In re Gaurish Sharma (G K Enterprises) (GST AAR Rajasthan)
Applicant is proposing to submit a bid for shifting / erection of electrical lines only to M/s Sadbhav Jodhpur Ring Road Pvt. Ltd who is the main Contractor of NHAI. Thus the activity to be carried out by the applicant is restricted to shifting / erection of electrical lines only as discussed above.
Further, the details mentioned in the Article XI of the agreement as well as description of work mentioned in said letter dated 05.12.2019, specifically indicates the independent nature of work to be carried out by the applicant for which such cost will be borne by the authority or by the owning entity of the respective utility.
Entry number 3(iv)(a) of the Notification No 11/2017-CT (Rate) dated 28.6.2017 allows concessional rate in case of works contract is for construction of road, bridge, tunnel or terminal for road transportation for use by general public. We observe that in the present case the proposed activity carried out by the applicant is of shifting /erection of 11 KV < lines only and the same cannot be categorised as construction of road as classified under Entry number 3(iv)(a) of the Notification No 11/2017-CT (Rate) dated 28.6.2017(as amended).
We further, observe that since such cost of the above said activity will be borne by the Authority or by the entity owning such utility therefore such payment of above mentioned activity is not the part of the main contract i.e. construction of road as awarded to main contractor by NHAI. Thus, there establish no nexus between the main contract awarded for construction of road by the NHAI and the work proposed to be undertaken by the applicant. Therefore, the question of covering the activity under entry number 3(iv)(a) of the Notification No 11/2017-CT (Rate) dated 28.6.2017 does not arises.
In the instant case we observe that the proposed activity carried out by the applicant is of shifting /erection of 11 KV< lines only as already discussed above. We further, observe that the cost of the above said activity will be borne by the Authority or by the entity owning such utility as such payment of above mentioned activity is not the part of the main contract which is evident from the lines “The cost of such shifting shall be borne by the Authority or by the entity owning such utility” written in the Article XI of the main contract (concession agreement) awarded to main contractor by NHAI. Thus, there establish no nexus between the main contract awarded for construction of road by the NHAI and the work proposed to be undertaken by the applicant.
As already discussed above the activity to be undertaken by the applicant cannot be treated as a part of main contract of NHAI thus the applicant who is supposed to execute an independent work cannot be treated as subcontractor of the main contractor.
FULL TEXT OF ORDER OF APPELLATE THE AUTHORITY OF ADVANCE RULING, RAJASTHAN
Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order.
