AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 417
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....he Applicant is a Civil Works Contractor engaged in construction of houses and infrastructure activities to Karnataka Slum Development Board under Pradhan Mantri Awas Yojana (U) -HFA, construction of buildings to Belagavi Smart City Limited under Smart City projects and construction of Police Station under the Karnataka Housing Board, Bangalore. 3. The applicant has sought advance ruling for the clarification on rate of tax on civil works contract/ services executed for as per the Clause (119) of Section 2 of the CGST Act, 2017 on the following works contract services with effect from 01.01.2022- i. Works contract services executed to Karnataka Slum Development Board under the Prime Minister Awaz Yojana, as a main contractor. ii. Works contract services executed to Karnataka Slum Development Board under the Prime Minister Awaz Yojana, as a sub-contractor. iii. Works contract services executed to Belagavi Smart City Limited projects to Belgaum Smart City Corporation Limited, as a main contractor. iv. Works contract services executed to Belagavi Smart City Limited projects to Belgaum. Smart City Corporation Limited, as a sub-contractor. ....
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....vided by a sub-contractor to the main contractor providing services specified in item (iii) or item (iv) above to the Central Government, State Government, Union Territory, a local Authority, a Governmental Authority or a Government Entity is - @ SGST 6% and CGS?' 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". 5.3 The applicant states that as per the above Notification, they have discharged GST @ 12% till 31/12/2021.They have sought clarification for the civil works contract to be executed as main contractor and sub-contractor for the construction of houses including infrastructure work in various slums in the State of Karnataka under Pradhan Mantri Awas Yojana (Urban) - HFA and construction services activities to Smart City Projects to Belagavi Smart City Limited, Belagavi with effect from 01/01/2022. 5.4 The Applicant states that as per the new notification No.15/2021 - Central Tax (rate) dated 18/11/2021 it has been amended as - In the said no....
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....hority or a Government Entity" the words "Union territory or a local authority" shall be substituted; (2) in column (3), in the heading "Description of Service", in item (vii), for the words "Union territory, local authority, a Governmental Authority or a Government Entity" the words "Union territory or a local authority" shall be substituted; (3) in column (5), in the heading "condition", the entries against items (iii), (vi), (vii), (ix) and (x) shall be omitted; Thus, the amending notification No.15/ 2021-Central Tax (Rate) dated 18-11-2021 has replaced the words "Union territory, a local authority, a Governmental Authority or a Government Entity" with the words "Union territory or a local authority" and Governmental Authority or a Government Entity were removed from the notification. Thus the applicability of the notification was confined to "Union territory or a local authority". The term "Union territory or a local authority" Government Authority" "Government Entity" mentioned in the said notification is defined under IGST Act, 2017 and under Notification No.11/ 2017-CT (Rate) as under; "local authority" means- (69) "local....
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....-CT(Rate) dated 28-06-2017, as amended. Karnataka Slum Development Board (KSDB) Karnataka Slum Development Board (KSDB) was established by an Act of State Legislature-named as "Karnataka Slum Areas (Improvement & Clearance) Act 1973" for the welfare and development of slums situated in different towns and districts of Karnataka, and aims to provide basic amenities and houses to slum dwellers and to uplift the living conditions of the urban poor and slum dwellers through social awareness and through income generation activities. The Board was redesignated as Karnataka Slum Development Board in 2010. From the above, it is evident that the Karnataka Slum Development Board, is not constituted under Article 371 of the Constitution and hence it does not fall under the definition of "Local Authority". Karnataka Housing Board (KHB) Karnataka Housing Board (KHB) was established under the Karnataka Housing Board Act 1962 with the primary objective of providing housing accommodation to all sections of the society with special emphasis to economically weaker sections. Going through the provisions of the said Act, it is evident that the said Board is virtuall....
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....d under Article 53(3)(b) and Article 154 (2)(b) of the Constitution respectively. Such a statutory body, corporation or an authority as a juristic entity is separate from the State and cannot be regarded as Central or State Government and also do not fall in the definition of 'local authority'. Thus regulatory bodies and other autonomous entities which attain their entity under an act would not comprise either government or local authority. In view of the aforesaid definition of 'local authority', it is obvious that Karnataka Slum Development Board, Karnataka Housing Board and Belagavi Smart City Limited do not constitute "local authority". In view of the foregoing, the activity of the applicant falls under Sl.No.(xii) of Heading 9954 (Construction Services) which reads as "Construction Services other than (i),(ia),(ib),(ic),(id),(ie),(if),(iii),(iv),(v),(va),(vi),(vii),(viii),(ix),(x) and (xi) above, attracting GST of 18% (CGST-9% and SGST-9%), irrespective of the fact that services are provided as 'contractor' or 'sub-contractor'. PERSONAL HEARING / PROCEEDINGS HELD ON 10-02-2022 7. Shri Sri B. Shrinivasa, Chartered Accounta....
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....vices Tax Act, 2017, supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,- (a)-------- (b)-------- (c) a civil structure or any other original works pertaining to the "In-situ redevelopment of existing slums using land as a resource, under the Housing for All (Urban) Mission/ Pradhan Mantri Awas Yojana (Urban);'; 6 Since the applicant is into construction of 888 houses including infrastructure works in the slums of Ramanagara city under PMAY (U)-HFA scheme, the same is covered under the above mentioned entry and the same is taxable at 12% GST. 12. Notification No.03/2022-Central Tax (Rate), dated 13.07.2022 was issued to bring amendment to Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 as below: In the said notification, - (A) in the Table, - (I) against serial number 3, in column (3), - (a) items (iii), (iv), (v), (va), (vi) and (ix)and the corresponding entries relating thereto in columns (4) and (5) shall be omitted; (b) against items (vii) and (x), for the entry in column (4), the entry "6" shall....
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.... as per the definition mentioned in para 13 supra. Since the applicant is into construction of Magadi road police station, the services provided by the applicant are covered under entry 3(xii) of Notification No.11/2017 - Central Tax (Rate), dated 28.06.2017 further amended vide Notification No.03/2022-Central Tax (Rate) dated: 13.07.2022 and is taxable at 18% GST, and the same is reproduced below: SI.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition 3 Heading 9954 (Construction services) (xii). Construction services other than (vii), (viii) above 9 15. The applicant states that it has also entered into a contract agreement with Belagavi Smart City Limited for Development of modern market (Kalamandir)' at Tilakwadi in Belagavi City. Belagavi Smart City Limited (referred as BSCL) is a company incorporated in pursuance of smart city mission statement by Government of Karnataka and the City Corporation, Belagavi as the ULB on 50:50 shareholding basis. The company is a Special Purpose Vehicle created for implementation of smart city project in the city of Belagavi. Hence Belagavi Smart City Limited is nei....