In re AKM Balaji JV (GST AAR Chhattisgarh)
GST Rate applicable on works contract services provided to RITES ltd. Under letter of acceptance dated 20-12-2019 for works contract services in relation to works contract for renewal / renovation and other improvements for railway track from karonji station to bhatgaon railway siding at bhatgaon area of SECL?
The activities described in the said letter of acceptance dated 20.12.2019, referred to by the applicant for Works Contract Service in relation to works contract for renewal/renovation and other improvements for railway track from Karonji Station to Bhatgaon Railway Siding at Bhatgaon Area of SECL for renewal / renovation would attract GST at the rate of 9% CGST + 9% SGST.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, CHHATTISGARH
[U/s 98 of the Chhattisgarh Goods & Services Tax Act, 2017 (herein- after referred to as CGGST Act, 2017)]
No. STC/AAR/13/2020
Raipur Dated 25/11/2020
M/s AKM BALAJI JV, HIG-02, M.P. Nagar, Korba Chhattisgarh [hereinafter also referred to as the applicant] has filed an application U/s 97 of the Chhattisgarh Goods & Services Tax Act, 2017 seeking advance ruling on
(a) GST Rate applicable on Works Contract Services Provided to RITES Ltd, under letter of acceptance dated 20/12/2019 for Works Contract Service in relation to works contract for renewal/renovation and other improvements for railway track from Karonji Station to Bhatgaon Railway Siding at Bhatgaon Area of SECL.
2. Facts of the case:-
2.1 AKM-Balaji JV is a joint Venture firm, registered vide GSTIN 22AAKAA0849G1Z1.
2.2 They have submitted that they are engaged in providing works contracts services to its client M/s. RITES Limited vide letter of acceptance dated 20/12/2019.
2.3 Under the said contract the applicant has submitted that they are providing works contract services by way of repairing/renovation and other improvements works including supply of P. Way Fittings& Track Ballast, PSC & Steel Channel Sleepers, Points & Crossings (Excluding supply of rails), Construction of Retaining Wall, drain etc. for railway Track from Karcnji Station to Bhatgaon Railway Siding at Bhatgaon Area of SECL.
2.4 The total value of Contract awarded by M/s. RITES Ltd. was for an amount of Rs. 23,99,29,974.00 Copy of Contract is enclosed herewith as Annexure A.
3 Contentions of the Applicant:- The applicant’s contention is as under :-
3.1 Service Provided shall be termed as “Woks Contract” under Section 2(119) of The Central Goods & Service Tax Act, 2017 which reads as under –
“works contract” means 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;”
3.2 Further the said services provided by them shall be classified under HSN 995429 under Annexure to Notification 11 Central Tax (Rate) dated 28/06/2017 which is read as under –
“Services involving repair, . alterations, additions, replacements, renovation, maintenance or remodeling .of the constructions covered above.”
3.3 Further, that the said services provided by them shall fall under residual entry under i.e., entry no.3 (xii) of Notification 11 Central Tax (Rate) dated 28/06/2017 (as amended till date) and the rate of CGST shall be 9%. Thus rate of SGST shall also be 9%.
3.4 However M/s. RITES Ltd. sought to classify said services under entry no.3 (v) of Notification 11 Central Tax (Rate) dated 28/06/2017 (as amended till date) and the rate of CGST shall be 6%. Thus rate of SGST shall also be 6%.
3.5 Through this application the applicant sought ruling as regards the rate at which GST has to be charged for the said works contract services provided by them.
4. Personal Hearing:-
Keeping with the established principles of natural justice, personal hearing in the matter through virtual mode was extended to the applicant and accordingly their authorized representative Shri Priyesh Agrawal, C.A. appeared before the authority online for hearing on 22/10/2020 and reiterated their contention.
5. The legal position, Analysis and Discussion:-
5.1 At the very outset, we would like to make it clear that the provisions for implementing the CGST Act and the Chhattisgarh GST Act, 2017 [hereinafter referred to as “the CGST Act and the CGGST Act”) are similar and thus, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the CGGST Act, 2017. Now we sequentially proceed to discuss the issues involved in the ruling so sought by the applicant and the law as applicable in the present case.
5.2 The applicant sought advance ruling regarding the applicable rate at which GST has to be charged for the said work of renewal/renovation and other improvements for railway track from Karonji Station to Bhatgaon Railway Siding at Bhatgaon Area of SECL which has been informed by them to be a works contract service. The issues involved could be discussed as under:-
5.2.1:- The rate of GST for Works Contract service has been prescribed under serial number 3 of Notification 11 Central Tax (Rate) dated 28/06/2017 , which reads as under:-
Notification No. 11/2017-Central Tax (Rate)
New Delhi, the 28th June,
In exercise of the powers conferred by sub-section (1) of section 9, sub- section (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 notifies that the central tax, on the intra-State supply of services of description as specified in column (3) of the Table below, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2), shall be levied at the rate as specified in the corresponding entry in column (4), subject to the conditions as specified in the corresponding entry in column (5) of the said Table:-
Table
