Facts –

• The Applicant, M/s Agrawal Buildcon, mainly deal with construction work. The applicant wishes to participate in work order from RITES Ltd. (A Government of India Enterprise, Ministry of Railway - An ISO 9001 Company) and is provided to the said firm/ party on behalf of SECL Kusmunda Project acting as principal employer and invoice is generated in GST no. of SECL by the working party (firm).

Issue – 

• Whether the service of such work will attract a tax rate of 12% or 18%?

Order – 

• The AAR held that this authority on the basis of records furnished and available on record, is not in a position to conclusively hold that the works, as is forthcoming form the “letter of acceptance” issued by RITES LIMITED supra, intended to be undertaken by the applicant qualifies being treated as 'Composite supply' as per Section 2 (30) of CGST Act, 2017.
• It was also held that on the basis of records furnished before and available on record, comes to considered conclusion that the benefit of Notification supra is eligible only when the said civil work intended to be undertaken by the applicant qualifies being treated as 'Works Contract' as defined under Section 2 (119) of CGST Act, 2017
• Thus, it would be appropriate to conclude that the benefit of the entry at SI.no. 3(v)(a) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended, the applicant, subject to the fact that the works undertaken by them are “Composite supply” and 'Works Contract' as per Section 2 (119) of the Act and if so the applicable GST would be @ 12% effective from 25.01.2018.
• In cases other than above the same attracts GST @ 18% under the residual entry at Sr. no. 3 (xii) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended.