The Uttar Pradesh Authority for Advance Ruling (AAR) presided by Mr. Abhishek Chauhan (Central Tax) and Mr. Vivek Arya (State Tax) has held that services supplied to Rail Vikas Nigam Limited (RVNL) are not works Contract.
The applicant, M/s HYT Engineering Company Pvt. Ltd one of the membersofthe Joint Venture (JV), made a bid for the tender of Rail Vikas Nigam Limited (RVNL) for the construction of a PEB shed, structure, building, water supply, and general electrical works, OHE works, signal and telecommunication works and supply, installation and commissioning of machinery and plant in connection with setting up of Electric Loco Shed.
The applicant engaged in providing works contract services as a sub-contract to JV for the original works of RVNL.The applicant approached the AAR for clarifying whether the works awarded to the applicant are a composite supply of works contract services and whether the benefit of Sl. No. 3(v)(a)of Notification 11/2017 is applicable to subject work.
The Authority observed that the activities of installation, commissioning, testing, supplying mechanical work, and electrical work are not in respect of immovable property as the Machinery and plant are attached to a concrete base to prevent vibration/wobble-free operation. Hence, the said supply of goods/services by the applicant to JV is not a works contract.
The Authority has held that sl. No. 3(v) of Notification No. 11/2017-Central Tax (Rate), as amended prescribed CGST rate at 6% for the composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017supplied by way of construction, erection, commissioning, or installation, of original works of railways, including monorail and metro which appliesto works contract. And hence the supply entrusted to the applicant by the JV agreement is not a works contract, the applicant is not entitled to the benefit of said notification.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
