Ruling: Site preparation service taxed at 18% under works contract. Advance ruling scope clarified.

The Authority ruled that the Applicant's supply of filling in compound, tank, low land with silver sand and earthwork constituted a works contract service for site preparation, taxable at 18%. The ruling clarified that an advance ruling can cover activities undertaken, objections to admissibility cannot be entertained post-proceedings, and the value of earthwork in the contracts was below the threshold for a different classification.

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Issues:
1. Admissibility of the Application
2. Submissions of the Applicant
3. Submission of the Revenue
4. Observations and findings of this Authority

Admissibility of the Application:
The Applicant sought a ruling on the classification of their supply of filling in compound, tank, low land with silver sand and earthwork. The issue of admissibility arose during the hearing, with the Revenue officer objecting to it based on the completion of supply. The Authority clarified that an advance ruling can cover activities undertaken, not just future ones, and once admitted, objections to admissibility cannot be entertained post-proceedings.

Submissions of the Applicant:
The Applicant argued that their supply should be classified under HSN 2505 (sand supply) based on the ratio of a similar case in Jharkhand. They presented contract details showing sand as a significant part of the supply value. The Applicant contended that the supply predominantly involved sand, supporting its classification under HSN 2505.

Submission of the Revenue:
The Revenue officer contended that the Applicant's activities constituted site preparation services for subsequent construction work, falling under HSN 9954 and taxable at 18%. They argued that the work involved making the land suitable for construction, thus classifying it as a works contract service.

Observations and Findings of this Authority:
The Authority analyzed the work descriptions and contract details to determine that the supply involved improving and modifying land, making it a works contract transferring property in goods during site preparation. They dismissed the relevance of the Jharkhand case, as the value of earthwork in the Applicant's contracts was below the threshold for that classification. The Authority ruled that the Applicant's supply was a works contract service, classifiable as site preparation service and taxable at 18%.

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