2018 (6) TMI 111 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – 2018 (13) G. S. T. L. 251 (A. A. R. – GST), [2018] 2 GSTL (AAR) 103 (AAR) – Classification – Nature supply – divisible contract [Supply of goods & Supply of Services] or an indivisible contract [works contract] – Construction of power lines, erection of transmission towers and transformers – single composite contract, but with three connected agreements for Supply of Materials, Erection and Civil Works respectively – KPTCL is a Government body or not – Whether the contract, executed by them for KPTCL, is a divisible contract [Supply of goods & Supply of Services] or an indivisible contract [works contract]? – Whether the tax rate of 12% [CGST-6% + SGST-6%] is applicable to the contract, in pursuance of N/N. 24/2017-Central Tax (Rate) dated 21.09.2017?
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Held that:- The composite supply of works contract as defined at Section 2 clause 119 of CGST Act 2017 is treated as supply of service in terms of serial no.6, Schedule
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e Government – Further M/s KPTCL, who awarded the contract to the applicant, are registered under Companies Act 1956 as a company and is a separate entity. Therefore it can not be considered as the State Government or a State Government Authority. Hence the applicant is not entitled for the benefit of the concessional rate of GST @ 12%, in terms of N/N. 24/2017-Central Tax (Rate) dated 21.09.2017.
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Ruling:- The contract contract entered by the applicant is of the nature of 'indivisible' and squarely falls under the works contract, which is a service – The Applicant is not entitled for the benefit of concessional rate of GST @12% in terms of Notification No.24/2017-Central Tax (Rate) dated 21.09.2017. – Advance Ruling No. KAR ADRG 3 of 2018 Dated:- 21-3-2018 – MR. HARISH DHARNIA MEMBER AND DR. RAVIPRASAD, MEMBER RULING 1. M/s Skilltech Engineers 6s Contractors Private Ltd., (hereinafter referred to as 'Applicant') holding GSTIN number 29AACCS5473FIZ0, having registered add
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rms and conditions are commonly applicable to all the three agreements. 3. The applicant sought advance ruling on the following questions/issues that 1. Whether the contract, executed by them for KPTCL, is a divisible contract [Supply of goods & Supply of Services] or an indivisible contract [ works contract]? 2. Whether the tax rate of 12% [CGST-6% + SGST-6%] is applicable to the above contract, in pursuance of Notification No.24/2017-Central Tax (Rate) dated 21.09.2017? PERSONAL HEARING PROCEEDINGS HELD ON 09.01.2018. 4. Sri. L Arun Kumar, Executive Director of the applicant concern appeared and presented the following: (a) That a single bid/tender was called for by KPTCL, for composite activities of Supply of material, Erection of the same & Civil Works associated with the erection. (b) That three separate agreements were entered into for the three different activities, after identifying the successful bidder. (c) That the question on which advance ruling has been sought for
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Whether the tax rate of 12% [CGST-6% + SGST-6%] is applicable to the above contract, in pursuance of Notification No.24/2017-Central Tax (Rate) dated 21.09.2017? 7. In view of the above the issues before us to decide are (1) whether the contract entered by the applicant falls under works contract or not and (2) Whether the applicant is entitled for concessional rate of GST under Notification No.21/2017-CentralTax (Rate). 8. Section 2 clause 119 of CGST Act'2017 defines works contract as a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract; 9. The composite supply of works contract as defined at Section 2 clause 119 of CGST Act'2017 is treated as supply of service in terms of serial no.6, Schedule
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ighlighted the words 'State Government'. Also on the next page they have submitted a bullet point KPTCL is covered under the definition of State Government . 12. The Applicant therefore contends that they are providing services to 'State Government' and are thus eligible for the tax rate enumerated in the aforesaid notification. 13. A statutory body, corporation or an authority created by the Parliament or a State Legislature is neither 'Government' nor a local authority'. Such statutory bodies, corporations or authorities are normally created by the Parliament or a State Legislature in exercise of the powers conferred under article 53(3)(b) and article 154(2)(b) of the Constitution respectively. It is a settled position of law (Agarwal v. Hindustan Steel AIR 1970 Supreme Court -1150) that the manpower of such statutory authorities or bodies do not become officers subordinate to the President under article 53(1) of the Constitution and similarly to the Gover
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