In re Shapoorji Pallonji & Company Private Limited (GST AAR Andhra Pradesh)
The applicant is providing the following supplies to the GVSCCL:
a) Construction of the project
b) Development of the project including plantation, landscaping, Street lighting etc.,
c) Maintenance of the project.
The clause (119) of the section (2) of the CGST Act 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 where in 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 as defined at Section 2 of CGST Act, 2017 and APGST Act, 2017 is treated as supply of service in terms of serial No. 6, Schedule II of CGST Act, 2017 and APGST Act, 2017.
Greater Visakhapatnam Smart City Corporation Limited (GVSCCL) is a Special Purpose Vehicle (SPV) created by the Government of Andhra Pradesh vide G.O.MS.No.43, Municipal Administration & Urban Development (UBS) Department, Government of A.P. dated 17.02.2016. GVSCCL is a limited company incorporated under the Companies Act, 2013 in which the Andhra Pradesh State Government and the Greater Visakhapatnam Municipal Corporation are the promoters having 50:50 equity share holding, which substantiates more than 90% of participation of the Government. With reference to the ‘control’ wielded by the shareholders, all the directors of the board are public authorities. Initially the board was constituted with the Principal Secretary for Municipal Administration and Urban Development, Govt, of A.P., (under promoter category) as chairman. The District Collector and Commissioner, GVMC (under Promoter Category) and other 11 members were nominated by the Authorities in the State Government, ULB and Central Government as per the said G.O. The SPV is owned by the Government of A.P. And GVMC ON 50:50 ratio and is governed by a Board of Directors answerable to the Government of A.P., Government of India and GVMC. The Government of A.P. and GVMC are the shareholders in the GVSCCL.
Accordingly the GVSCCL rightly fits into the definition of the ‘Government Entity’ as per the said notification. The functions carried out by the said GVSCCL are the functions which were entrusted by the Central Government, State Government and Local Authority i.e. of Municipal Administration.
Furthermore, the service provided by the applicant is Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, provided to a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession. The same is classifiable under the Heading 9954 Entry at Serial No. 3(vi) (a) of the Notification No. 11/2017 – Central Tax (Rate), dated 28.06.2017 as amended from time to time and liable to tax @12%(6%CGST +6% SGST).
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING,ANDHRA PRADESH
ORDER
(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 pari materia and have the same provisions 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 responding 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. Shaooorji Pallonji & Company Private Limited (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017
3. Brief Facts of the case:
The applicant, M/s, Shapoorji Pallonji and Company Private Limited are primarily engaged in the construction business and provide works contracts services to various customers including the Government, public Sector undertakings. Government Entities and Private sector entities. The applicant is registered under GST bearing Registration No.37AAACS6994ClZ4
3.1. The applicant entered into a contractual arrangement with Greater Visakhapatnam Smart City Corporation Limited (”GVSCCL”). “GVSCCL” was constituted by Greater Visakhapatnam Municipal Corporation (“GVMC”) on 11.03.2016. It is a limited company incorporated under the Companies Act, 2013 at the city level, in which the state and the urban local body (GVMC) are the promoters with 50:50 equity share holding as per G.O.MS.No.43 3.2 In June 2015, the Government of India (“GOI”) initiated “Smart City Mission”, as a part of which Special Purpose Vehicles (“SPV”) are created. The SPVs will Plan, appraise, approve, release funds, implement, manage, operate, monitor and evaluate the Smart City development projects. Each Smart City will have a SPV which will be headed by a full time CEO and have nominees of Central Government, State Government and Urban Local Bodies (“ULB”) on its Board. GVSCCL is one of such Special Purpose Vehicles (SPV).
3.3. The applicant entered into an agreement dated 04.06.2018 (“Agreement”) with GVSCCL for beautification of Streets .deluding Streetscape Design, Landscaping and Intersection Redesign in Visakhapatnam’s Area Based Development under Smart Cities Mission. This Agreement includes the supply of materials and the provision of services by the Supplier to the Applicant.
3.4 In order to understand the nature of services provided by the applicant the applicant has presented the relevant clauses of the agreement as under:
