TaxTMI 
TaxTMI 
2023 (1) TMI 229
X X X X Extracts X X X X
X X X X Extracts X X X X
....mission 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 that as the aforesaid firm /party has received this work from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....x 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 under this Chapter shall be binding only - a. On the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for adva....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 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 as a port of a residential complex; ................. 6 - (va)............... (vi)............... (vii)............... (viii)............... (ix) Composite supply of works contract as defined in clause (119) of section 2 of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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 such as educational institutions, hospitals, clinics including veterinary clinics, religious establishments, courts, prisons, museums and other similar buildings 10 995416 Construction services of other buildings nowhere else classified 11 995419 Services involving repair, alterations, additions, replacements, renovation, maintenance or remodeling of the buildings covered above 12 Group 99542 General construction services of civil enginee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 of control and safety systems for railway tracks; xii. construction services of funicular railways and cable car systems; xiii. construction services for airfield runways, including taxiways, aprons and related airport structures other than buildings; xiv. construction of bridges, highway. road and railway tunnels and tunnels for underground railway traffic 7.4 In the instant case under consideration, the applicant has furnished a sample copy of letter of acceptance dated 17.1.2020 issued by RITES LIMITED issued to the said third party / firm, for and behalf of SECL in respect of technical offer opened on 11.7.2019. From the submissions as put forth by the applicant and from the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 in the ordinary course of business. No such details of supply of goods for the intended civil works is forthcoming from the sample letter of acceptance furnished by the applicant. Thus without substantial evidence of the works contracted/undertaken like materials/ goods to be supplied, related schedules/detailed write-up on the civil works, etc., it is practically impossible for this authority to conclude or for that matter to hold that the works as is forthcoming form the "fetter of acceptance" supra, undertaken is 'composite supply' per se. Accordingly, this authority on the basis of records furnished and available on record, is not in a position to conclusively hold that the works, as is forthcoming form the "letter ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ss 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 provides works contract service (other than for plant and machinery) to a company say in the IT business, the ITC of GST paid on the invoice raised by the works contractor will not be available to the said IT Company. From the definition, a work shall be treated as Works Contract if that work is done for land or earth or for immovable property and there is transfer of property in goods involved in the execution of such contract. Immovable property by its very definition means that it cannot be moved and cannot be detached or dismantled from the land or earth and further that dismantling of the same would render it defunct / redundant. Immovable property would include in its ambit land and the things which are attached to or embedded ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thority 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 satisfied in the instant case is that the supply should be by way of 'construction, erection, commissioning, or installation of original works pertaining to railways, including monorail and metro. Original work is defined in Para 2 (zs) of the Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as follows: "original works" means- all new constructions; (i) all types of additions and alterations to abandoned or damaged structures on land that are required to make them workable; (ii) erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise; From the sample letter of acceptance furnished before us by the applicant, and in view of the elaborate discussions above regarding the work undertaken by the applicant as is forthcoming f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he 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 installation of original works pertaining to monorail or metro were exempt till 1-3-2016. Thereafter, the said services provided under a contract entered into prior to 1-3-2016 were exempt. Exemption to the said services was withdrawn in Budget, 2016 with a view to minimize exemptions in the run up to GST as exemptions break ITC chain, increase cost and result in distorted tax structure. However, GST rate on most of the services provided to the Govt. which were exempted under service tax has been reduced from 18% to 12% so as to reduce cost of Govt. projects. Service of transportation of passengers by a monorail or metro rail has been exempted under GST so as to reduce the cost of supply of the said public transportation service to the public. Reduced rate of GST of 12% has been extended to services provided for construction of railways, road, bri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....da 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", Whether the phrase "public carriage of passenger or goods" prevents a proposed feeder line of East West rail Corridor from being included in the definition of 'railways' has repeatedly come up for judicial scrutiny involving the issue akin to the case in hand. The courts generally held that the phrase 'public carriage of passengers or goods' cannot be construed in such manner as to exclude from the ambit of 'railways' other works related to Railway. [Cases relied upon: DMRC v. Municipal Corporation of Delhi, 2008 (103) DRJ 369 (Delhi High Court); Commissioner, Central Excise, Raipur v. Anand Construction,2017 (51) S.T.R. 435 (CESTAT, Principal Bench, New Delhi); SMS Infrastructure Ltd. v. Commissioner, Central Excise, Nagpur, 2017 (47) S.T.R. 17 (CESTAT, West Zonal Bench, Mumbai)] Art. 366 (20) of the Constitution excludes from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 stands fulfilled. 7.9 In view of the above discussions we come to the considered view that it would be appropriate to conclude that the benefit of the entry at SI.no. 3(v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 is amended, vide Notification 01/2018 Central Tax (Rate) dated 25.01.2018 and various other amendments from time to time, lastly amended vide Notification no. 22/2021-Central Tax (Rate) dated 31.12.2021 would be eligible to M/s Agrawal Buildcon, C/o Agrawal Traders, Main Road, Korba, Chhattisgarh, 495677 (GSTIN-22ASSPA1067D1Z7), the applicant, subject to the fact that the works undertaken by them are "Composite supply" and 'Works Contract' as per Section 2 (119) of the Act and if so the applicable GST would be @ 12% effective from 25.01.2018. In cases other than above the same attracts GST @ 18% under the residual entry at Sr. no. 3 (xii) of Notification No. 11/2017 Central Tax (Rate) dated 2....