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TMI Blog2024 (3) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... recipient of service i.e, the awarder M/s. Kerala State Film Development Corporation Ltd falls within the definition of 'Governmental Authority' in Para 2 (zf) or 'Government Entity* in Para 2 (zfa) of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- The works contract services performed by the applicant as per the above-mentioned contracts awarded by M/s. Kerala State Film Development Corporation, a Governmental Authority to construct Sree Narayana Guru Cultural Complex at Kollam is in the nature of construction of a structure meant predominantly for use as a cultural establishment and hence the same is liable to GST at the rate of 12% [6% CGST+6% SGST ] as per entry at SI No. 3 (vi)(b) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended from time to time. If the time of supply of the works contract services as determined in accordance with Section 14 of the CGST Act, 2017 falls on any date prior to 01.01.2022, the aforementioned service will be taxable at the rate of 12% and if the time of supply falls on any date on or after 01.01.2022, the said service will be taxable at the rate of 18%. - DR. S. L. SREEPARVATHY, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se other than for commerce, industry, or any other business or profession will attract @ 12% GST. A similar Notification was also issued in Integrated Tax (Rate) as per No. 08/2017, dated 28.06.2017. 4.4. Finally, the applicant concluded that the work awarded as per the said agreement falls under the ambit of the above Notification beyond any doubt or controversy, and therefore they are eligible to remit tax at 12%. 5. Comments of the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per provisions of section 98 (1) of the CGST Act. The Jurisdictional officer has not submitted any remarks and hence it is presumed that the jurisdictional officer has no specific comments to offer. It is also construed that no proceedings are pending on the issue against the applicant. 6. Personal Hearing: The applicant was granted opportunity for personal hearing on 19.04.2023. Shri. Praveen Kumar.U, Senior Manager (Accounts) represented the applicant for personal hearing, which was conducted virtually. The representative reiterated the contentions made in the application and requested to issue the ruling on the basis of the submissions made in the application. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the applicant, in which as per definition 2.2, it is stated that the contractor shall carry out and complete the work under the contract in every respect and his work shall include the supply of all labour, equipment, materials, plant and machinery, tools, transportation, form work, scaffolding and everything else necessary for the proper execution and completion of the work in accordance with the contract document and to the satisfaction of the Engineer in charge. 7.5. In order to decide the issue, it is to be examined whether the services rendered by the applicant qualify to be classified as works contract services. Section 2(119) of the CGST Act, 2017 defines that works contract is a contract for building construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. From this definition it reveals that the term works contract under GST has been restricted to any work undertaken for an Immovable Property wherein transfer of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation- For the purposes of this item, the term 'business' shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities. 7.10. The next issue to be considered is whether the recipient of service i.e, the awarder M/s. Kerala State Film Development Corporation Ltd falls within the definition of 'Governmental Authority' in Para 2 (zf) or 'Government Entity* in Para 2 (zfa) of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017. 7.11. The term Governmental authority is defined in Para 2 (zf) of Notification No. 12/2017 CT (Rate) dated 28.06.2017 as follows; (zf) 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 90 per cent or more participation by way of equity or control, to carry out any Junction entrusted to a Municipality under article 243W of the Constitution or to a Panchayat under article 243G of the Constitution. 7.12. Article 243G of the Constitution reads as follows; 243G. Powers authority and responsibilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the cultural activities such as providing studio services for production of film and documentaries, exhibiting cinematograph films through their own movie theatres, conducting film festivals etc. The said establishment is fully under the control of the Government of Kerala by nominating and appointing the Chairman, the Managing Director and the members of the board of directors including permanent members Secretary to Government of the Cultural Affairs Department and Finance Department. Hence the recipient of service M/s. Kerala State Film Development Corporation Ltd squarely falls under the definition of Governmental Authority as the same is fully controlled by the State Government and established for the purpose listed under SI. No. 21 of the Eleventh Schedule of the Constitution. 7.15. Accordingly, the works contract services performed by the applicant as per the above-mentioned contracts awarded by M/s. Kerala State Film Development Corporation, a Governmental Authority to construct Sree Narayana Guru Cultural Complex at Kollam is in the nature of construction of a structure meant predominantly for use as a cultural establishment and hence the same is liable to GST at the rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 rate 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. 7.19. Thus, we conclude that if the time of supply of the works contract services as determined in accordance with Section 14 of the CGST Act, 2017 falls on any date prior to 01.01.2022, the aforementioned service wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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