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

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 hiring of vehicles where the rates are CGST at 2.5% and SGST at 2.5% or CGST at 6% and SGST at 6%, depending on the purpose of vehicle hire and conditions specified in the relevant notification.

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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.

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