Order Date – 20 May, 2022

Facts –

• The applicant, NBCC (INDIA) Limited, had entered into a MoU with M/s. Steel Authority of India Limited (SAIL), wherein the applicant was entrusted with the work relating to planning, designing and construction of ISPAT PG Medical Institute at Rourkela.
• The applicant acted as an executing agency and appointed M/s URC Construction (P) Ltd., as a EPC Contractor to carry out the project according to CPWD Code and practices.
• The applicant had applied tax rate of 9% CGST and 9% SGST on the invoices
• The applicant submitted that applicable rate of taxes on the entire value of services under the MoU is at the rate of 12% and taxes already paid at 18% are eligible for refund.

Issue – 

• Whether the tax rate applicable to value of contract between the Applicant and M/s SAIL is leviable at 12% [CGST @ 6% + SGST @ 6%] or whether the tax rate at 12% applicable to work contract services would be applicable to entire value of work covered under MoU?
• Whether the taxes to the extent of 6% (18% paid-12% as per order) becomes taxes paid over and can be regarded at tax in excess and whether the excess tax of 6% eligible for refund under section 54 of CGST Act?

Order – 

• The authorities observed that construction of Medical institute and Super specialty hospital in this case is for the medical care and welfare of the people of Odisha at large, without any profit motive. Further, the instant supply is a ‘Composite Supply of Works Contract Service provided or to be provided in relation to construction of civil structure meant predominantly for use as a clinical establishment and hence, the pre-requisite for the supply to qualify for the notified exemption is satisfied/fulfilled.
• Steel Authority of India Ltd., SAIL is a 'Government Entity', therefore the tax rate applicable 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.
• Further, in order to claim refund of excess tax paid applicant can go through Section 54 of the CGST Act and claim for refund.