TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 854
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim could be seen thus- Statement of relevant facts having a bearing on the question(s) raised 1. We are providing works contract service as sub-contractor to main contractor for original contract work pertaining to railways. 2. As per Notification No-20/2017- Central Tax (Rate) dated 22-08-2017 the rate of GST is 12% for composite supply of works contract supplied by way of construction, erection, commission or installation of original works pertaining to railways. 3. As per SR.No-12 in press release of 25th meeting of GST council held at New Delhi on 18-01-2018, the rate of GST applicable to main contractor should be levied by sub-contractor. 4. As per Notification No-01/2018- Central Tax (Rate) dated 25-01-2018 the service provided by sub-contractor to afore main contractor for railway original works contract ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India; (d) low cost houses up to a carpet area of 60 square metres per house in a housing project approved by the competent authority under- (1) the Affordable Housing in Partnership component of the Housing for All (Urban) Mission/Pradhan Mantri Awas Yojana; (2) any housing scheme of a State Government; (e) post-harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or (f) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages, 12 e. The sub-contractor providing services to main contractor is further classified only under two categories as under SAC Code Description of Services Rate in % 9954 (ix) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017 provided by a sub-contractor to the main contractor providing services specified in item (iii) or item (vi) above to the Central Gov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erty, wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract; 2. As per Section 2 (5) of CGST Act, 2017 "agent" means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent; by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another; 3. Contractor and sub-contractor are not defined under the CGST Act, 2017 but as per the general definition. a. Contractor means a person or firm that undertakes a contract from the employer to provide materials or labour to perform a service or do a job at a specified price. b. A subcontractor means a person who is hired by a general contractor (or prime contractor, or main contractor) to perform a specific task as part of the overall project or the total project at a specified price for services provided to the project by the originating employer. 4. When the contractor awards either wholly or partially, the contractual obligation to a sub-contractor the contracts remains the same and the identity of the contract doesn't change. 5. Wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... section 5 of classification of services even though not specified separately. 14. Thus the rate applicable for civil works contract carried out for railways in para (v) of heading 9954 of section 5 classification of services should be applicable to subcontractor also. 03. CONTENTION - AS PER THE CONCERNED OFFICER 2. As directed the application has been examined with reference to provisions of Chapter XVII of CGST Act, 2017 and it is submitted that- i) Prima facie it appears that the question on which the advance ruling is sought under CGST Act doesn't fall under any of the category mentioned in sub section (2) of Section 97 of the Act as the question, put forth by the applicant is only relating to charging of rate of tax on the Works Contract Services (WCS) by the sub contractor to main contractor in respect of railways original works contract. ii) On examination of the Notification No.20/2017-Central Tax (Rate) dated it appears that in terms of serial number (v) of Table, Composite supply of works contract as defined in clause (119) of Section 2 of CGST Act, 2017, supplied by way of construction, erection, commissioning or installation of original works pertaining to - ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s in ARA. No jurisdictional officer from the side of the department was present. The application was admitted and Final Hearing in the matter was held on 03,07.2018. Shri Deepak Chandok, Chartered Accountant, along with Shri Vasant Hidakar, Partner appeared and made oral and further written submissions which were taken on record. The jurisdictional officer, Sh. Devender Bakliwal, Supdt., Division-I, Pune-I Commissionerate appeared and made written submissions which were taken on record . 05. OBSERVATIONS We have gone through the facts of the case, submissions made by the applicant and the department and documents on record. The applicant has submitted that they are supplying Works Contract Services (WCS), as a sub-contractor, to the main contractor who in turn are supplying WCS for original work pertaining to the Railways. They have made further submissions that when a contractor awards either wholly or partially, the work to a sub-contractor, then the work to be performed by both of them remains the same and identical to what is specified in the contract between the main contractor and the employer, in this case, the Railways and as per Notification No-20/2017- Central Tax (R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat the applicant has submitted that they have been sub-contracted by the main contractor to supply WCS and in turn the main contractor is supplying WCS to the Railways. From the submissions made by the applicant it appears that the WCS provided by them is the same or a part of the main contract entered into between the main contractor and the Railways. It also appears that works contract service is civil works performed by the sub-contractor for the Railways and the property in goods (materials used in the supply of Works Contract Service) also gets transferred to the Railways directly. In such a case as per the abovementioned clause (v) of Notfn No. 20/ 2017-CentraI Tax (Rate) dated 22.10.2017, the works contract service provided by the sub-contractor to the main contractor would be supply of Works Contract pertaining to Railways and therefore chargeable to tax @ 12% (6% of CGST and SGST each). However, the benefit of 12% tax rate would be available to the applicant only if the Works Contract services provided by them are Composite supply of works contract as defined in clause(119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied by way of construction, erec....