For Full Access To All Latest Judgments on GST
Click Here To Subscribe Now
Take a tour of our GST Library

Steel Authority of India Ltd., SAIL is a 'Government Entity', therefore the tax rate applicable to value of contract (works contract service only) between the Applicant and M/s SAIL is leviable at 12% in terms of Entry no 3(vi) (a) or (b) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, as amended.

Classification of service— In the instant case, the applicant had entered in to a Memorandum of Understanding (MoU) on 13-08-2018 with M/s. Steel Authority of India Limited (SAIL) wherein the Applicant has been entrusted/ awarded the work relating to planning, designing and construction of 'ISPAT POST- GRADUATE MEDICAL INSTITUTE AND SUPER SPECIALTY HOSPI I AL at Rourkela Steel Plant (RSP), Rourkela.

It has been contended by the Applicant that the impugned supply is a composite supply of works contract service which is being supplied to a Government Entity i.e. M/s. SAIL, Rourkela for construction of ISPAT Post Graduate Medical Institute and Super Specialty Hospital and accordingly the same would merit entitlement for concessional rate of GST @ 12% [CGST @ 6% + SGST @ 6%] in terms of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 (as amended).

Questions raised for advance ruling are as follows—

a) The Authority for Advance Ruling vide its Order No 07/0DISHA-AAR/2020-21 34 TAXLOK.COM 162 dated 09.03.2021 held that Steel Authority of India Ltd. (SAIL) is a Government Entity and the construction work of ISPAT POST- GRADUATE MEDICAL INSTITUTE AND SUPER SPECIALLY HOSPITAL, at Rourkela is a work entrusted by Central Government; to SAIL, therefore M/s URC Construction (P) Ltd. executing the work under the Letter of Award between the Applicant and M/s URC Construction (P) Ltd. is leviable to a tax rate @ 6% each on Central GST and SGST. Therefore, the Applicant being the Principal Contractor, whether the tax rate applicable to value of contract between the Applicant and M/s SAIL is also leviable at 12% [CGST @ 6% + SGST @ 6%] in terms of Entry no 3(vi) (a)or (b) of Notification No. 11/2017-Central Tax (Rate), dated 23-6-2017?

b) Where the tax rate is determined at 12 % applicable to the value of works contract services provided by the Applicant to M/s SAIL, whether the rate of taxes so determined would be applicable to the entire value of the works contract covered by Memorandum of understanding dated 13.08.2018?

c) As the Applicant has till date of the ruling have paid 18% of tax on its Tax invoices raised to M/s SAIL pertaining to the underlying subject contract, whether the taxes to the extent of 6 % (18% paid-12% as per order) becomes taxes paid over and above the liability to pay as tax and can be regarded as tax in excess?

d) For that matter whether the excess tax to the extent of 6% so paid would be eligible to be refunded under Section 54 of the CGST Act, 2017?

e) What would be the proper procedure under GST provisions for claiming the excess amount so paid?

Held that— Steel Authority of India Ltd., SAIL is a 'Government Entity', therefore the tax rate applicable to value of contract (works contract service only) between the Applicant and M/s SAIL is leviable at 12% [CGST @ 6% + SGST a 6%] in terms of Entry no 3(vi) (a) or (b) of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017, as amended.