18% GST leviable on services provided for carrying out retrofitting works: AAAR

Case Details: Appellate Authority for Advance Ruling, Tamilnadu PSK Engineering Construction & Co., In re - [2022] 139 taxmann.com 168 (AAAR-TAMILNADU)

Judiciary and Counsel Details

• • M.V.S. Choudary & K. Phanindra Reddy, Member.
  • S. Muthuvenkatraman, Adv. for the Appellant.

Facts of the Case

The appellant was engaged in construction activities including retrofitting, restoration etc. of civil structures predominantly for Government, Public Sector Undertakings and Government entities. It filed an application for advance ruling to determine taxability of works contract services provided to Government Entity for carrying out retrofitting work for strengthening office building against seismic and wind effect. The Authority for Advance Ruling held that 18% GST would be levied as per SL. No. 3(xii) of Notification 11/2017 CT (Rate), dated 28-6-2017. It filed appeal against the order.

AAAR Held

The Appellate Authority for Advance Ruling observed that the appellant would be providing work contract services of retrofitting work for strengthening against seismic and wind effect and the recipient would be a Government Entity engaged in Generation and Distribution of Electricity against fixed Tariff. However, the benefit of concessional GST rate shall not be available for works supplied to Government entity, in respect of a Civil Structure or any other original works meant predominantly for commerce, industry or any other business or profession. Therefore, the ruling of Authority for Advance Ruling was upheld as activities of recipient would be commercial in nature for fixed tariff and 18% GST would be applicable.

List of Cases Reviewed

• • PSK Engineering Construction & Co., In re [2021] 127 taxmann.com 196/87 GST 193 (AAR – Tamil Nadu) (para 11) affirmed.
  • Commissioner of Customs [Import] v. Dilip Kumar & Co. [2018] 95 taxmann.com 327/69 GST 239 (SC) (para 10.3) followed.

List of Cases Referred to

• • Collector of Central Excise v. Rajasthan State Chemical Works 1991 taxmann.com 24 (SC) (para 4.2)
  • CCE v. Mewar Bartan Nirman Udyog 2008 taxmann.com 1583 (SC) (para 4.2)
  • Lloyd Electric & Engineering Ltd. v. State of Himachal Pradesh [2015] 61 taxmann.com 311/52 GST 201 (SC) (para 4.2)
  • Vadilal Chemicals Ltd. v. State of Andhra Pradesh 2006 taxmann.com 2217 (SC) (para 4.2)
  • CIT v. Sutlej Cotton Mills Supply Agency Ltd. [1975] 100 ITR 706 (SC) (para 6)
  • CIT v. PKN Co. Ltd. [1966] 60 ITR 65 (SC) (para 6)
  • Rajputana Textiles (Agencies) Ltd. v. CIT [1961] 42 ITR 743 (SC) (para 6)
  • Cognizance for Extension of Limitation, In re [2020] 117 taxmann.com 748 (SC) (para 7)
  • Commissioner of Customs (Import) v. Dilip Kumar & Co. [2018] 95 taxmann.com 327/69 GST 239 (SC) (para 10.3)