In re Transmission Corporation of Telangana Limited (GST AAR Tealangana)
1. Eligibility to exemption from tax on the supply of works contract services by the applicant to Greater Hyderabad Municipal Corporation (GHMC).
Taxable @18%
2. Tax liability with respect to works contract services procured by the applicant from a 3rd party for supplying same services to GHMC.
Taxable @18%
3. Eligibility to exemption from tax on supply of works contract services by the applicant to I & CAD department.
Exempt to the extent of grants are received against supplies by applicant
4. Tax liability with respect to works contract services procured by the applicant from a 3rd party for supplying same services to I & CAD department.
Taxable @18%
5. Tax liability for supply of works contract service by the applicant to south central railway.
Taxable @18%
6. Tax liability for procuring works contract services by the applicant from a 3rd party in order to supply the same to south central railway.
Taxable @18%
Read AAAR Order : GST on supply of works contract service to South Central Railway
FULL TEXT OF AUTHORITY OF ADVANCE RULING, TELANGANA
ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND UNDER SECTION 98(4) OF THE TEALANGANA GOODS AND SERVICES TAX ACT,2017.
1. M/s. Transmission Corporation Of Telangana Limited 6-3-572 Vidyuth Soudha, Khairatabad, Hyderabad 500 082 Telangana. (GSTIN No. 36AAFCT0166J1Z9) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules.
2. At the outset, it is made clear 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 any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.
3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted
4. Brief facts of the case:
The applicant M/s. Transmission Corporation of Telangana Limited (TS TRANSCO) is State Transmission Utility (STU) notified by Government of Telangana under Section 39 of Electricity Act, 2009. The applicant claims that they erect transmission towers and installs electric transmission lines to meet the requirement of State Government, Local authorities and Industrial Consumers. Such transmission towers are shown in the books of the applicant as Deposit Contribution works or DC works. For the purpose of executing the DC works the applicant engages vendors on turnkey basis. Similarly they are also executing contracts for construction of transmission lines and sub-stations for extension of power supplies for lift irrigation projects in the State. Similarly they are also executing works for South Central Railways. They seek to ascertain the rate of tax on the various items of work, therefore they have applied for advance ruling on the same.
5. Questions raised:
Based on the facts mentioned hereinafter, the applicant sought Advance Ruling on the following issues:
1. The Classification of supplies made by TS TRANSCO in terms of HSN and applicable rate of tax;
2. The Classification of supplies procure by TS TRANSCO and eligibility to obtain services at reduced rate of 12% as per entry 3(iv) of Notification 11/2017 CTR dated 28 June 2017;
3. Eligibility of TS TRANSCO to avail input tax credit benefit on works contract services when viewed from the restrictions imposed under sub-section (5) of section 17 of the CGST Act, 2017.
6. Personal Hearing:
The Authorised representatives of the unit namely Smt. Radhika Verma Charter Accountant and Sri. Shankar Bala, Charter Accountant attended the personal hearing held on 07-10-2020. As the questions raised by the applicant are ambiguous, the authority suggested the applicant to seek clarification by filing a suitable questions based on their work Executed by the applicant. Hence the applicant filed a revised application in which the following clarifications were sought.:
1. Eligibility to exemption from tax on the supply of works contract services by the applicant to Greater Hyderabad Municipal Corporation (GHMC).
2. Tax liability with respect to works contract services procured by the applicant from a 3rd party for supplying same services to GHMC.
3. Eligibility to exemption from tax on supply of works contract services by the applicant to I & CAD department.
4. Tax liability with respect to works contract services procured by the applicant from a 3rd party for supplying same services to I & CAD department.
5. Tax liability for supply of works contract service by the applicant to south central railway.
6. Tax liability for procuring works contract services by the applicant from a 3rd party in order to supply the same to south central railway.
However, The Sate member retired on Superannuation on 31.01.2021. Further, Government of Telangana vide G.O. Rt. No. 216, Rev(CT-II) Dept, Dt.16.06.2021 have nominated Sri S.V. Kasi Visweswara Rao, Additional Commissioner (ST) as member to The Authority for Advance Ruling and hence the case was re-posted a fresh on 09.07.2021. Heard the case. The authorized representatives Sri. Shankar Bala, CA & AR Smt. Radhika Verma, CA & AR, Smt. J. Anuradha, DyCCA, TS TRANSCO Appeared before the AAR on 09.07.2021 and reiterated their averments in the application submitted and contended as follows:
The authorized representatives reiterated their averments in the application submitted and contended as follows:
1. That the government departments have requested for installation of transformers and laying of cables in specific locations identified by such government departments for example GHMC, Irrigation & CAD. That these departments have financed these works. These works are commonly known as Deposit Contribution works ( DC works ).
2. That they have employed works contractors for execution of these works and the applicant will be the sole owner of the completed works in form of immovable property.
3. That they would like to ascertain the exigibility of the supplies made to their consumers i.e., GHMC and I & CAD.
4. That they would like to ascertain the exigibility of the supplies made by the works contractors engaged by them in light of entry 3(vi) Notification 11/2017 dt: 28.06.2017.
7. Discussion & Findings:
We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made by the AR 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.
Now different works contract services are classified under the GST Act in the original notification i.e., Notification 11/2017 dt: 28.06.2017
In this notification the all works contracts are classified into (3) categories:
Clause i: Construction of complex or a building.
Clause ii: Supply of composite works contract as defined in clause (119) of section 2 of CGST Act, 2017.
Clause iii: All other construction services.
Works Contract Services under Notification 11/2017 dt: 28.06.2017
