TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 1368
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....o.20/2020 dated 10.12.2020 3. BRIEF FACTS OF THE CASE i. The Appellant M/s Saisanket Enterprises is a Works Contractor engaged in executing irrigation related works contracts. He is duly registered under the CGST / SGST Act in various states. In the State of Madhya Pradesh (MP) he is registered holding GSTIN 23AFYPM0856K1ZW. ii. The Appellant had received a sub contract from M/s Navayuga Engineering Company Ltd (M/s Navayuga) holding GSTIN 23AAAACN7396R1ZP. By virtue of agreement dated 19-08-2015 he is executing' certain works contracts pertaining to Narmada Valley Project. The said works is part of the work entrusted to Ms Navayuga Engineering Company Ltd by the Narmada Valley Development Authority of MP Government for executing the work of dam in the State of MP. iii. On 01-07-2017 GST has. been implemented in India replacing excise law, service tax & VAT. By virtue of the enactment the aforesaid contract between the appellant & Ms Navayuga stands governed by GST in the matter of Indirect Taxes. The Government of India has issued certain notifications under the CGST Act which have been co enacted for the State of MP. The relevant notifications are: Serial No.3 item (iii....
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....pply of works contract as defined in clause (119) of section 2 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 Government, state Government, Union territory local authority, a Governmental Authority or a Government Entity 6 Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be. vi. As aforesaid the above entry lays down that the rate of tax applicable to a sub contractor shall, be 12 % if the sub contract work is in full or part a work that supplies to a Government & attracts 12 % tax in the hands of the principal contractor. The entry has been made effective from 25-01-2018. vii. that on 20-03-2020 Officers of DGGSTI visited the place of business of the appellant allegedly by exercising their powers under Section 67 of the Act. It may be noted that the officers have not found any discrepancy till date within the meaning of Section 67(1). Despite the same....
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....ATE AUTHORITY FOR ADVANCE RULING (AAAR) The following question, which is the very same as posed before AAR, have been posed before the Appellate Authority: - "What is rate of tax applicable to a sub contractor, where, he executes works contract pertaining to dam, wherein the principal contractor is liable for tax @ 12 %, for the period from 22-08-2017 to 25-01-2018? 7. GROUNDS OF APPEAL Aggrieved by the rejection of the application for advance ruling, the appellant has tiled this appeal dated 29-03-2021 under Section 100 of the CGST Act, 2017 and MPGST Act, 2017, on the following grounds:- i. The appellant submits that the AAR has passed the order without adducing any reasons, whatsoever. The appellant further submits that the Hon'ble Supreme Court has in L & T vs State of Karnataka given a factual finding. It has laid down that in case where a works contract is sub contracted, the property is transferred directly from the sub-contractor to the employer. Now, in view of the said ruling, the appellant cannot be blamed to have followed the ruling & claimed that his supplies are directly to the Government & therefore is covered by notifications dated 22-08-17 or dated 21-09....
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....ppeal on cryptic findings. iv. The appellant submits that the issue raised by the DGGSTI officers does not come within the ambit of Section 67(1) that requires suppression of transaction of supply or stock or excess claim of Input Tax Credit. While fully admitting the authority of DGGSTI to conduct proceedings u/s 67 in the above circumstances, the appellant submits how the issue of rate of tax of sub contractor where the principal contractor is liable @ 12 % falls within Section 67. To claim that the issue falls within the term "contravention of any provisions of Act or Rules to evade tax" would be overreach of powers granted u/s 57 on present facts. The above issue, in the respectful submission of the appellant is a pure issue / dispute on point of law & exercise of powers u/s 67 in the present facts does not entail any intelligence activity. For the aforesaid reasons the appellant respectfully submits that there is no proceeding pending against the appellant on which an Advance Ruling is sought. The appellant submits that the issue raised in the present Advance Ruling falls outside the ambit of Section 67 (1) because mere issue of letters for payment of differential tax does n....
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....llant can very well be construed being a supply to Government. The appellant specifically relies on the observations of the AAR Maharashtra in the matter of M/s. Shree Construction wherein it has observed that the material gets transferred directly from the sub contractor to the employer. The other conditions regarding civil work & non business / commercial use are also fully satisfied by the work done by the appellant. viii. The appellant submits that the Hon'ble Supreme Court has in a catena of judgments laid down that in the case of works contracts the property is transferred directly to the employer even if there is no privity between the employer & the sub contractor. Kindly see Gannon Dunkerley, Builders Association etc The said observation of the Hon'ble SC comes from M/s. L &T vs State of Karnataka (Civil Appeal No. 2956 of 2007 with Civil Appeal No. 2318 of 2013 and Civil Appeal No. 7241 of 2016, decided on September 5, 2016.) where it lays down in para 19 that if one keeps in mind the above quoted observation of this Court in Builders Assn. of India the position becomes clear, namely, that even if there is no privity of contract between the contractee and the su....
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....f a Civil Court under the provisions of the Code of Civil Procedure, 1908 (5 of 1908). (2) Every such inquiry referred to in sub-section (1) shall be deemed to be a Judicial proceedings" within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860). We find that sub-section (2) of Section 70 is very clear that every such inquiry shall be deemed to be a "judicial proceedings" within the meaning of section 193 and section 228 of the Indian Penal Code. Therefore, we do not agree with the appellant's contention that mere issue of such letter to them by DGGSTI authorities cannot be said to be any proceedings within the meaning of proviso to Section 98(2) of CGST Act, 2017. The Deputy Director, Directorate General of GST Intelligence, Regional Unit, Indore vide letter dated 02.09.2021, informed that they have initiated proceedings of determination of short payment/non-payment of GST against the appellant on the issue of wrong availment of benefit of certain provisions of notification wherein lower rate of GST 12% is prescribed for works contract services pertaining to irrigation work when provided to Government, Governmental authority and local authority....