TaxTMI 
TaxTMI 
2023 (1) TMI 229
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....th construction work and it has further been their submission that a firm / party had received a work order from RITES Ltd., and that the applicant too wishes to participate in the some kind of work. Accorciingly, they have filed the instant ARA-01. in order to have a clear view about the tax rate of the civil works for the construction of Kusmunda S&T work and other TMS & Crew rest room at various five locations within 2.8Km length of siding area in connection with construction of rail infrastructure for providing Railways siding at SECL Kusmunda Project, District Korba, Chhattisgarh for dispatch of washed and raw cool. The applicant also enclosed a copy of the said Letter of Acceptance pertaining to the third party /firm referred to above. 3. Contentions of the applicant: - 3.1 The applicant has further informed that the work order for above project is from RITES Ltd. (A Government of India Enterprise, Ministry of Railway - An ISO 9001 Company) and is provided to the said firm/ party on behalf of SECL Kusmunda Project acting as principal employer and invoice is generated in GST no. of SECL by the working party (firm). 3.2 It has further been submitted by the applicant th....
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....e provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory. Section 97(2) of CGST Act, 2017 stipulates that: - The question, on which the advance ruling is sought under this Act, shall be in respect of- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. Further 103 of CGST Act, 2017 stipulates about the ruling pronounced as under: - The advance ruling pronounced by the Authority or the Appellate Authority und....
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.... Description of Service Rate (per cent.) Condition (1) (2) (3) (4) (5) 1 Chapter 99 All Services 2 Section 5 Construction Services 3 Heading 9954 (Construction services) (i)............. (ia)............. (ib)............... ..................... ...... ............. (ii) [***] - - (iii) Composite supply of works contact as defined in clause (119) of Section 2 of the.......... (a)................ (b)................ (c)................. 6 [***] (iv) Composite supply of works contact........... (a)................ (b)................ (c)................. (d)................. (da)................. ................. 6 - (v) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above supplied by way of construction, erection, commissioning, or installation of original works pertaining to, - (a) railways, (including monorail and metro: (b) a single residential unit otherwise than ....
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....o. Chapter, Section, Heading or Group Service Code (Tariff) Service Description (1) (2) (3) (4) 1 Chapter 99 All Services 2 Section 5 Construction Services 3 Heading 9954 Construction services 4 Group 99541 Construction services of buildings 5 995411 Construction services of single dwelling or multi dwelling or multi-storied residential buildings 6 995412 Construction services of other residential buildings such as old age homes, homeless shelters, hostels and the like 7 995413 Construction services of industrial buildings such as buildings used for production activities (used for assembly line activities), workshops, storage buildings and other similar industrial buildings 8 995414 Construction services of commercial buildings such as office buildings, exhibition and marriage halls, malls, hotels, restaurants, airports, rail or road terminals, parking garages, petrol and service stations, theatres and other similar buildings 9 995415 Construction services of other non-residential buildings su....
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................ ........... 995421 General construction services of highways, streets, roads, railways, airfield runways, bridges and tunnels This service code includes construction services i. for formations of highways, including elevated highways, roads, streets, other vehicular and pedestrian ways and open car parks; ii. footpaths, traffic-calming structures, cycle tracks, etc.; iii. vehicular and pedestrian underpasses and overpasses; iv. construction or restoration of road surface and parking lots with asphalt, concrete: etc.; v. installation services of crash barriers, low separating walls, traffic signs, etc.; vi. creation, maintenance and signposting of tracks and paths; vii. painting services of markings on roods, parking lots and similar surfaces; viii. railway roadbeds for long-line and commuter rails, street tramways and underground or elevated urban rapid transit systems; ix. railway electrification structures including laying services of ballots, and rails; x. installation services of switch gear, points and crossings; xi. construction services o....
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....th, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply; On perusal of the copy of letter of acceptance issued by RITES LIMITED supra, furnished by the applicant it is seen that the intended works to be undertaken by the applicant is civil works for of Construction of Kusmunda S&T block cabin, East and West Panel buildings for S&T work and other TMS & Crew rest room at various five locations within 2.8Km length of siding area in connection with construction of rail infrastructure for providing Railways siding at SECL Kusmunda Project, District Korba, Chhattisgarh for dispatch of washed and raw coal. Now for the instant supply of Civil works to be undertaken by the applicant to be categorized as "composite supply" there needs to be supply of goods and services and the same should be natural bundle of supply of both and supplied in conjunction with each other ....
