In re Shreejikrupa Project Limited (GST AAR Chhattisgarh)
Applicability of GST rate of 12% on receipt of contract for new construction of CBD railway station, platform, parking, building and all other civil construction within the boundary of station as per entry no.3 (V) of Notification No.11/2017 – Central tax (Rate) dated .28.06.2017.
Here in the impugned case the applicant has been awarded the work of construction of CBD Railway station, commercial complex, boundary etc. at Nava Raipur (C.G) by Nava Raipur Atal Nagar Vikas Pradhikaran [NRANVP] and not by any Railway. Besides this the work allotted and undertaken by the applicant is not for construction of any work related to construction of railway lines or construction of track work relating to any rail project or for that matter any private railway siding.
Construction of complexes, railway station and commercial buildings on land belonging to NRANVP on purely commercial basis can in no way be treated as “pertaining to railways” or works constructed for the purpose of, or in connection with, railway. What NRANVP has awarded the applicant is the work of construction of commercial building / complexes/ station/ boundary etc. on the land owned by NRANVP which by no reasoning can be attributable as being “pertaining to railways”, it not being related to Government railway or non-Government railway. Besides this, on perusal of the copy of drawings of the said project furnished by the applicant we find that at the site where the construction is being undertaken, the applicant appears to have been awarded the construction work of commercial buildings and other business complexes as well, which by no stretch of imagination can be treated as “pertaining to railways” or works constructed–. for the purpose of, or in connection with, railway. Any construction project directly related to railways such as railway line / track, railway siding etc. where railway is involved would be attributable as being “pertaining to Railway”, which incidentally is not the case here. In the instant construction project being undertaken by the applicant there is neither any involvement of “Government railway” nor any “non-Government railway”. Just because construction of a CBD Railway station including commercial complexes/buildings is being undertaken by the applicant, on purely commercial consideration on the basis of a “letter of acceptance cum work order” issued by Chief Executive Officer, Nava Raipur Atai Nagar Vikas Pradhikaran, Raipur does not entitle the work as being categorized as a construction project “pertaining to railways” or for that matter works constructed for the purpose of, or in connection with, railway.
A self-governed, stand-alone construction work of commercial complexes/buildings with in the boundary, station, parking area, roads, pavements, footpath, offices, foot over bridge, boundary as brought about by the applicant in their application, on land owned and belonging to Nava Raipur Atal Nagar Vikas Pradhikaran [NRANVP] on the basis of a “letter of acceptance cum work order” issued by the Chief Executive Officer, Nava Raipur Atal Nagar Vikas Pradhikaran and a tripartite agreement dated 25.4.2022 [between the applicant as the contractor, NRANVP as the agency and Nava Raipur Atal Nagar Smart City Corporation Limited (NRANSCCL) being the employer] for the execution of the said construction, can in no way be held as pertaining to railways or works constructed for the purpose of, or in connection with, railway.
For the said work of construction undertaken by the applicant till 17.7.2022,the applicability of Sl. no. 3(v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is subject to the fact that the works undertaken by them are “Composite supply” as defined under Section 2 (30) of the CGST Act, 2017 and on getting established that there is transfer of properly in goods (whether as goods or in some other form) involved in the execution of such contract for it being “works contract” as stipulated under Section 2 (119) of the Central Goods and Service Tax Act, 2017, which as discussed has been found not to have been adhered by the applicant. In addition to above, as the said construction work undertaken by the applicant has been found not pertaining to railways, the same attracts GST @ 18% [9% CGST + 9% CGST) under the residual entry at Sr. no. 3(xii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, as amended.
Further, with effect from 18.7.2022, as the exemption claimed by the applicant under Sr. no. 3(v)(a) ibid stands omitted, in view of the amendments made in Notification no. 11/2017 Central Tax (Rate) dated 28.06.2017 vide Notification no. 03/2022 dated 1391 July 2022, the construction services undertaken by the applicant would accordingly attract GST @ 18% [9% CGST + 9% CGGST] under the residual entry no. Sr. no. 3(xii) of Notification no. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended supra on 13.7.2022.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, CHHATTISGARH
M/s Shreejikrupa Project Limited, H.No. 289, Behind C.S.E.B Office, Sunder Nagar, Raipur 492001, Chhattisgarh GSTIN- 22AALCS6689K1ZN. hereinafter also referred to as the applicant] has furnished application in Form ARA-01 dated 23.6.2022 U/s 97 of the Chhattisgarh Goods & Services Tax Act, 2017 seeking advance ruling regarding applicability of GST Rate of 12% on receipt of contract for new construction of CBD railway station, platform, parking, building and all other civil constructions within the boundary of the station, as per Entry No.3(v) of Notification No.11/2017- Central Tax (Rate) Dated 28 June 2017.
M/s Shreejikrupa Project Limited is a company registered under The Companies Act, 2013 and is involved in construction of building and civil works (herein after called the Company). The company has a GST registration in the state of Chhattisgarh.
2.2 The company applied for a Tender for construction of CBD Railway Station in Sector 22, Naya Raipur, Chhattisgarh. The company was awarded the tender as per the prescribed rules by Nava Raipur Atal Nagar VikasPradhikaran (hereinafter called NRANVP).
2.3 There is a tripartite agreement vide No 03/CBD-Rly-Stn/CE/SE-II/NRANVP/2022-23 dated 25 April 2022 between the Company as the contractor, NRANVP as the agency and employer being Nava Raipur Atal Nagar Smart City Corporation Limited (hereinafter called NRANSCCL) for the execution of the construction of the ‘Railway Station.The railway station will be used for the connectivity of Naya Raipur with rest of India and will be called CBD Railway Station, as per the official website of Nava Raipur Atal Nagar. The copy of tripartite agreement was enclosed.
2.4 With reference to the tender document and drawings following civil construction, erection, commission and installation of original works are to be completed by the Company, which can be summarised as below:
