The Tamil Nadu Authority for Advance Ruling (AAR) ruled that the civil contracts provided by the applicant to the Indian Institute of Technology, Madras attract 18% Goods and Services Tax (GST).
The applicant Esvee Constructions, is a contractor who has been awarded a contract by IIT Madras for ‘addition and alteration of D1 type quarters 45 units at Indian Institute of Madras’ for an amount of Rs.4,55,48,650 inclusive of GST at 12% and other applicable taxes, duties and levies.
The Applicant’s customer Indian Institute of Technology, Madras claimed that the rate of GST is 12% for Civil Contract Services with effect from 01.01.2022 even after amendment to Notification No.11/2017 C.T.(Rate) vide Notification No.15/2021 C.T.(Rate) dated 18.11.2021.
The bench considered the submissions made by the applicant in the advance ruling application and the additional submissions made during the personal hearings and the comments furnished by the State Tax Authorities.
The applicant filed an advance ruling application for determination of the liability to pay tax on any goods or services or both in respect of civil contract services undertaken to their customer IIT Madras, within the meaning of that term as per Section 97(2)(e) of Goods and Services Tax Act, 2017.
The panel of N. Usha and R. Gopalasamy observed that Section 3 (j) (iii) of The Institutes of Technology Act, 1961 that IIT, Madras is a ‘Society’ registered under the Societies Registration Act, 1860, conferred with the status of ‘body corporate’ by Section 4 (1) of the said Act for the promotion of science, education, diffusion of useful knowledge, etc. under the control of Central Government.
However, after omission of ‘Government Entity’ from the description of service under the vide Notification No.15/2021 C.T (Rate) dated 18.11.2021 read with Notification No.22/2021 c.T (Rate) dated 31.12.2021 with effect from 01.01.2022, the services of the applicant is covered under serial number 3 (xii) of Notification No. 11/2017 C.T (Rate) dated 28.06.2017 and attract CGST of 9%.
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