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.... treated as a Works Contract for the purposes of GST. As per Para 6 (a) of Schedule II to the CGST Act, 2017, works contracts as defined in section 2(119) of the CGST Act, 2017 shall be treated as a supply of services. Thus, there exist a dear demarcation of a works contract as a supply of service under GST. Besides this, as per section 17(5) (c) of the CGST Act, 2017, input tax credit shall not be available in respect of the works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of works contract service. Thus, ITC for works contract also stands restricted and can be availed only by one who is in the same line of business and is using such services received for further supply of works contract service. For example, a building developer may engage services of a subcontractor for certain portion of the whole work. The subcontractor will charge GST in the tax invoice raised on the main contractor. The main contractor will be entitled to take ITC on the tax invoice raised by his sub-contractor as his output is works contract service. However, in case the main contractor pro....
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....s Contract' is a prerequisite and can in no way be ignored with. Under GST, only those defined works carried out on any immovable property is covered under 'Works Contract'. Thus, although the intended "civil works for of Construction of Kusmunda S&T block cabin, East and West Panel buildings for S&T work and other TMS & Crew rest room at various five locations within 2.8Km length of siding area in connection with construction of rail infrastructure for providing Railways siding at SECL Kusmunda Project, District Korba, Chhattisgarh for dispatch of washed and raw coal", by its very description as is forthcoming from the letter of acceptance appears to be an immovable property, there must also be transfer of property in goods involved in the execution of such contract. Accordingly, this authority on the basis of records furnished before and available on record, comes to considered conclusion that the benefit of Notification supra is eligible only when the said civil work intended to be undertaken by the applicant qualifies being treated as 'Works Contract' as defined under Section 2 (119) of CGST Act, 2017, as discussed herein. 7.7 The other prerequisite to be....
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....Agenda Note, It was indicated therein that detailed justification for the recommendations will be circulated separately in Volume - 2 of the Detailed Agenda Note. 2. The detailed justification for the recommendations of the Fitment Committee on Services are attached as Annexure 1. 3. The recommendations of the Fitment Committee are placed before the Council for consideration and approval. Sl.No. Represented By Proposal Justification Comments of Fitment Committee 4 Hon'ble CM Maharashtra and Secretary, Ministry of Housing and Urban Affairs Request to reduce the GST rate from 18% to 12% for composite supply of works contract supplied by way of construction, erection, commissioning or installation of original works pertaining to Metro rail. Levy of high rate of GST adversely affects the financial position of metro companies. The metro companies facilitate easy and quick movement of people and has positive impact on economic growth, apart from reduction in traffic congestion, pollution, road and parking cost. Reduces both cost and time of travel and improves competitiveness of the city. Services provided by way of construction, erection, commissioning, or ....
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....ies, ships, boats and rafts which are used on any canal, river, lake or other navigable inland waters for the purpose of the traffic of a railway and owned, hired or worked by a railway administration, but does not include- (i) A tramway wholly within a municipal area; and (ii) Lines of rails built in any exhibition ground, fair, park, or any other place solely for the purpose of recreation. Further the Railways Act, 1989. distinguishes between, but covers, Government Railway under Section 2 (20) and Non-Government Railway under Section 2(25) of the Act. it, therefore, includes scope for railways under both Government and private administrations. In the instant case as is forthcoming from the sample letter of acceptance furnished by the applicant for the intended civil works to be undertaken by them, issued by RITES the subject of work allotted is "civil works for of Construction of Kusmunda S&T block cabin, East and West Panel buildings for S&T work and other TMS & Crew rest room at various five locations within 2.8Km length of siding area in connection with construction of rail infrastructure for providing Railways siding at SECL Kusmunda Project,....
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....ort management to operators in India and abroad. RITES has since diversified into planning and consulting services for other infrastructure, including airports, ports, highways and urban planning. As the proposed work is in connection with construction of rail infrastructure for providing Railways siding at SECL Kusmunda Project, District Korba, Chhattisgarh for dispatch of washed and raw coal, the same can reasonably be held to be pertaining to Railways. The term "pertaining to Railways", as appearing at S.no. 3 (v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended, vide Notification 01/2018 Central Tax (Rate) dated 25.01.2018 is more expansive and includes other establishments other than Indian Railways. Needless to mention here that there is no stipulation in the said entry claimed for exemption supra, that this work must be executed to the Railways but it is sufficient that it must be "pertaining to Railways", meaning therein that the supplier and the recipient is immaterial. Thus, we are of the considered opinion that the work intended to be undertaken by the applicant for RITES Limited pertains to railways and accordingly this pre-requisite stan....