on materials, no other tax liability is applicable on the applicants. The Ld. CESTAT, Ahmedabad in Ample Construction Company vs. Commissioner of Central Excise ST, Rajkot Service Tax Appeal No. 12006 of 2014-DB dated 24.07.2023 considered and observed catena of decisions wherein it was decided that the services were in no way provided for commercial or industrial activities, therefore the same would f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Annexure-6. Therefore, if the applicant has paid any tax (towards the GST or SGST) may be refunded as per the applicable rate of interest as the judgments. The copy of judgment dated 17.4.2023 M/s. Surana and Company Vs. UOI and M/s. D.A. Enterprises Vs. State of Chhattisgarh are enclosed herewith and marked as Annexure-7 and 8 respectively. 8. That the tender allotted to the applicant was on the basis of fixed amount of consideration, therefore, even though the services rendered by the applicant is exempted, the question before the Ld. Authority for Advance Ruling is raised for consideration, whether the amended rate of tax on fixed/ pre-fixed agreement/tenders would be retrospectively applicable? 9. That it is contended by the applicant that the retrospective application of amended GST rate or other taxes is unlawful, unconstitutional and severely violates Article 20 of the Constitution of India which bars the ex-post facto application of laws. The Hon'ble High Court of Calcutta in Larsen Toubro Ltd. vs. Assistant Commissioner of Service Tax Ors. 2016 SCC Online Cal 3865 deduced that the amended rate would be applicable prospectively and shall not affect the pending work co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 11/2017 Dated 28.06.2017-Central Tax(Rate), UIT falls under the Category Government Entity as per definition given in the Notification Government Entity an authority or a board or any other body including a society, trust, corporation,- i) Set up by an Act of Parliament or State Legislature; or ii) Established by any government. With 90% or more participation by way of equity or control, to carry out a function entrusted by the Central Government, state Government, Union Territory or a local authority. As UIT is established by Govt of Rajasthan (State Legislature) in 1970 under The Rajasthan Urban Improvement Act 1959 and it is established by Govt, of Rajasthan with 90% or more participation by way of equity or control to carry out a function entrusted by the State Government. Hence falls under the category of Government Entity and it doesn't fall under the category of Governmental Authority or Local Authority or Government . 2. Whether constructing a Community Hall by the applicant at Bapu Nagar Residential Scheme, Kota, in accordance of works contract allotted by UIT Kota, is a taxable service under GST law and if yes, then determination of the liability to pay tax aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esidential Scheme, Kota, in accordance of works contract allotted by UIT Kota, is a taxable service under GST law and if yes, then determination of the liability to pay tax after applicable exemption and deductions, or (iii) If no, then whether the paid tax shall be refunded to the assessee along with appropriate interest. (iv) Applicability of change in tax rate during continuing of a works contract, where the works contract has pre-fixed terms and conditions including total tender rate. We observe that applicant has not specified that under which Notification or its entry applicant is seeking ruling. However, being in common nature we would like to evaluate ruling under Mega Notification No. - 11/2017 - CT (Rate) dated 28.06.2017 as amended. 3) We also observe that applicant have not submitted the constitution and other details of UIT Kota, but UIT Kota is a body corporate Trust which is established by the Government in the year 1970 to achieve its objectives, under Rajasthan Urban Improvement Act 1959. It is responsible for overall development of Kota City, so we would like to attend questions for ruling. 3.1) As per Rajasthan Urban Improvement Act 1959 - 8. Establishment and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as District Collector with a secretary as executive officer. It consists govt, officials nominated public persons as trustees. Its motto to design Urban Pattern* Plan the Future of the City* Improve the existing situation in planned manner* Utilize the urban land in the best manner* Acquire the land for urban development * Plan residential and commercial schemes etc. 4) Now we would like to refer various provisions under the Act. 4.1) The Section 2(53) of the Central Goods and service Tax Act 2017 had defined the government Government means the Central Government; And sub-section 2(53) of the Rajasthan Goods and service Tax Act, 2017 provided that Government means the Government of Rajasthan; As per clause (23) of section 3 of the General Clauses Act, 1897 the 'Government' includes both the Central Government and any State Government. As per clause (8) of section 3 of the said Act, the 'Central Government', in relation to anything done or to be done after the commencement of the Constitution, means the President. As per Article 53 of the Constitution, the executive power of the Union shall be vested in the President and shall be exercised by him either direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entrusted by the Government with the control or management of a municipal or local fund. 4.3) Government Entity and Governmental Authority are defined by the Notification No. - 11/2017 - CT (Rate) dated 28.06.2017 as amended vide notification No. 31/2017 - Central Tax (Rate) dated 13.10.2017 as under- Governmental Authority means an authority or a board or any other body, -are as under- (ix) Governmental Authority means an authority or a board or any other body, - (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90per cent, or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution, (x) Government Entity means an authority or a board or any other body including a society, trust, corporation, i) set up by an Act of Parliament or State Legislature; or ii) established by any Government, with 90 per cent, or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority. 5. We held that UIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), for the words Union territory, local authority, a Governmental Authority or a Government Entity the words Union territory or a local authority shall be substituted; 3) in column (5), in the heading Condition , the entries against items (iii),(vi),(vii),(ix) and (x), shall be omitted. 2. This notification shall come into force with effect from the 1st day of January, 2022. Hence it light of above, we held that applicant is liable to pay GST on supply of this services and there no exemption and deduction is available to applicant in respect of aforesaid service provided to UIT Kota. 5.1 We don't think any refund arise against tax paid on taxable service. Applicability of change in tax rate during continuing of a works contract, where the works contract has pre-fixed terms and conditions including total tender rate. 5.3 The applicant next question is about the applicability of change in tax rate during continuing of a works contract, where the works contract has pre-fixed terms and conditions including total tender rate. We find from the contract letter under which conditions mentioned by UIT Kota in respect of supply of subject service that the work was to be started on 11.06. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt; (b) in case the goods or services or both have been supplied after the change in rate of tax,- (i) where the payment is received after the change in rate of tax but the invoice has been issued prior to the change in rate of tax, the time of supply shall be the date of receipt of payment; or (ii) where the invoice has been issued and payment is received before the change in rate of tax, the time of supply shall be the date of receipt of payment or date of issue of invoice, whichever is earlier; or (iii) where the invoice has been issued after the change in rate of tax but the payment is received before the change in rate of tax, the time of supply shall be the date of Issue of invoice: Provided that the date of receipt of payment shall be the date of credit in the bank account if such credit in the bank account is after four working days from the date of change in the rote of tax. Explanation .- For the purposes of this section, the date of receipt of payment shall be the date on which the payment is entered in the books of account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier. In light of above provisions of Act and Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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