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IIT Madras civil contract services face GST rate hike from 12% to 18% after notification amendments The AAR, Tamil Nadu ruled on GST classification for civil contract services provided to IIT Madras. Initially, services to IIT Madras qualified for 12% ...
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IIT Madras civil contract services face GST rate hike from 12% to 18% after notification amendments
The AAR, Tamil Nadu ruled on GST classification for civil contract services provided to IIT Madras. Initially, services to IIT Madras qualified for 12% GST rate under Serial No. 3(vi) of Notification 11/2017 as IIT Madras constituted a Government Entity. However, following amendments through Notifications 15/2021 and 22/2021 effective January 1, 2022, the terms "Governmental Authority" and "Government Entity" were deleted from the notification. Consequently, services to IIT Madras now attract 18% GST rate under Serial No. 3(xii), as the concessional rate no longer applies to government entities.
Issues Involved: 1. Applicable rate of tax under CGST Rules for Civil Contract Services provided to IIT Madras with effect from 01.01.2022.
Summary:
Issue 1: Applicable Rate of Tax for Civil Contract Services:
The applicant, M/s ESVEE Constructions, sought an advance ruling on the applicable rate of tax under CGST Rules for Civil Contract Services (SAC 995415) provided to IIT Madras from 01.01.2022, following the amendment to Notification No. 11/2017 C.T. (Rate) by Notification No. 15/2021 C.T. (Rate) dated 18.11.2021.
The applicant contended that IIT Madras is a Central Government Entity, and thus, the applicable GST rate for the services provided should remain at 12% even after the amendment.
Upon review, the Authority noted that IIT Madras is a 'Government Entity' as per explanation 4(x) of Notification No. 11/2017 C.T (Rate) dated 28.06.2017. However, the amendment via Notification No. 15/2021 C.T (Rate) dated 18.11.2021, effective from 01.01.2022, omitted the term 'Government Entity' from the relevant entry.
Consequently, the services provided by the applicant to IIT Madras fall under serial number 3 (xii) of Notification No. 11/2017 C.T (Rate) dated 28.06.2017, as amended, attracting a CGST of 9% and SGST of 9%.
Ruling:
The applicable rate of tax for the Civil Contract Services provided by the applicant to IIT Madras with effect from 01.01.2022 is CGST @ 9% and SGST @ 9%, totaling 18%.
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