In re Agrawal Buildcon (GST AAR Chhattisgarh)
i. The benefit of entry at Sl.no. 3(v)(a) of Notification No. 11/2017 Central Tax(Rate) dated 28.06.2017 as amended, vide Notification 01/2018 Central Tax(Rate) dated 25.01.2018 and various other amendments from time to time, lastly amended vide Notification no. 22/2021-Central Tax (Rate) dated 31.12.2021 would be eligible to M/s Agrawal Buildcon, C/o Agrawal Traders, Main Road, Korba, Chhattisgarh, 495677 (GSTIN-22ASSPA1067D1Z7), the applicant, provided that the works undertaken by them qualifies as “Composite supply” as stipulated under Section 2 (30) of CGST Act, 2017 as also the said work undertaken satisfies the condition of being ‘Works Contract’ as per Section 2 (119) of the Act, and if so the applicable rate of GST would be @ 12% effective from 25.01.2018. In cases other than above the said work would attract GST @ 18% under the residual entry at Sr. no. 3(xii) of Notification No. 11/2017 Central Tax iRate) dated 28.06.2017 as amended. This authority on the basis of records furnished and available on record, is not in a position to conclusively hold that the works, as is forthcoming from the “letter of acceptance” issued by RITES LIMITED supra, intended to be undertaken by the applicant qualifies being treated as ‘Composite supply’ as per Section 2 (30) of CGST Act, 2017 or are ‘Works Contract’ as defined under Section 2 (119) of CGST Act, 2017, as discussed herein above.
ii. There is no change in the rate of GST with effect from 1.1.2022 on such composite supply of works contracts as defined in Section 2(119) of the Central Goods and Services Tax Act, 2017 supplied by way of construction, erection, commissioning, or installation of original works pertaining to railways.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, CHHATTISGARH
M/s Agrawal Buildcon, C/o Agrawal Traders, Main Road, Korba, Chhattisgarh, 495677 (here in after referred to as the applicant) GSTIN-22ASSPA1067D1Z7 has filed an application U/s 97 of the Chhattisgarh Goods & Services Tax Act, 2017 dated 02/02/2022 enclosing duly filled in Form ARA-Ol (the application form for Advance Ruling) along with certain annexure and attachments seeking advance ruling as to-What should be the rate of tax on their work, will it be 12% or 18%? What is the current tax rate of tax on their work, Is there any change on rote of Tax since 1.1.2022 or till date.
2. Facts of the case: –
2.1 As forthcoming from the above ARA-01 filed by the. applicant, the applicant mainly deal with construction work and ii has further been their submission that a firm / party had received a work order from RITES Ltd., and that the applicant too wishes to participate in the same kind of work. Accordingly, they have filed the instant ARA-01, in order to have a clear view about the lax rate of the civil works for the construction of Kusmunda S&T work and other TMS & Crew rest room at various five locations within 2.8Km length of siding area in connection with construction of rail infrastructure for providing Railways siding at SECL Kusmunda Project, District Korba, Chhattisgarh for dispatch of washed and raw coal. The applicant also enclosed a copy of the said Letter of Acceptance pertaining to the third party /firm referred to above.
3. Contentions of the applicant: –
3.1 The applicant has further informed that the work order for above project is from RITES Ltd. (A Government of India Enterprise, Ministry of Railway – An ISO 9001 Company) and is provided to the said firm/ party on behalf of SECL Kusmunda Project acting as principal employer and invoice is generated in GST no. of SECL by the working party (firm).
3.2 It has further been submitted by the applicant that as the aforesaid firm /party has received this work from SECL Kusmunda project, the liability of builty and payment is of SECL and that according to SECL, such works comes under 12% tax slab, whereas the said firm / party has sent bill for 18% to SECL, but SECL has refused to accept the same. The applicant’s contention in the matter is that the said work should come under 18% tax slab as per CBEC guidelines. The applicant has further informed that this has led to confusion between the said party and SECL. Further that as SECL is demanding for bill with 12% tax rate as per the protocols of SECL, to avoid any future liability for the said work if it is is allotted to them, the applicant has requested for clarification in the matter. It was in This context, that the applicant has desired ruling on the following questions.
i. What should be the rate of tax on the said work, will it be 12% or 18%?
ii. What is the current tax rate of tax on the work and as to whether there is any change on rate of Tax since 1.1.2022 or till date?
4. Personal Hearing:-
Keeping with the established principles of natural justice, personal hearing in the matter was extended to the applicant in person, as requested by them and accordingly, Shri Bhavesh Agrawal, Proprietor and Shri Rafik Memon, Tax Consultant, Authorised representative of the Applicant appeared before us for hearing on 07.04.2022 and reiterated their contention. He alsc furnished a written submission dated 07.04.2022 along with sample copy of work order which has been taken on record.
5. The legal position, analysis and discussion: –
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.
6. Section 96 of CGST Act, 2017, Authority for advance ruling, stipulates as under: –
Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory.
Section 97(2) of CGST Act, 2017 stipulates that: –
The question, on which the advance ruling is sought under this Act, shall be in respect of—
(a) classification of any goods or services or both;
(b) applicability of a notification issued under the provisions of this Act;
(c) determination of time and value of supply of goods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.
Further 103 of CGST Act, 2017 stipulates about the ruling pronounced as under: -The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only –
a. On the applicant who had sought if in respect of any matter referred to in sub-section (2) of section 97 for advance ruling;
b. On the concerned officer or the jurisdictional officer in respect of the applicant.
Thus, in view of the above section 103 of CGST Act, 2017, the ruling so sought by the Applicant would be binding only on the Applicant and on the concerned officer or the jurisdictional officer as stipulated above.
7. Before getting in to the issues involved, we would first like to go through the relevant text of the issue in hand, as appearing at S.No. 3(v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended, vide Notification 01/2018 Central Tax (Rate) dated 25.01.2018 and various other amendments from time to time, lastly amended vide Notification no. 22/2021-Central Tax (Rate) dated 31.12.2021. In the instant case the eligibility or otherwise of the benefit of said Notification no. 11/2017 Central Tax (Rate) as amended, provided under S.no. 3(v)(a) ibid, to the applicant is the subject matter of this proceeding. For the sake of brevity the relevant text of the same is reproduced hereunder.
7.1 Rate of GST on intra-State supply of specific services with Service Code Tariff (SAC)
Government of India
Ministry of Finance
(Department of Revenue)
Notification No. 11/2017-Central Tax (Rate)
New Delhi, the 28th June, 2017
G.S.R………… (E).- In exercise of the powers conferred by sub-section (1), [sub-section (3) and subsection (4)] 1 of section 9, sub-section (1) of section 11, sub-section (5) of section 15(,]2 sub-section (1) of section 16 (and section 148] 3 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 intro-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:-
