Works contract classification for land preparation rejected as sand supply; concessional earthwork entry denied under GST ruling.

An advance ruling application remained maintainable even though the supply had been completed, because GST advance rulings may cover questions on undertaken or proposed supplies and the admissibility stage had already been crossed without objection. On classification, filling, spreading, compacting, ramming and earthwork done to prepare land for construction was treated as works contract service involving site preparation of immovable property, not as a mere supply of sand under HSN 2505. The concessional entry for works contracts based on earthwork exceeding 75% of contract value was denied because the earthwork component was far below that threshold and the recipient was not shown to be a government entity. The activity was held taxable as site preparation service under SAC 99543.

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Issues: (i) Whether the application for advance ruling was maintainable despite the objection that the supply had already been completed; (ii) Whether the applicant's activity of filling and earthwork was classifiable as supply of sand under HSN 2505 or as works contract service, and whether it qualified for the concessional entry based on earthwork percentage.

Issue (i): Whether the application for advance ruling was maintainable despite the objection that the supply had already been completed.

Analysis: An advance ruling under the GST law may be given on questions relating to supply undertaken or proposed to be undertaken. The objection based on completion of the supply was not accepted because the admissibility stage had already been completed without objection and the statutory scope was wide enough to cover undertaken activities as well.

Conclusion: The objection to maintainability was rejected and the application was held admissible.

Issue (ii): Whether the applicant's activity of filling and earthwork was classifiable as supply of sand under HSN 2505 or as works contract service, and whether it qualified for the concessional entry based on earthwork percentage.

Analysis: The work orders showed that the activity involved filling, spreading, compacting, ramming, saturation with water, and earthwork for preparing the site for construction. The activity was therefore not a mere supply of goods but a transfer of property in goods in the course of site preparation, amounting to works contract involving improvement of land, an immovable property. The concessional entry for works contracts with earthwork exceeding 75% of the contract value did not apply because the earthwork component was far below that threshold. The recipient was also not shown to be a government entity for that purpose. Accordingly, the supply fell under site preparation service.

Conclusion: The supply was held to be works contract service classifiable as site preparation service (SAC Group 99543) and taxable at 18%, and not classifiable under HSN 2505.

Final Conclusion: The ruling resolved the dispute against the applicant by treating the activity as a taxable service of site preparation rather than a goods supply, and by denying the claimed concessional classification.

Ratio Decidendi: A composite activity involving site filling, compaction, ramming, and earthwork undertaken to prepare land for construction is works contract service and not classification as a supply of sand when the dominant legal character is site preparation of immovable property.

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