For GST purposes Steel Authority of India (SAIL) is a Government Entity
Facts and Issues of the case
The Authority for Advance Ruling held that Steel Authority of India Ltd. (SA ML) is a Government Entity and the construction work of ISPAT POST- GRADUATE MEDICAL INSTITUTE AND SUPER SPECIAL1 Y HOSPJTA L. at Rourkela is a work entrusted by Central Government; to SAIL, therefore M/s URC Construction (P) Ltd. executing the work under the Letter of Award on Central GST and SGST. Therefore, the Applicant being the Principal Contractor, whether the tax rate applicable to value of contract between the Applicant and M/s SAIL is also leviable at 12% [CGST @ 6% + SGST @ 6%]
The tax rare is determined at 12 % applicable to the value of works contract services provided by the Applicant to M/s SAIL whether the rate of taxes determined would tie applicable to the entire value of the works contract
As the Applicant has on date of the ruling have paid 18% of tax on its Tax invoices raised to M/s SAIL remaining to the underlying subject contract, whether the taxes to the extent of 6 % (18% paid- 12% as per order) becomes taxes paid over and above the liability to pay as tax and can be regarded as tax in excess.
Observations by the Court
The Court has gone through the advance ruling application along with all the annexure submitted by the Applicant.
it was submitted that the Applicant has been awarded a composite contract for Design, Engineering, Procurements and Construction of ISPAT Post Graduate Medical Institute and Super Specialty Hospital et Rourkela Steel Plant for SAIL in Odisha at a consolidated price as deposit work on token basis. The scope of work includes supply of all 8 ds and services. It was also submitted that the said contract containin8 composite supply of goods and services for construction of immovable property undisputedly would fall within “Works Contract” as defined under Section 2(119) of the CGST Act, 2017. Further, the said work provides for construction of a structure meant predominantly for use as a clinical establishment. In the instant case, it is observed that the MoU was entered into between the applicant and M/s SA I L for construction of ISPAT Post Graduate Medical Institute and Super Specialty Hospital at Rourkela Steel Plant. Subsequently, the said work was entrusted to M/s URC Construction (P) Ltd (the sub-contractor of the Applicant) for execution. AAR. Odisha vide Order dated 09.fl3.2021 held that MS SAI L, Rourkela qualifies to be called and termed as a ‘Government Entity’ and the works contract service which is being supplied by MS URC Construction Private l,imi1ed would merit entitlement for concessional rate of GST @ 12 [CGST @ 6% + SGST @ 6%]
It has been observed that the pre-requisites are satisfied /fulfilled for the supply to quality for the notified exemption. Accordingly, we hold that MS SAIL. Rourkela qualifies to be called and termed as a Government Entity’ for the purpose of GST law. Therefore, the supply of works contract service which is being supplied to SA1 L. For construction of ISPAT Post Graduate Medical Institute and Super Specialty Hospital would merit entitlement for concessional the of CGST @ I 2% [CGST @ 6% + SGST@ 6%]
Steel Authority of India Ltd., SAIL is a ‘Government Entity’, therefore the’ tax rate applicable to value of contract (works contract service only) between the Applicant and MS SAIL is leviable at 12% [CGST @ 6% + SGST @6%]In-re-NBCC-India-Limited-GST-AAR-Odisha