Classification of service— The present application has been filed by the applicant seeking an advance ruling in respect of the following question—

1. Whether the activity to be carried by the applicant shall be classified as supply of goods or services or a composite supply of ‘works’ contract’?

2. Whether the activity should be classified as Composite Supply of works contract under Entry 3(x) of Notification No. 11/2017-CT (R) dated 28.06.2017 i.e. provided by a sub-contractor to the main contractor providing services specified in item (vii) above to the Central/State Government, Union territory, a local authority, a Governmental Authority or a Government Entity taxable at the rate of 5%?

The applicant is engaged in drilling and blasting works using Industrial explosives and other materials.

Applicant has submitted that, M/s CIDCO has given a contract to M/s Balajee Infratech and Constructions Pvt. Ltd. (Balajee) for Drilling, Blasting, Mucking and allied job and reclamation work of the land development for Navi Mumbai International Airport land Development work site at the Vahal Ulwe site of M/s CIDCO. Thereafter, M/s Balajee has subcontracted with the Applicant, to provide only drilling and blasting operation with the usage of explosives for extraction of boulders at the aforementioned site of M/s CIDCO. The works being done by the applicant involves drilling and blasting operation with the use of explosives.

Notification No.11/2017-CT (Rate) dated 28/6/2017 was amended vide Notification No. 15/2021-CT(R) dated 18.11.2021 (with effect from 01.01.2022) and in Sr. No 3 (vii) of the amended Notification No. 15/2021—CTR dated 18.11.2021, the words “Governmental Authority” and “Government Entity” have been deleted. Therefore, in view of the above discussions, with effect from 01.01.2022, the impugned services supplied by the applicant will not be covered under Sr. No. 3 (x) of Notification No. 11/2017-CT (Rate) dated 28/6/2017, as amended.

Held that—  The activity to be carried by the applicant shall be classified as a composite supply of ‘works’ contract’. It does not classified as Composite Supply of works contract under Entry 3(x) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 i.e. provided by a sub-contractor to the main contractor.