TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 145
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....Act. 3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The concerned jurisdictional officer also raised no objection to the admission of the application. The application is therefore, admitted 4. Brief facts of the case: The applicant M/s. Transmission Corporation of Telangana Limited (TS TRANSCO) is State Transmission Utility (STU) notified by Government of Telangana under Section 39 of Electricity Act, 2009. The applicant claims that they erect transmission towers and installs electric transmission lines to meet the requirement of State Government, Local authorities and Industrial Consumers. Such transmission towers are shown in the books of the applicant as Deposit Contribution works or DC works. For the purpose of executing the DC works the applicant engages vendors on turnkey basis. Similarly they are also executing contracts for construction of transmission lines and sub-stations for extension of power supplies for lift irrigation projects in the State. Similarly they ....
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.....07.2021. Heard the case. The authorized representatives Sri. Shankar Bala, CA & AR Smt. Radhika Verma, CA & AR, Smt. J. Anuradha, DyCCA, TS TRANSCO Appeared before the AAR on 09.07.2021 and reiterated their averments in the application submitted and contended as follows: The authorized representatives reiterated their averments in the application submitted and contended as follows: 1. That the government departments have requested for installation of transformers and laying of cables in specific locations identified by such government departments for example GHMC, Irrigation & CAD. That these departments have financed these works. These works are commonly known as Deposit Contribution works (DC works). 2. That they have employed works contractors for execution of these works and the applicant will be the sole owner of the completed works in form of immovable property. 3. That they would like to ascertain the exigibility of the supplies made to their consumers i.e., GHMC and I & CAD. 4. That they would like to ascertain the exigibility of the supplies made by the works contractors engaged by them in light of entry 3(vi) 11/2017. 7. Discussion & Findings: We have consider....
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....f goods from this exemption. 2. Notification no. 17/2018 dt: 26.07.2018 - The following items were made eligible to be taxed at a reduced rate of 6% for CGST & SGST respectively, if the service is provided to State Government, Central Government or Local authority. This concession is made available even to supplies made to a Government entity if such entity performs works for Central/State Governments or Local authorities. a. Civil Structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; b. (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or(iii) an art or cultural establishment; or c. a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017. Further the annexure to this notification classifies clause (ii) to entry 3 gives a detailed list of services under head 9954 of which the head 995423 and 995424 are relevant to the present discussion. Annexure: Scheme of Classification of Services S.No. Chapter, Section, Heading or ....
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....nnection it is observed that entry 3 of notification 12/2017 referred above relates to pure services other than works contracts service or composite supplies involving supply of goods. It is seen from the material papers submitted that the applicant made supply of services to GHMC, west zone for shifting of 132 kV line between Jubilee hills -Chandrayangutta DC and 132kV Erragadda - Shivarampally. The abstract of estimate at page no 6 of material papers has breakup of inputs going in to the supply which are follows: Sl No Description Amount 1 Material 146810078.41 2 Labour 122309467.14 3 Road cutting charges 423140.00 4 Insurance @ 0.5% 1483703.39 5 Others 293820.76 6 Provisions 168127361.40 Total 439447571.00 As seen from the above estimate of contract, there is a significant involvement of goods in the composite supply of works contract. Therefore this is not a pure service as averred by the applicant and hence not eligible for exemption. Further, it is evident from the entry 3 of Notification 12/2017 CT (R) dated 28 June 2017 that only pure services which do not involve any works contract involving supply of goods or other composite supply invol....
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....es. However there is a residual entry at 3(vii) of the above Notification covering all other construction services not mentioned in the preceding entries. It is well known rule of construction that General provisions should yield to specific provisions. This principle of interpretation was upheld by the Hon'ble Supreme Court of India in a Catena of Case law of which J K Cotton Spinning & Weaving Mills Company Ltd Vs State of UP AIR 1961 SC 1170 is a land mark case. Applying this principle entry 3 (vi) excludes the electrical works. Therefore the claim of lower rate of tax claimed under this entry is not valid in view of this discussion. The applicant also brings forth an alternative submission that the expression "other than" "business or commerce" in entry 3 (vi) of the notification should be given full effect. In this connection it is seen that this construction is with respect to specific items of works contracts enumerated in this entry. Once the works undertaken by the applicant's contractor do not fall under the above entry for the reason discussed supra all other qualifications to the entry also becomes inapplicable for interpretation of the entry. In view of the ....
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....ctor to the applicant do not fall under entry 3 (vi) of Notification 11/2017 CTR dated.28.06.2017 as modified by Notification No.24/2017 dated.21.09.2017 and Notification no. 17/2018 dt:26.07.2018. Therefore this supply of works contract service is covered by Entry (vii) of Serial No. (3) of the said notification as inserted by way of substitution vide notification no. 24/2017 dt:21.09.2017. The same entry was later retained as Entry (xi) of Serial No. 3 to notification 11/2017 vide a substituted notification no. 3/2019 dt: 29.03.2019. Therefore this supply of works contract services to the applicant is taxable at the rate of 9% under both CGST & SGST Acts respectively. 5. The applicant submitted that they will be supplying works contract services to South Central Railways under General Construction service for long-distance underground/overland/ submarine pipe lines, communication and electric power lines (cables); pumping stations and related works; transformer stations and related works. That in their view supply of this service is taxable @18%. As discussed in the Paragraphs above, it is observed that the supply of general construction services which enumerated at entry 3 (vi....