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Consult Construction

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Recent blog posts

2018-VIL-175-AAR

M/s JABALPUR ENTERTAINMENT COMPLEXES P. LTD

GST – Madhya Pradesh AAR - Operation of mall and multiplex - Admissibility of input tax credit –

HELD- food items, soft drinks, and snacks sold in the Snack Bar & Food Court is chargeable to GST in terms of Notification No.11/2017-CT(Rate) as amended by Notification No.46/2017-CT(Rate) at prevailing rate of 5%, subject to conditions laid down in the parent Notification and the services provided by the applicant in Snack Bar would be classifiable under SAC 9963 - Applicant is entitled to Input Tax Credit of tax paid on Movie Distributor Revenue Sharing Bill, Projector Rental Bill and Advertising Bill in full; in respect of Security Agency Bill and Housekeeping Bill, the ITC shall be restricted to the apportioned part which is utilised in providing taxable output services - the Input Tax Credit of GST paid on goods purchased for the purpose of maintenance of Mall shall not be admissible to the applicant in terms of clause (c) of Section 17(5) of the CGST Act, 2017 - the Input Tax Credit of GST paid on Works Contract Service received by the applicant for maintenance contract of building shall not be available to them in terms of clause (d) of Section 17(5) of the CGST Act, 2017

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2018-VIL-174-AAR

M/s EAPRO GLOBAL LIMITED

GST – Uttarakhand AAR - applicability of GST rate on supply of solar inverter, Controller, battery and panels under "Solar Power Generating System" as a whole & whether such supply be called as 'composite supply or mix supply' – whether supply of solar inverter & solar panels together will fall under the definition of "Solar Power Generating System" or it will be a 'mix supply' and the applicability of GST rate on supply of solar inverter & solar panels together

 

HELD – the supply of solar inverter, controller, battery and panels would be covered under ‘Solar Power Generating System’ as a whole when the said goods are supply for the said specified purpose and accordingly as per serial no. 234 of ScheduleI of the Notification No. 01/2017-CT (Rate), the applicable rate of GST on such supply will be 5% - the supply of the said items are intended for "Solar Power Generating System", hence the entire supply would fall under composite supply in as much as "Solar Power Generating System" is predominant element in composite supply and it takes the character of the principal supply therefore all the goods should be taxable @ 5% as "Solar Power Generating System" – the solar inverter & solar panels will be covered under serial no. 234 of Scheduled-I of the Notification No 01/2017- CT (Rate) and will attract GST @ 5% under "Solar Power Generating System" and in this context also, the supply will be treated as "composite supply" - The aforesaid findings are applicable for both manufacturers and traders engaged in the said supply

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2018-VIL-173-AAR

MADHYA PRADESH PASCHIM KSHETRA VIDYUT VITARAN COMPANY LIMITED

GST – Madhya Pradesh AAR - Works Contract - Applicant is engaged in power distribution and for this purpose it carries supply and erection work - whether the Applicant is a government entity and liable to discharge GST at concessional rate of 12% - whether clause (vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 is applicable on the works contract undertaken by the applicant –

HELD – the Government of Madhya Pradesh is having full control over the applicant and the applicant is covered under the definition of Government Entity - the projects under DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of government are carried out for business purpose - the benefit of concessional rate of 12% is not available to the applicant on works pertaining to construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration, which are carried out in respect of projects under DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of governments as the same is undertaken for the business purpose - the contract entered by the applicant is squarely falls under the works contract and the applicable rate of tax is 18%

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2018-VIL-205-AAR

M/s MEMBRANE FILTERS (I) PVT LTD

GST – Maharashtra AAR - Composite supply - Works Contract - Applicable rate and HSN code of GST when extracting water from tube well, passing it through treatment plant of removing unwanted contaminants from ground water and eventually lifting it to overhead tank when the scheme runs on solar power

HELD - the work done by applicant is a composite supply which attracts the provisions of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 - the entire contract is in the form of a composite contract consisting of supply of goods and services and where the main intention is to provide drinking water to the villages after removing excess Iron impurities and which therefore would be the main part of the contract –Heading 9954 is applicable to the subject contract of extracting water from tube well, passing it through treatment plant of removing unwanted contaminants from ground water and eventually lifting it to overhead tank and the same would attract a tax rate of 12%.

However, the benefit of 12% tax rate would be available to the applicant only if the Works Contract services provided by them are Composite supply of works contract as defined in clause (119) of section 2 of the CGST Act, 2017, supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, pipeline, conduit or plant for (i) water supply (ii) water treatment

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2018-VIL-180-MAD

THE STATE OF TAMIL NADU Vs RAJ MOSAIC TILE WORKS

Tamil Nadu General Sales Tax Act, 1959 - appellants is a works contractor who had undertaken the working of laying and polishing of Mosaic tiles – revenue view that entire amount received by the assessees on the execution of works contract on mosaic is taxable - Revenue aggrieved by Tribunal holding that the sand used for the execution of works contract alone would be taxable and the value of other items is exempt under Section 3B(2)(c) of the Act - Whether the assessee is entitled to the claim of exemption under Section 3(B) 2(b) and also other deductions as per account

HELD – the Appellate Authority and Tribunal are the final fact finding authorities and when the books of accounts were produced, the Appellate Authority has analysed the same and found that the dealers were having separate accounts for the materials that had been purchased and utilised in the course of works contract and that they have also maintained separate figures for various charges that had been incurred during the course of works contract - the entire raw materials utilized for the execution of works contract have been purchased from within state and suffered tax and the items used for the execution of works contract were tax suffered goods except sand.

