TaxTMI 
TaxTMI 
2023 (11) TMI 592
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....expression 'GST Act' would be a common reference to both CGST Act and TGST 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/- under SGST and Rs. 5,000/- under CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided nor are pending before any authority under any provisions of the CGST/TGST Act'2017. The application is, therefore, admitted after examining it and the records called for and after hearing the applicant as per section 98(2) of TGST Act'2017. 4. BRIEF FACTS OF THE CASE: 4.1 The Applicant M/s Immense Construction Company is a Firm registered under the Goods and Services Tax Act, 2017; 4.2 It undertakes Contracts/ Sub-Contracts of the entire work for. Operation and Maintenance of Water Supply Projects / Sewerage Projects/Facilities; 4.3 The Applicant has been awarded a contract by M/s. THE INDIAN HUME PIPE COMPANY LTD. (herein after referred to as "Principal Contractor") vide Letter No. IHP-HIM/ Balkonda: TDWSP/O&M/Amendment-1/2022-23 dat....
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....tion (the present work falls under Serial No. 5 of 12th Schedule being water supply for domestic purpose); d) That the services are covered by the Entry No. 3 of Notification No 12/2017 Central Tax (Rate) dated 28/06/2017; e) That the Applicant draws support from Circular No. 147/16/2011-Service Tax dated 21st October, 2011 issued under the erstwhile Service Tax regime wherein under similar situations the Department had clarified that the services provided by the sub-contractors to the main Contractors in relation to those very Projects which are classifiable as Infrastructure Projects Works Contract Services, then they too will get the benefit of exemption so long as they are in relation to the very same Infrastructure Projects I.e. WCS; f) That the Applicant also draws support from the observations of the Hon'ble Apex Court in the case of State of Andhra Pradesh vs. Larsen and Toubro 17 VST 1(SC) wherein it was submitted by the Company and upheld by the Court that the transfer of property in goods, as effected by the sub-contract, resulted in direct sale to the Contractee and consequently it did not Involve multiple sales either in favour of the mai....
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....oods component is more than 25% will fall under 12% rate." This memo follows the Notification No.2 of 2018 dt: 25-01-2018, wherein the new entry 3A for chapter 99 stipulate that such contract are taxed at NIL rate. 2. That, the applicant herein being a sub-contractor to the IHP is eligible for the said exemption under GST. 3. During the course of hearing the applicant was requested to file relevant documentary evidence, i.e., a. The latest purchase order for the year 2023-24. b. Evidence of privity of contract wherein the contractee is in know of the involvement of applicant in the execution of the contract. 4. Further, the Authorised Representative/Applicant M/s. Immense Construction Company, Rangareddy, reiterated that their case /Similar Case is not pending in any proceedings in the applicant's case under any of the provision of the Act and have not already decided in any proceedings in the applicant's case under any of the provisions of the Act. 7. DISCUSSION & FINDINGS: During the course of hearing the applicant was requested to file relevant documentary evidence, i.e., a. The latest purchase order for the year 2023-2....
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....ry. Thus against Serial no. 3 in Col. 3 for item (ix) and (x) the sub-contractors are included in the entry for claiming lower rate of tax provided that their services have been procured by the main contractor in relation to a work interested to it by the Central Government, State Government, Union Territory, or Local Authority as the case may be. Though the CGST Act, does not define a sub-contractor, however Notification 11/2017 as amended makes a mention of sub-contractor whose services are procured by a main contractor. Thus the Scheme of the Act clearly identifies a sub-contractor as a supplier of works contract services to the main contractor. This concept is at total variance with the concept existing in the earlier "Sales Tax Regime" where in the taxable event was transfer of property in Goods from contractor to the contractee; and the sub-contractor was recognized as a taxable person having privity in the contract between a main contractor and the contractee. Hence in the Sales Tax Regime, there was no supply of services i.e., deemed sale from the sub-contractor to the main contractor but there was a single sale by both of them to the contractee. Therefore, the Hon'bl....
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.... Corpnv. CIT (2010) 8 SCC 739-193 Taxman 193=326 ITR 642 (SC) CCE 1.Doaba Steel Rolling Mills (2010) 14 SCC 751-269 ELT 298 (SC) Ranbaxy Laboratories Ltd. v. UOI(2011) 10 SCC 292-33 STT 326-15 taxmann.com 95-273 ELT 3 (SC) CIT v. Calcutta Knitwears (2014) 6 SCC 444 = 223 Taxman 115 43 taxmann.com 446-362 ITR 673 (SC) PradipNath Gala STO (2015) 80 VST 375 (SC 3 member bench) Voltas Ltd. v. State of Gujarat (2015) 7 SCC 527-51 GST 357-57 taxmann.com 16=80 VST 12 (SC3 member bench) Shabina Abraham v. CCE (2015) 10 SCC 770 = 52 GST 30=61 taxmann.com 95 = 322 ELT 372-83 VST 450 (SC) CCE v. Larsen and Toubro Ltd. (2015) 52 GST 1 = 60 taxmann.com 354 = 84 VST 403 (SC)=(2016) 1 SCC 170 CC v. Dilip Kumar & Co. (2018) 9 SCC 1=95. Thus the issues identified by the AAR to be addressed at the beginning of the discussion are answered as follows: 1. Whether the supply of works contract services by a contractor and his procurement works contract services constitute two independent taxable events under the CGST Act. Under the scheme of the CGST Act there are two independent taxable events, one between the sub-contractor and the main contractor and the next between the main cont....