In re S.P. Singla Constructions Pvt. Ltd. (GST AAR Punjab)
Question: What is the classification of the ‘Works Contract’ services pertaining to construction, erection, commissioning and completion of ‘Bridges’ provided by the applicant as a subcontractor to the Contractors who have been awarded the construction contract pertaining to construction / widening of roads by the Government Entities such as National Highway Authority of India.
Answer: The services pertaining to construction, erection, commissioning and completion of ‘Bridges’ provided by the applicant as a sub-contractor in respect of construction contract pertaining to construction / widening of road by the National Highway Authority of India falls under the scope of Serial No. 3(iv) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 (as amended) and attracts GST @ 12% (CGST 6% + SGST 6%).
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, PUNJAB
1. M/s S.P. Singla Constructions Pvt. Ltd. (Applicant) is engaged in the business of construction, erection, commissioning and completion of bridges. The Applicant is situated in the State of Punjab in Sangrur at its premises H No. 4408, Sunami Gate, Sangrur- 148001 and is registered under the Central Goods and Service Tax Act, 2017 (CGST Act) vide GSTIN No 03AAGCS5773B1ZK.
2. The Applicant is engaged as a sub-contractor to the main Contractors who have been awarded the construction contracts pertaining to construction/widening of roads by the Government/ Government Entities such as National Highway Authority of India (NHAI). In some cases, the Applicant is also appointed as the main Contractor for carrying out the activity of construction, erection, commissioning, installation of bridges by the Government/ Government Entities. However, vide the present application, the Applicant is seeking Advance Ruling on the classification ol services supplied by it under the contracts for construction, erection, commissioning, installation of bridges wherein it has been engaged as a sub contractor
3. For the purpose of present Application, the Applicant has placed reliance on the contract awarded by the NHAI to M/s M.G. Contractors Pvt. Ltd. for four-laning of Kharar-Kurali section of NH-21 from KM 15.765 to Km 29.900 (existing chainages) (New NH – 205) in the State of Punjab of on EPC mode vide Letter of Award (LOA) NHAI/K-K/PB/NH-21/2015/2367 dated 24.09.2015 on terms and conditions staled therein.
4. The contract awarded by the NHAI to M.G Contractors Pvt. Ltd. involved construction of road-over-bridge (ROB) which was sub-contracted by M.G Contractors Pvt. Ltd. to the Applicant vide work order dated 08.09.2017 (for construction of ROB at CH-26+880 crossing SHRIND-MORINDA – KURALI -NANGAL Railway line) on the terms and conditions specified therein.
5. In this background, the Applicant has sought advance ruling on the question as to what is the appropriate classification & applicable rate of GST to be discharged on supplies made by it as a sub-contractor to the main contractor who has been awarded the construction contracts pertaining to construction/widening of roads by the Government/ Government Entities such as NHAI.
III. QUESTION(S) ON WHICH ADVANCE RULING IS SOUGHT:
What is the classification of the ‘Works Contract’ services pertaining to construction, erection, commissioning and completion of ‘Bridges’ provided by the applicant as a subcontractor to the Contractors who have been awarded the construction contract pertaining to construction / widening of roads by the Government Entities such as National Highway Authority of India.
IV. ELIGIBILITY OF THE APPLICATION FOR ADVANCE RULING:
The Section 97(2) of the Central Goods and Services Tax Act, 2017, read with Section 97(2) of the Punjab Goods And Services Tax Act, 2017, provides for the issues on which advance ruling can be sought.
97 (2) 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.
It is observed that the queries of the applicant in para III is related to the question of classification of the ‘Works Contract’ services pertaining to construction, erection, commissioning and completion of ‘Bridges’ provided by the applicant as a sub-contractor to the Contractors who have been awarded the construction contract pertaining to construction / widening of roads by the Government Entities falls under the ambit of Section 97(2) (a) -classification of any goods or services or both. Hence, the application of the applicant is eligible for a ruling by the Punjab State Advance Ruling Authority.
V- SUBMISSIONS BY THE APPLICANT:
The applicant has submitted as under:
1. The classification and rates applicable on supply of service are provided in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.
2. Serial No. 3 of Notification No. 11/2017 provided for rate of GST on construction services. The activity of the applicant falls under entry at Serial No. 3(iv) of Notification No.11/2017 which provides as under:
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