GST
TRT-2025-
AAR West Bengal
Date:-21-10-22
In:-
Issue Favourable to Tax Payer ?:-
Order Date: 21 October 2022
Fact:
- The applicant, Shree Powertech, is engaged in the business of rendering various works contract‘ services related to modification/construction, renovation & maintenance of roads & highway projects and works connected with and incidental thereto.
- The applicant submits that the Government of India entrusted the development, maintenance and management of National Highway No. 34 including the section from km 48.533 to km 115.272 (approx. 66.72 km) to the National Highway Authorities of India (NHAI).
- The applicant, has been awarded a sub-contract from the main contractor for shifting of electrical utilities which requires removing of old materials from the project site along with erection of materials/lines. The applicant thus has been awarded to carry out a specific part of the work as specified in the agreement made between NHAI and M/s KCC Buildcon Private Limited.
Issue:
- Whether the applicant falls under Heading 9954: Entry No. 3(iv)(a) of Notification No. 11/2017-CT(R) and liable to tax @ 12%?
Order:
- The authorities observed that contract for construction of National Highway pertaining to Nadia District in the state of West Bengal has been awarded to M/s KCC Buildcon Private Limited on Engineering, Procurement, Construction (EPC, for short) mode. The main contractor i.e., M/s KCC Buildcon Private Limited thereafter, has entered into a sub-contract with the applicant for the shifting of electrical utilities in respect of the said project.
- In the case of Gaurish Sharma, the Rajasthan AAR has observed that the proposed activity carried out by the applicant is of shifting/erection of 11 KV & LT lines only and the same cannot be categorised as construction of road as classified under Entry number 3(iv)(a) of the Notification No. 11/2017-CT (Rate) dated 28-6-2017, as amended. The AAR also observed that since such cost of the aforesaid activity will be borne by the Authority or by the entity owning such utility, therefore such payment of above mentioned activity is not the part of the main contract i.e. construction of road as awarded to main contractor by NHAI. Thus, there establish no nexus between the main contract awarded for construction of road by the NHAI and the work proposed to be undertaken by the applicant.
- Thus, the activities being carried out by the applicant as a sub-contractor for shifting of electrical utilities for construction of ‗Proposed 4-Laning of Barasat – Krishnagar Section of NH-34 Project cannot be regarded as composite supply of works contract by way of construction of road as specified under serial number 3(iv)(a) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended.
Download Case Law
