In re Kunal Structure (India) Pvt. Ltd. (GST AAR Gujarat)
The moot issue here is to decide whether the construction service provided by the applicant in the capacity of sub-contractor to the main contractor who were in turn providing services to Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity is eligible for GST @ 12% prior to 25.01.2018 when notification No. 11/2017-Central Tax (Rate), dated 28 June 2017 was amended by Notification No. 01/2018-CT (Rate) dated 25.01.2018.
The entry at Serial No. 3(vi) concerned with works contract services provided by a sub-contractor to the main contractor where the main contractor is providing works contract services to a Government Entity by way of construction, erection, commissioning, installation, completion 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 to the Central Goods and Services Tax Act, 2017.
We find that vide Notification No. 01/2018-CT (Rate) dated 25.01.2018 a new entry no. 3(ix) was inserted in the principal rate notification No. 11/2017-Central Tax (Rate), dated 28 June 2017 vide which “Composite supply of works contract as defined in Clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity” was made taxable @12% . The said amended Notification came into effect from the date of issue of the Notification. Hence the said Notification No. 01/2018-CT (Rate) dated 25.01.2018 was issued on 25.01.2018 and in the opening paragraph of the said Notification the following is mentioned, “In exercise of the powers conferred by sub-section (1) of section 9, subsection (1) of section 11, sub-section (5) of section 15 and sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 11/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 690(E), dated the 28th June, 2017, namely”. Accordingly, the said Notification is also published on the date of Notification in the Gazette of India. Further, an amendment in the Notification is prospective in nature, unless clearly specified to be clarificatory. Also the effective date of a Notification is always date of issue of Notification unless it is specified date of effect of the Notification. The Notification always came into effect from the date it was published in the Gazette of India and the subject Notification was issued in the Gazette of India on 25.01.2018 i.e. on the date it was issued. Therefore, Notification No. 01/2018-ct (Rate) dated 25.01.2018 is applicable/ came into effect prospectively and from the date of issue i.e. from 25.01.2018.
In the case of M/s. Jindal Industries Vs. Union of India reported in 2002(145) ELT 508 (Del) has held that, “Notification to take effect from date of publication in Official Gazette
In view of the above we hold that the GST rate 12% prescribed under Sr. No. (ix) vide Notification No. 01/2018-CT (Rate) dated 25.01.2018 is effective from the date of issue of said Notification i.e. 25.01.2018.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
M/s. Kunal Structure (India) Pvt. Ltd., 15th Floor, B-Wing, Mondeal Heights, Besides Novotel Hotel, S. G. Highway Ahmedabad-380015 is a private limited company registered under the provisions of Companies Act, 1956 and having a GSTIN: 24AACCK7952Q1ZW, has filed an application for Advance Ruling under Section 97 of CGST Act, 2017 and Section 97 of the GGST Act, 2017 in FORM GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act and the GGST Act.
2. M/s. Kunal Structure (India) Pvt. Ltd. entered into a contract for construction of Deendayal Upadhyay Govt. Medical College, Rajkot with M/s. HLL Infra Tech Service (HITES) Ltd. which is a Govt. of India Enterprise. M/s. HITES as the executive Agency of Ministry of Health & Welfare, Govt. of India, New Delhi floated a tender for the said work under the Pradhan Mantri Swasthya Suraksha Yojna, Phase-III (PMSSY-III).
3. The applicant submitted that they were granted the Letter of Award on 08.06.2016. The scope of work included construction of multi storied building including water supply, sanitary and plumbing, comprehensive Fire Fighting/ Protection System, Internal & External Electrification, HVAC works, Lifts, WTP, STP, ETP, CCTV and Security System, Solar Panel, PA System, EPABX/ Communication System, LAN System, site development works such as Internal Road + Path & site levelling, sewer and storm water drainage work etc.
4. The applicant submitted that with the advent of GST with effect from 01.07.2017, the services provided by the applicant are classifiable under heading No. 9954 (Construction service) as per the Scheme of classification of service annexed to the notification No. 11/2017-Central Tax (Rate), dated 28 June 2017. The relevant portion of the Notification is reproduced below :
