Application submitted after the start of the proceeding is denied by AAR

Fact and issue of the case

Under subsection (4) of Section 98 of both the Andhra Pradesh Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017,

To start, we want to be explicit that the CGST Act of 2017 and the SGST Act of 2017 are equivalent in terms of their provisions and only differ from one another in a small number of specific provisions. A reference to the CGST Act would therefore also refer to the equivalent similar provisions in the APGST Act unless a specific mention of such dissimilar provisions is made.

The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s. The Indian Hume Pipe Company Limited (hereinafter referred to as applicant), registered under the AP Goods tk Services Tax Act, 2017

M/s 1 he Indian Hume Pipe Company Limited, also known as the “applicant,” accepts contracts for the building of headworks, sumps, pumprooms, the laying and jointing of pipe lines, as well as the commissioning and maintenance of the complete work for water supply projects and sewerage projects.The applicant is registered for GST under the ID 37AAACT4063DIZL.

The applicant’s principal clients include municipalities, authorities, local agencies, and government organisations. M/s. Andhra Pradesh State Irrigation Development Corporation Limited granted the applicant a contract under agreement No. 28/2018-19 dated February 13, 2019, for the construction of the Tandyamlift Irrigation System (LIS) on Relligeddadrain in the ponduru mandal of the srikakulam district;

According to the Goods & Services Tax Act of 2017, the petitioner claims that M/s Andhra Pradesh State Irrigation Development Corporation Limited has GSTIN 37VPNA01219B1DA.

Observation of the court

The Contractee’s of the applicant in question are holding GSTINI 37VPNA01219B1DA. The registration certificate issued by the GST department classifies the contractee as Government department.

M/s. Andhra Pradesh State Irrigation Development Corporation Limited is a company, incorporated on 7th September 1974. It is classified as State Govt Company and is registered with Registrar of Companies, Vijayawada. It is involved in growing of crops, marketing, gardening and horticulture. State government holds 99.29% of paid up share capital of M/s. Andhra Pradesh State Irrigation Development Corporation Limited and the rest 0.71% is held by central government.

In view of the above, the applicant submits that, the following interpretations for the questions stated supra

a. The said transaction in question is covered by Notification No. 15/2021- Central Tax (Rate), dated 18th November, 2021 r/w. Notification No. 22/2021- Central Tax (Rate), dated 31st December, 2021 which after amendment now reads as “(iii) Composite supply of works contract as defined in clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017, supplied to Central Government, State Government, Union territory or a local authority”;

b. The said transaction in question is liable to tax at the rate of 12%.

c. The applicant is of the opinion that “Person” cannot have different constitution of business.

The applicant further submits that, Notification No. 15/2021- Central Tax (Rate), dated 18th November, 2021 seeks to amend parent Notification No.11/2017 – Central Tax (Rate) dated 28th June, 2017,which prescribed Rate of Tax on Construction Services at Serial No. 3 of the Table i.e “(ii) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017” at 9% under CGST Act, thereby implying total GST at 18% (CGST – 9% + SGST – 9%). Notification No.11/2017 – Central Tax (Rate) dated 28th June, 2017 was subsequently amended vide Notification No.20/2017-Central Tax (Rate) dated 22nd August, 2017,whereby at Serial No. 3 of the Table, the following item was inserted

“Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, supplied to the Government, a local authority or a Governmental authority by way of construction, erection, commissioning, Installation, completion, fitting out, repair, maintenance, renovation, or alteration of, – (a)………………………. (b)canal, dam or other Irrigation works; (c) pipeline, conduit or plant for water supply (ii) water treatment, or (ill) sewerage treatment or disposal to be taxed at the rate 12% “.

Subsequently Notification No. 31/2017 dated 13th October,2017 was issued to amend Serial No. 3(iii) i.e “Central Government, State Government, Union territory, a local authority, a Governmental authority or a Government entity”. Further this Notification also clarified the meaning of the terms Government authority and Government entity, which is given as under:

“Governmental Authority” means an authority or a board or any other body, – (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90 percent or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243W of the Constitution or to a Panchayat under article 243 G of the Constitution.

“Government Entity” means an authority or a board or any other body including a society, trust, corporation, i) set up by an Act of Parliament or State Legislature; or established by Government, with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority.”