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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
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GST Update on GST rate for Earthwork services 53/2020-21

GST Update on GST rate for Earthwork services 53/2020-21

Recently Rajasthan AAR has pronounced a ruling vide No. RAJ/AAR/201-20/20 in the case of M/s Ashok Kumar Choudhary, on the classification of service being provided by the applicant and determination of the liability to pay tax.

Let us have a brief look into the facts of the case. The applicant is a proprietorship concern engaged in providing works contract services. They have been awarded a sub-contract for earthwork in relation to construction of access controlled Nagpur-Mumbai Super Communication Expressway (Maharashtra Samruddhi Mahamarg). Further Sadbhav Engineering Limited (SEL) was awarded the contract for such construction as principal contractor who Sub-contracted the work of Earth Works including Roadway-Clearing and Grubbing, Excavation in Soil, Hard Rock, Embankment and Subgrade etc to M/s Potaliya Enterprises. Potaliya Enterprises further sub-let the above work to the applicant.

 

The question that arises here is that whether the said transaction shall be treated as supply of service as composite supply of works contract as defined under clause 2(119) of the CGST Act 2017 supplied by way of supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a road under entry number 3(iv) of the Notification No 11/2017-CT (Rate) dated 28.06.2017 and is taxable at the rate of 12%. So the applicant has put forward before the authority the following questions

“What shall be rate of GST on activity of sub-contract for earthwork in relation to construction of access controlled Nagpur-Mumbai Super Communication Expressway (Maharashtra Samruddhi Mahamarg)?”

 

With respect to answering above question, the AAR has gone through the scope of work as stated in the agreement and has formed an opinion that supply made by the applicant falls under supply of construction service for Earth Work and related work and is of independent nature, and cannot be categorised as construction of road as classified under Entry number 3(iv) of the Notification No 11/2017-CT (Rate) dated 28.6.2017. After discussing the definitions of Composite supply, Principal supply and Works contract service, it has concluded that the said activity does not fall under either Composite Supply or Mixed Supply. Further, as there is no involvement of transfer of property in goods in the above said activity; it cannot be classified under Works Contract Services also. 

 

The AAR concluded that the activity falls under the heading “Site formation and clearance services including preparation services to make sites ready for subsequent construction work, test drilling and boring and core extraction, digging of trenches” and is  classifiable under SAC 995432 attracting GST @ 18%.

 

This is solely for educational purpose.

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