Therefore, the sand used for the execution of works contract alone is taxable and the value of other items used should be given exemption under Section 3(B)(2)(c) of the TNGST Act, 1959 – the impugned order is sustained and Revenue petitions are dismissed

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M/s A.P. PROCESSORS Vs STATE OF HARYANA

Haryana Value Added Tax Act, 2003 – Levy of tax on transfer of property in goods involved in the process of Job Work - Whether the Tribunal was justified in upholding the levy of tax on chemicals/consumables and entire value of dyes in the process of job work of dyeing of fabric by treating that property in the goods has passed on to the principals – validity of Tribunal ruling that property in the goods i.e. dyes and chemicals is transferred to be principals in the job work of dyeing the fabric - Works Contract - quantity of goods on which tax is to be levied.

HELD - what is taxable under the HVAT and CST Act is the value of the goods which get transferred to the customer in the execution of works contract either as goods or in any other form and not the value of goods used or consumed in the execution of the works contract - The tax on the entire value of chemicals consumed during the process of dyeing and job work are not to be included for the purpose of levy of VAT as substantial portion of the same is not transferred to the principal eventually as they are washed out and do not remain embedded on the textile or fabric - it would be essential to determine the value of consumables transferred in the goods on which tax is leviable.

While determining the actual loss of chemicals, dyes and colours where the fabric or textile undergoes various processes depends upon factual aspect which can be considered only by the Assessing Officer where parties can produce evidence in respect of their respective claims - The matter is remanded to the Assessing Officer to work out the details of quantity of chemicals, dyes and colours that would get washed out in the process of dyeing and printing of fabrics undertaken by the appellant -

the Assessing Officer would be at liberty to proceed in the matter for adding the percentage of chemicals, dyes and colours in the value of the turnover which are retained or embedded on the textile or fabrics, as the case may be - the appeals are disposed of.

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MADHYA PRADESH PASCHIM KSHETRA VIDYUT VITARAN COMPANY LIMITED

GST – Madhya Pradesh AAR - Works Contract - Applicant is engaged in power distribution and for this purpose it carries supply and erection work - whether the Applicant is a government entity and liable to discharge GST at concessional rate of 12% - whether clause (vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 is applicable on the works contract undertaken by the applicant –

HELD – the Government of Madhya Pradesh is having full control over the applicant and the applicant is covered under the definition of Government Entity - the projects under DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of government are carried out for business purpose - the benefit of concessional rate of 12% is not available to the applicant on works pertaining to construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration, which are carried out in respect of projects under DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of governments as the same is undertaken for the business purpose - the contract entered by the applicant is squarely falls under the works contract and the applicable rate of tax is 18%

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HC allows refund claim of assessee, engaged in execution of works-contract, of excess credit which was inadvertently reflected as ‘carry forward’ in next tax period return instead of ‘refund’ for subsequent period under Delhi Value Tax Act (Act); States that, despite this Court’s order on a previous occasion to refund the amount in a time bound manner, Revenue’s action of issuing order to deny claims on ground of inadequate/unsatisfactory material is untenable;

Referring to ruling in Shaila Enterprises, accepts assessee’s plea that the default assessment became final since period of limitation for making assessment on merits expired, and hence there exists “no scope to legally scrutinize the refund claim”;

Remarks, “The pattern and structure of the DVAT Act is such that if an assessment order is not passed, the returns acquire the status of a default assessment; if any unadjusted credit exists, the assessse’s right to refund crystallizes” while finding Revenue’s argument that refund is impermissible because the period for revising returns has passed as “utterly frivolous and baseless”;

Holds that, fact that excess credit amount was wrongly shown does not preclude assessee's basic refund claim, on which it maintained a consistent stand, while elucidating further that, "revenue cannot hold on to the monies which do not bear the character of a valid levy; they have to be refunded” : Delhi HC

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2018-VIL-150-AAR

SHREE CONSTRUCTION

GST – Maharashtra AAR - Applicable rate of GST to be charged by the sub-contractor to main contractor on Works Contract Services pertaining to railways original works contract –

HELD - the Works Contract Services provided by the applicant is the same or a part of the main contract entered into between the main contractor and the Railways - the property in goods (materials used in the supply of Works Contract Service) also gets transferred to the Railways directly.

In such a case, the works contract service provided by the sub-contractor to the main contractor would be supply of Works Contract pertaining to Railways and therefore chargeable to tax @ 12% - the sub-contractor providing services of composite supply of works contract in respect of original works pertaining to railways would be covered for concessional rate of GST @ 12%

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2018-VIL-149-AAR

THE IDEAL CONSTRUCTION

GST – Maharashtra AAR - Applicable rate of GST to be levied on the sale of Flats / Units to the prospective buyers under affordable housing projects - Admissibility of Input tax credit –

HELD - The applicable rate of tax to be levied is 12% (8% GST after deducting value of land) in case of Affordable Housing Project. If the project qualifies as an Affordable Housing Project, then registration under Pradhan Mantri Awas Yojana is not required to avail this benefit -

The applicant will be eligible for ITC subject to fulfilment of conditions as prescribed under the GST Act

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