In re YVR and Co, (GST AAR Andhra Pradesh)
Question: Applicability of CGST and SGST (Rate) on the listed works executed for Andhra Pradesh Industrial Infrastructure Ltd.
Answer: The listed works are classifiable under SAC Heading No. 9954 Construction Services, entry no (ii) of serial No.3 of notification No 11/2017 Central Tax (Rate) dated 28th June 2017 and the applicable rate of tax is 18% (9% under Central tax and 9% State tax).
Question: Applicability of CGST and SGST (Rate) on construction of 20MT cold storage building for Primary Processing Centre (PPC) under Mega park scheme at peddapuram, East Godavari district.
Answer: Classified under V (e) ofsl.no 3 under heading 9954 Construction Services of notification No 11/2017 Central Tax (Rate) dated 28th June 2017 with applicable rate of tax at 12%.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING,ANDHRA PRADESH
(Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub- section (4) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017)
1. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and SGST Act, 2017 are in parimateria and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the APGST Act.
2 The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s. YVR & Co (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017.
3. Brief Facts of the case:
The applicant, M/s. YVR & Co is engaged in construction services in respect of commercial / industrial buildings and civil structures. Certain civil works were awarded to the applicant by Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC). The applicant had filed an application in form GST ARA-01 dated 01.07.2021 by paying required amount of fee and approached the Authority for Advance Ruling on the applicability of GST Tax rates on the executed works.
4. Questions raised before the authority:
The applicant seeks advance ruling on the following:
1. Applicability of CGST and SGST Tax Rate on the listed works executed for Andhra Pradesh Industrial Infrastructure Corporation (APIIC).
2. Applicability of CGST and SGST Tax Rate on construction of 20MT cold storage building for Primary Processing Centre (PPC) under Mega park scheme at peddapuram, East Godavari district.
On Verification of basic information of the applicant, it is observed that the applicant is under State jurisdiction, i.e. Assistant Commissioner (ST) Steel Plant Circle, Visakhapatnam Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax Authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017. No remarks were received from the jurisdictional officers concerned on the issue.
5. Applicant’s Interpretation of Law:
The applicant seeks Advance Ruling in the context of the argument put forth by its contractee, APIIC that all the works executed for them attract concessional rate of tax. APIIC Claims that it is a Government company and works executed to them shall be considered as works executed for Government of Andhra Pradesh under category VI (a) of the notification No 11/2017 Central Tax (Rate) dated 28th June 2017 with the applicable rate of tax (CGST and SGST) for works numbered 1 to 6 as 12%.
In case of last work of sl.no 7, i.e., Construction of 20 MT Cold Storage Building for Primary Processing Centre the works come under sl.no. 3 of constructions services clause V (e) of notification No 11/2017 Central Tax (Rate) dated 28th June 2017 with, the applicable rate of tax as 12% (CGST and SGST each).
6. Virtual Hearing:
The proceedings of Hearing were conducted through video conference on 21.10.2021 for which the authorized representative, Sri Y V Ratnam attended and reiterated the submissions already made.
7. Discussion and Findings:
We have examined the specific issues raised in the application such as various construction works enlisted by the applicant and the applicable rate of tax thereon for the listed works under the provisions of respective GST Acts.
As seen from the application, the applicant was awarded by Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC) different construction projects as listed below:
1. Construction of compound wall in open space opp. Berger Paints
2. Construction of compound wall in open space ADJACENT TO PLOT No-188
3. Providing Chain link mesh for open spaces
4. Construction of RCC Storm water drains from NH-5 to Mindi Junction
5. Construction of Administrative Building at Traditional Food Park at Industrial Park
6. Repairs to the Existing storm water bricks drains and
7. Construction of 20 MT Cold Storage Building for ‘Primary Processing Centre’.
There is no dispute on the classification of construction work, being carried out by the applicant as ‘works contract’ under section 2(119), which reads as under:
“The Section 2 (119) of CGST Act, 2017 / APGST Act, 2017 defines “works contract” as 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;”
The composite supply of works contract under Section 2 (119) of CGST Act, 2017 / APGST Act, 2017 is treated as supply of service in terms of Serial No.6 (a) of Schedule II of CGST Act, 2017 / APGST Act, 2017.
The Government of India, vide notification No 11/2017 Central Tax (Rate) dated 28th June 2017 notified the rate of GST applicable on supply of services. Under this notification for heading 9954, the applicable rate of GST is 9%.
The said notification has been amended from time to time and the following notifications are issued by the Government of India and the said amendment Notifications are as follows –
1) Notification No- 20/2017 Central Tax (Rate), Dated – 22/08/2017.
2) Notification No- 24/2017 Central Tax (Rate), Dated – 21/09/2017.
3) Notification No- 31/2017 Central Tax (Rate), Dated – 13/10/2017.
4) Notification No- 46/2017 Central Tax (Rate), Dated – 14/11/2017.
5) Notification No- 01/2018 Central Tax (Rate), Dated – 25/01/2018.
Vide Notification No- 24/2017 Central Tax (Rate), Dated – 21/09/2017, Government of India by inserting entry No. (vi) notified concessional GST rate of 6%. In this regard the applicant claims that APIIC is a Government company and works executed to them shall be considered as works executed for Government of Andhra Pradesh under category VI (a) of the notification No 11/2017 Central Tax (Rate) dated 28th June 2017 with the applicable rate of tax (CGST and SGST) for works numbered 1 to 6 as 12%.
