Classification of Work Contracts Under GST: Ruling on Support Services to Mining

The case involved issues related to the classification of work contracts under GST, the distinction between operator and manpower under GST provisions, and the classification of special purpose vehicles as "Machinery" under GST. The authority ruled that the work undertaken by the applicant was classified as "Support Service to Mining" under HSN 998622, attracting GST at 18%. However, the questions regarding the difference between operator and manpower and the classification of special purpose vehicles were deemed beyond the authority's mandate, and no ruling was provided on these matters.

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Issues Involved:
1. Classification of the work contract under GST.
2. Difference between operator and manpower as per GST provisions.
3. Classification of Special Purpose Vehicles as "Machinery" under GST.

Issue-wise Detailed Analysis:

1. Classification of the Work Contract under GST:
The applicant, M/s. KSC Buildcon Private Limited, entered into a contract for mining operations, including drilling, excavation, and transportation of green marble/serpentine. The applicant argued that the work should be classified under SAC 9954 as a composite supply of work contract services. However, the authority found that the applicant was providing support services to M/s. AMP Minerals Pvt. Ltd. for the extraction of minerals, which is classified under HSN 998622 as "Support Services to Mining." The rate of GST on this service is 18% (CGST 9% + SGST 9%) as per Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.

2. Difference between Operator and Manpower as per GST Provisions:
The applicant sought clarification on the difference between operator and manpower under GST provisions. The authority found that the supply of manpower and vehicles was for the applicant's own benefit and not made to M/s. AMP. Hence, these supplies could not be categorized as independent supplies to M/s. AMP. The authority did not provide a ruling on this issue as it falls beyond the scope of Section 97(2) of the CGST Act, 2017.

3. Classification of Special Purpose Vehicles as "Machinery" under GST:
The applicant argued that the special purpose vehicles used in mining operations should not be categorized as "Machinery" under the GST Act. The authority found that the applicant misunderstood the facts, as the supply of vehicles and manpower was for the applicant's own use and not leased to M/s. AMP. Therefore, the classification of these vehicles as machinery was not relevant to the supply made to M/s. AMP. This issue was also beyond the scope of Section 97(2) of the CGST Act, 2017, and no ruling was given.

Conclusion:
The authority ruled that the work undertaken by the applicant is classified as "Support Service to Mining" under HSN 998622 and attracts GST at 18%. Questions regarding the difference between operator and manpower and the classification of special purpose vehicles as machinery were beyond the authority's mandate and no ruling was provided on these issues.

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