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TMI Blog2024 (7) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 01/2022 dated 19.01.2022. As per Clause 4 of the said circular, it is clarified that w.e.f 01.01.2022, 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. It is evident that the works contract services supplied to the applicant being a Govt, entity are liable for the taxable rate of 18% w.e.f 01.01.2022. Further, the services rendered by the applicant do not fall under SI. Nos. 3 in column (3) - (iii), (vi) (ix) above, the rate of tax 12% is not applicable in this case and the proper entry to the services provided may be the entry at column (3) (xii), i.e, @ 18 % w.e.f 01.01.2022. - SMT. GAYATHRI P.G., IRS AND SHRI. ABDUL LATHEEF, K, MEMBER Authorized Representative Sri. Goutham, Authorised Representative of the Company. 1. The Kerala Land Development Corporation Limited, No. 28/725, Opposite Ramanilayam, Chembukkavu, Thrissur (herein after referred to as the applicant or Corporation or KLDC) is a fully owned Kerala Government undertaking under the administrative control of the Agriculture Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naged by the Managing Director subject to direction and control of its Board of Directors comprising members of State Government and Central Government. 4.4. State Goods and Services Tax Department has been discontinued the benefit of reduced tax rate of 12% on works contract services supplied to a Governmental authority/ Government entity vide Circular No. 01/2022, dated 19/01/2022 and the rate revised to 18% with effect from 01.01.2022. However, the reduced rate of 12% continues to apply for services provided to the Central Government, State Government, Union territory or a local authority. 4.5. Meanwhile, the Government have unified the GST rates to 18% for works contract services implemented for all institutions Vide GO(P) No. 82/2022/Taxes dated 18/07/2022. Hence the applicant follows such rate of tax from 18/07/2022 onwards. 4.6. In the circumstances, the Government of Kerala have directed to the applicant to take up the procedures for getting a conclusion on the tax rate applicable on contracts undertaken by the Company on behalf of Government of Kerala during the period 01/01/2022 to 17/07/2022. 4.7. The applicant is a Government Entity and acting as a pure agent for all wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.07.2022. The questions on which advance ruling sought by the applicant falls under the purview of section 97 (2) (b) of the CGST/KSGST Act, 2017, applicability of a notification issued under the provisions of this Act , hence admitted. 7.2. The applicant M/s. Kerala Land Development Corporation Ltd. (M/s. KLDC) was incorporated in 1972 under the Companies Act, 1956 as a fully owned Government Undertaking with 4.77% of the shares of the company are in possession with the Central Government and 95.23% of the shares are with the Government of Kerala. M/s. KLDC is established with more than 90% or more participation of the Govt, and falls under the definition of Governmental Entity as the same is established and controlled by the State Government. 7.3. The term Governmental entity is defined in Para 2 (zfa) of Notification No. 12/2017 CT (Rate) dated 28.06.2017, amended vide Notification No. 32/2017-Central Tax (Rate) dated 13th October, 2017, as follows;- ' 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serial number 3, 1) in column (3), in the heading Description of Service , in items (iii),(vi),(ix) and (x), for the words Union territory, a local authority, a Governmental Authority or a Government Entity the words Union territory or a local authority shall be substituted; 2) in column (3), in the heading Description of Service , in item (vii), 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. 7.8. As per the aforementioned amendments, w.e.f. 01.01.2022, the entries in items (iii), (vi), (ix) and (xii) against serial number 3 in the TABLE of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and G.O(P) No. 72/2017/TAXES dated 30.06.2017 in S.R.O. No. 370/2017 read as follows; SI.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition (1) (2) (3) (4) (5) 3 Heading 9954 (Construction services) (iii) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above and serial number 38 below. 9 From the above, it is seen that, w.e.f. 01.01.2022, the rate of tax for services specified under SI. Nos. 3 (iii), 3 (vi) and 3 (ix) will be 12% and for SI. No. 3 (xii), it will be 18%. 7.9. The applicant has sought clarification on the matter that whether GST @12% is applicable for the works executed by them for the period 01.01.2022 to 17.07.2022 as per SGST Cir. No. 01/2022 dated 19.01.2022. As per Clause 4 of the said circular, it is clarified that w.e.f 01.01.2022, 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. It is evident that the works contract services supplied to the applicant being a Govt, entity are liable for the taxable rate of 18% w.e.f 01.01.2022. Further, the services rendered by the applicant do not fall under SI. Nos. 3 in column (3) - (iii), (vi) (ix) above, the rate of tax 12% is not applicable in this case and the proper entry to the services provided may be the entry at column (3) (xii), i.e, @ 18 % w.e.f 01.01.2022. In view of the obse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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