In re Avantika Contracts (I) Limited (GST AAAR Telangana)
Q1. Whether the construction of Institute of Security and Law Enforcement studies at Addu City in Maldives, constructed for Government of Maldives under an Memorandum of Understanding between India and Maldives falls within the GST net?
A1. Yes, the supply is within the ambit of GST.
Q2. Who is the recipient of service in the instant case?
A2. National Buildings Construction Corporation Limited, Delhi is recipient of service from the applicant
Q3. What is the place of supply in respect of the works contract for setting up of the Institute of Security and Law Enforcement Studies at ADDU City in Maldives?
A3. The applicant who is the supplier of service & NBCCL who is recipient of service are located in India and therefore the place of supply is to be determined under Section 12 of the IGST Act. The proviso to Sub-Section (3) of Section 12 of IGST Act clearly mention that if the location of immovable property is intended to be located outside India, the place of supply shall be the location of the recipient i.e., NBCCL.
Read AAR Order: Place of supply is Location of recipient in case of Construction of Immovable property Outside India
FULL TEXT OF THE ORDER OF APPELLATE AUTHORITY FOR ADVANCE RULING,TELANGANA
preamble
1. In terms of Section 102 of the Telangana Goods and Services Tax Act, 2017 (TGST Act, 2017 or the Act), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer or the applicant within a period of six months from the date of the order. Provided that no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the applicant or the appellant has been given an opportunity of being heard.
2. Under Section 103 (1) of the Act, this Advance Ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only,-
(a) On the applicant who had sought it 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.
3. Under Section 103 (2) of the Act, this Advance Ruling shall be binding unless the law, facts or circumstances supporting the original Advance Ruling have changed.
4. Under Section 104 (1) of the Act, where the Appellate Authority finds that Advance Ruling pronounced by it under sub-Section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such Advance Ruling has never been made.
Subject: GST – Appeal filed by M/s. Sri Avantika Contracts (I) Limited, 610-B, Nilgiri Blocks, Aditya Enclav, Ameerpet, Hyderabad- 500 016 under Section 100 (1) of TGST Act, 2017 Against Advance Ruling TSAAR Order No. 05/2021, dated 05.08.2021 passed by the Telangana State Authority for Advance Ruling – Order-in- Appeal passed – Regarding.
1. The subject appeal has been filed under Section 100 (1) of the Telangana Goods and Services Tax Act, 2017 (hereinafter referred to as “TGST Act, 2017” or “the Act”, in short) by M/s. Sri Avantika Contracts (I) Limited, 610-B, Nilgiri Blocks, Aditya Enclav, Ameerpet, Hyderabad- 500 016 The appellant is registered under GST having GSTIN number 36AAJCS5046C1ZG, The appellant is a works contractor and engaged in the business of civil engineering and construction works. The appeal is filed against the Order No. 05/2021, dated 05.08.2021(“impugned order”) passed by the Telangana State Authority for Advance Ruling (Goods and Services Tax) (“Advance Ruling Authority” / “AAR” / “lower Authority”).
2. Brief Facts:
1. M/s Sri Avantika Contractors (I) Limited are engaged in construction services providing works contract services. They have secured contract from National Buildings Construction Corporation Limited (NBCCL) Delhi for constructing a building at Addu City, Maldives.
2. It is the understanding of the applicant that recipient of construction service is the Government of Maldives as the institute is being constructed as part of assistance from Government of India to Government of Maldives. Further as per the GST Act, 2017, the supply of services are taxable only within the territory of India. And therefore the supply of this service outside India does not constitute taxable supply.
3. They further contend in the application that the recipient of the service is Government of Maldives as they would be ultimate owners of the constructed building and hence the place of supply would be Maldives in terms of Section 13(4) of IGST Act, 2017.
4. We have considered the submissions made by the applicant in their application for advance ruling as well as the additional submissions made by R. Narasimha Murthy, Tax Consultant. During the personal hearing, we also considered the issues involved on which advance ruling is sought by the applicant and relevant facts. At the outset, we would like to state 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 such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the TGST Act.
5. The Government of Republic of India & Government of Maldives entered into a memorandum of understanding for construction of a Police Academy. As per this MOU the Government of India has awarded the work relating to planning, designing and execution of the project to National Buildings Construction Corporation Ltd., New Delhi. Sri Avantika Contractors Ltd., are in turn awarded the sub-contract to construct the said building by National Buildings Construction Corporation Ltd., New Delhi.
6. Evidently Sri Avantika Contractor Ltd., have not entered into any contract with Government of Maldives for carrying out the said construction. Further they do not have any privity with respect to the MOU between the Government of Republic of India & Government of Maldives. Therefore the applicant does not have any mutual or successive relationship with the Government of Maldives. Hence Government of Maldives is not the recipient of any service from the applicant.
7. Further an agreement is reached by National Buildings Construction Corporation Ltd., (NBCCL) New Delhi & Sri Avantika Contractor Ltd to construct the building at Addu City in Maldives. Hence Sri Avantika Contractor Ltd., is supplier of the service of the works contract and National Buildings Construction Corporation Ltd., New Delhi is the recipient of the Service.
8. Both the applicant who is the supplier of service & NBCCL who is recipient of service are located in India and therefore the place of supply is to be determined under Section 12 of the IGST Act. The proviso to Sub-Section (3) of Section 12 of IGST Act clearly mention that if the location of immovable property is intended to be located outside India, the place of supply shall be the location of the recipient
Lower authority, examined the submissions made by the Appellant and vide the impugned order, the Advance Ruling Authority had given the following Advance Rulings:
In view of the observations stated above, the following rulings are issued with regard to the applicability of Not. No. 11/2017-CT(R), dated 28.06.2017 (as amended) to the below mentioned activities:
