2019 (10) TMI 750 - AAR - GST

Chief Electrical Engineer in Goa subject to CGST and SGST rates per Advance Ruling

In Re: M/s. Chief Electrical Engineer, Goa

The Advance Ruling concluded that the Chief Electrical Engineer, Goa is subject to CGST at 9% and SGST at 9% for various works and activities, except for ... Works Contract services - Sub Section 119 of the Section 2 and Sub Section 30 of the Section 2 of the CGST Act, 2017 - HELD THAT:- The applicant is liable to pay SGST & CGST on the supply, erection, testing and commissioning of low voltage, high voltage, extra voltage overhead lines, cables, circuit breakers, voltage transformers, outdoor structure in sub stations and other arears, high voltage panels distribution boxes, ring main units, civil works for circuit breaker, transformer, bay panel installation, preventive maintenance of circuit breaker, transform, bay, panels etc., breakdown maintenance of circuit breaker, transformer, bay, panels, etc., supply erection testing and commissioning of street light poles and earthing as the same activities amounts to works contract. As per the provision of Sub Section 30 of Section 2 of the CGST Act, 2017 the above mentioned works contract amounts to composite supply and the composite supply of works contract is taxable @ 18% vide Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017. Hiring of vehicles - HELD THAT:- There are different provisions for vehicle hiring, for the purpose of transporting goods and for the purpose of transporting passengers. The applicant Chief Electrical Engineer, Goa is liable to pay CGST @ 9% & SGST @ 9% on various works/activity undertaken by them except on hiring of the vehicles - The applicant is liable to pay CGST @ 2.5% & SGST @ 2.5% or CGST @ 6% & SGST @ 6% on hiring of vehicles subject to the conditions specified in Notification No. 20/2017-Central Tax(Rate), dated. 22nd August, 2017. Issues:- Determination of GST rate applicable for various works/activity undertaken by the Chief Electrical Engineer, Goa.- Applicability of SGST & CGST on supply, erection, testing, and commissioning activities.- Classification of works contract and composite supply under relevant provisions.- Tax rates for hiring of vehicles for different purposes.Analysis:The application sought an Advance Ruling under section 97 of the Goa Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017 regarding the GST rate applicable for multiple works and activities carried out by the Chief Electrical Engineer, Goa. The applicant, a Government Department, is involved in diverse tasks related to the transmission and distribution of electrical energy to the public, including supply, erection, testing, and commissioning of various electrical components and infrastructure.Upon examining the provisions of Sub Section 119 of Section 2 and Sub Section 30 of Section 2 of the CGST Act, 2017, it was determined that the activities performed by the applicant amount to a works contract. As per Sub Section 30 of Section 2, these works contracts constitute a composite supply and are taxable at 18% (9% CGST & 9% SGST) as per Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017. Therefore, SGST & CGST are applicable on the mentioned activities, except for hiring of vehicles.Regarding the hiring of vehicles, specific tax rates apply based on the purpose of hire as per Notification No. 20/2017-Central Tax (Rate), dated 22nd August, 2017. For services of goods transport agency (GTA) in relation to transportation of goods, the tax rate is either 5% (2.5% CGST + 2.5% SGST) or 12% (6% CGST + 6% SGST) subject to certain conditions. Similarly, for transport of passengers by motor cab, the tax rate is either 5% (2.5% CGST + 2.5% SGST) or 12% (6% CGST + 6% SGST) based on specific criteria.In conclusion, the Advance Ruling determined that the Chief Electrical Engineer, Goa is liable to pay CGST @ 9% & SGST @ 9% on various works and activities, except for hiring of vehicles where the applicable rates are CGST @ 2.5% & SGST @ 2.5% or CGST @ 6% & SGST @ 6% depending on the purpose of vehicle hire and as per the conditions specified in the relevant notification.