The West Bengal Authority for Advance Ruling has ruled that the subcontractors are not eligible for GST concession rate on shifting electrical utilities which was a part of highway construction by the main contractor.
The applicant Powertech which was engaged in the business of rendering various works contract services related to modification, renovation & maintenance of roads & highway projects had received a sub-contract from KCC Buildcon Private Limited who was the main contractor for shifting of electrical utilities which was the part of main work completing the balance work for National Highway Authorities of India.
The applicant had sought advance ruling as to whether the activity carried out by the applicant falls under Heading 9954: Entry No. 3(iv)(a) of Notification No. 11/2017-CT(R) and liable to tax @ 12%. Which means whether it falls under composite supply and whether the applicant was eligible for GST concession rate.
Rishabh Mishra, on behalf of the applicant submitted that the work proposed to be carried out by the Applicant in the present case was nothing more than the obligations of the main Contractor, which consists of construction as well as completion of a road.
He further submitted that the GST concession rate should be applicable on the applicant as that of the main contractor for providing the service of a works contract in relation to construction of roads as both goes to National Highway Authorities of India.
He further contended that the applicant would be eligible for 12% (6% CGST + 6% WBGST) GST concessional rate.
Singur Division on behalf of revenue submitted that activities would not fall under Sl. No. 3(iv) (a) e Notification No. 11/2017-Central Tax (Rate) as the applicant had the work of shifting of electrical utilities which would not be eligible to concessional rate under above mentioned notification, as it was allowed only in case of works contract of road, bridge, tunnel or terminal for road transportation for use by general public.
The West Bengal Authority for Advance Ruling (AAR) of Brajesh Kumar Singh (Joint Commissioner) and JoyjitBanik (Senior Joint Commissioner) observed that providing services of shifting of electrical utilities only could not be regarded as services by way of construction of road and also held that the work undertaken by the applicant would not be eligible to concession under 3(iv)(a) of the Notification No. 11/2017-Central Tax (Rate).
The Authority held that the activities being carried out by the applicant as a subcontractor could not be regarded as a composite supply of works and GST concession as main contractor would not be applicable on the applicant.
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