In re Shree Construction (GST AAR Telangana)
The rate applicable for the works contract service provided to the Telangana State Tourism Development Corporation Limited by way of construction of building on their land. Whether it is 12% as the Telangana State Tourism Development Corporation Limited is wholly owned by the Government of Telangana or 18% as the Telangana State Tourism Development Corporation Limited is a business entity and collecting fee from its customers.
A. The rate of tax applicable to each contract executed by the applicant in view of the foregoing discussion is abstracted as follows:
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TEALANGANA
[ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND UNDER SECTION 98(4) OF THE TEALANGANA GOODS AND SERVICES TAX ACT, 2017.]
1. M/s. Shree Constructions, 10-60/E, Shasthri Nagar, Near Razvi Chaman, Bommakal, Karimnagar, Telangana – 505 001 (36AJGPD3553L1Z5) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules.
2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.
3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided by nor are pending before any authority under any provisions of the GST Act. The application is therefore, admitted.
4. BRIEF FACTS OF THE CASE:
4.1 Statement of relevant facts as per the applicant having a bearing on the question(s) on which Advance Ruling is required is reproduced below-
The applicant M/s. Shree Constructions are in the business of works contracts wherein they are executing some works on the land provided by the Telangana State Tourism Development Corporation Limited (TSTDCL). The applicant submitted that the TSTDCL is wholly owned by the Government of Telangana and therefore the supply of works contract service to them constitutes a supply to a Government entity. The applicant therefore seeks an advance ruling on the rate of tax applicable to supplies made to such Government entity.
4.2 Company Background:
The applicant M/s Shree Constructions doing works to Telangana State Tourism Development Corporation Limited (TSTDCL) which is a State Government Entity. Telangana State Tourism Development Corporation Limited is a State Govt company, incorporated on 28 Aug, 2014 under the Companies Act. It’s a public unlisted company and is classified as ‘company limited by shares’.
5. QUESTIONS RAISED:
Q1. The rate applicable for the works contract service provided to the Telangana State Tourism Development Corporation Limited by way of construction of building on their land. Whether it is 12% as the Telangana State Tourism Development Corporation Limited is wholly owned by the Government of Telangana or 18% as the Telangana State Tourism Development Corporation Limited is a business entity and collecting fee from its customers.
6. APPLICANT’S INTERPRETATION OF THE LAW
It was stated that an advance ruling already pronounced by the AAR of similar business it was declared that the service provider has to collect GST@ 18% from the service receiver.
7. PERSONAL HEARING:
The Authorized representatives of the unit namely Sri. D Ramesh Kumar, CA & Authorized Representative attended the personal hearing held on 27.09.2022. The authorized representatives reiterated their averments in the application submitted and requested to dispose the case on merit basis.
8. DISCUSSION & FINDINGS:
The applicant received purchase orders from Telangana State Tourism Development Corporation Limited for executing (4) construction contracts which are abstracted as follows:
