SHREEJI EARTH MOVERS (AAAR-GUJARAT)
SHREEJI EARTH MOVERS (AAAR-GUJARAT) :
BRIEF : Since appellant-assessee is not engaged directly as a contractor or as a sub-contractor of main contractor by State Government of Gujarat for supply of works contract pertaining to irrigation department, therefore, appellant merits entry at Heading No. 9954 and it is liable for GST rate at 18 per cent under Entry No. 3(ii) of Notification No. 11/2017-Cental Tax(Rate), dated 28-6-2017
MATTER : Irrigation Work – Sub-sub Contract – Classification – Tax Liability – Heading No. 9954 – Appellant-assessee is engaged in providing works contract service directly to sub-contractors who execute contract with main contractor for original contract work with irrigation department – JSIW Infrastructure Pvt. Ltd received original contract from irrigation department (State of Gujarat) for construction of pumping station and supplying and laying MS pipeline and maintenance of commissioned project for 10 years – JSIW Infrastructure executed same contract with Radhe Construction – Further Radhe Construction executed same contract with appellant – Appellant seeks advance ruling on what is rate of tax liability applicable on services provided and classification of services provided by appellant (sub-contractors) to main contractor pertaining to irrigation – GAAR held that GST rate on subject supply is 18 per cent for services supplied by sub-contractor to sub-contractor and supply merits entry at Heading No. 9954, Entry No. 3(ii) of Notification No. 11/2017-Central Tax(Rate), dated 28-6-2017.
HELD: It is clear that appellant is not engaged directly as a contractor or as a sub-contractor of main contractor by State Government of Gujarat for supply of works contract pertaining to irrigation Department – Further, there is no direct nexus between appellant and Governmental authority (irrigation Department) since documents reveal that appellant is supplying service on basis of work order of a sub-contractor i.e. Radhe Construction and not directly from main contractor, JSIW Infrastructure Pvt Ltd. who had originally received contract from Irrigation department of State Government of Gujarat – Therefore, appellant is not eligible for concessional rate of GST at 12 per cent in terms of Notification No. 20/2017-Central Tax(Rate), dated 22-8-2017 and Notification No. 01/20, dated 25-1-2018 as activity undertaken by appellant is not covered under said notification and appellant is liable to discharge tax rate CGST at 9 per cent and CGST at 9 per cent under Entry No. 3(ii) of Notification No. 2017-Central Tax(Rate), dated 28-6-2017 further amended vide Entry No. 3(xii) of Notification (supra) as amended – In view of foregoing, appeal filed by appellant is rejected and Advance Ruling No. GUJ/GAAR/43/2021, dated 11-8-2021 of Gujarat Authority for Advance Ruling is upheld.
