The Chhattisgarh Authority for Advance Ruling (AAR), ruled that Civil works for construction of Rail Infrastructure for South Eastern Coal fields (SECL) Kusmunda Project is composite supply and attracts 12% GST.
An Advance Ruling under Section 98 of the Chhattisgarh GST Act, 2017 sought from M/s Agrawal Buildcon, the applicant in respect of the following questions: -What should be the rate of tax on their work, will it be 12% or 18% and What is the current tax rate of tax on their work, Is there any change on rate of Tax since 1. 1.2022 or till date.
The applicant mainly deals with 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 same kind of work.
Accordingly, the applicant has filed the instant application, 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 in connection with construction of rail infrastructure for providing Railways siding at SECL Kusmundo Project, for dispatch of washed and raw coal.
The applicant has further informed that the work order for above project is from RITES Ltd. (A Government of Indio Enterprise, Ministry of Railway) and is provided to the said party on behalf of SECL Kusmunda Project acting as principal employer.
It has further been submitted by the applicant that as the aforesaid firm /party has received this work from SECL Kusmunda project, the liability of builty and payment is of SECL and that according to SECL such works comes under 12% tax slab, whereas the said party has sent bill for 18% to SECL but SECL has refused to accept the same.
The applicant’s contention in the matter is that the said work should come under 18% tax slab as per CBEC guidelines. The applicant has further informed that this has led to confusion between the said party and SECL. Further that as SECL is demanding for bill with 12% tax rate as per the protocols of SECL, to avoid any future liability for the said work if it is allotted to them, the applicant has requested for clarification in the matter.
A Two Member Bench of the Authority consisting of Sonal K. Mishra, Joint Commissioner and Rajesh Kumar Singh, Additional Commissioner,observed that “The benefit of entry at Sl.no. of Notification No. 11/2017 would be eligible to M/s Agrawal Buildcon and that the works undertaken by them qualifies as “Composite supply” as stipulated under Section 2 (30) of CGST Act. 2017 as also the said work undertaken satisfies the condition of being ‘Works Contract’ as per Section 2 (119) of the Act, and if so the applicable rate of GST would be at 12% effective from 25.01.2018.”
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