9.2 After reviewing the copy of the incomplete work order issued by M/S Ocean Constructions (India) Private Limited to Mohammed Haneef (electrical contractor) and the letter from M/S Ocean Constructions (India) Private Limited, it is determined that only part of the electrical work will be allocated to M/S Shaaz Electricals, the first subcontractor. 9.3 It is apparent from the copy of the tender submitted by the complainant to M/S Shaaz Electricals for the electrification of the HT 11KV substation with MCC panel that the complainant is carrying out part of the electrical work in accordance with the instructions of M/S Shaaz Electricals as a second subcontractor. The Karnataka Advance Ruling Authority (AAR) has ruled that the 18% GST applies to contracts related to electrical work performed by subcontractors for government works. 3 What is the penalty of TPS on the employment contract, on the commercial hotel for another person The Coram of Dr.M.P.Ravi Prasad and Mashood Your Rehman Farooqui noted that the confidentiality of the contract is between the plaintiff and the M/S Shaaz Electricals, however, M/S Shaaz Electricals is not under the central government, the state government, the territory of the Union, a local authority or a governmental body, and therefore the delivery provided by the applicant is not covered by entry No. 3 (iii) of Communication No. 11/2017 – Central tax (payment) of June 28, 2017. For the same reason, the applicant`s activity also does not fall within the scope of entry No 3(vi) of Communication No 11/2017 – Central tax (rate) of 28 June 2017 (as amended). Therefore, the AAR`s decision suggests caution before deciding to levy the tax rate on works contracts awarded by government agencies. In addition, I think it is advisable to exercise similar caution before analyzing the tax rate on works contracts awarded by the government agency.
(ii) Comprehensive contract for the supply of works within the meaning of Article 2, clause 119 of the Central Goods and Services Tax Act 2017. 5.2 In addition, the claimant asserts that the first subcontractor M/S Shaaz Electricals contracted it electrical subcontracting, which in turn was contracted by the prime contractor M/S. Ocean Construction (India) Pvt. Ltd., which was awarded the contract by M/S Karnataka Neeravari Nigam Ltd. The AAR ruled that the activity carried out by the applicant should not be included under Entry No. 3 (ix) or Entry 3 (iii) or Entry 3 (vi) of Communication No. 11/2017 – Central tax (rate) of 28.06.2017 (as amended) and the applicant is therefore not obliged to charge a reduced rate of 12% GST on said supply. and the applicant must respect the GST rate of 18%. 9.4 In the present case, it must be held that there is no private contract between the complainant and M/S Karnataka Neeravari Nigam Ltd. The initial contract was awarded by M/S Karnataka Neeravari Nigam Limited to M/S Ocean Constructions (India) Private Limited. According to the notification, therefore, any subcontractor who provides services to the main contractor by carrying out the work referred to in order number 3 of clause (iii) and clause (vi), which is exclusively subject to clause (ix) of serial number No. 3 of Communication No.
11/2017 – The central tax (rate) of 28.06.2017 (as amended) is exempt from the payment of GST, M/S Karnataka Neeravari Nigam Limited is entitled to act as a government agency. In the present case, M/S Shaaz Electricals is the subcontractor covered by that entry. Since there is no private contract between the applicant and M/S Ocean Constructions (India) Private Limited and the contract exists between the applicant and M/S Shaaz Electricals, the services provided by the applicant are not covered by this entry. Contractors do not have access to the blending regime because it is treated as a service under the GST. The composition scheme is only available for suppliers of goods. This will be a blow to small subcontractors who cannot decide on a composition scheme. They will be forced to enroll in a normal tax system, which will increase their compliance and costs. In this case, the service provider as a subcontractor benefits from a reduced tax rate of 6% CGST and 6% KGST. Thus, different aspects of the same activity have been imposed by different laws. This has led to a lot of confusion regarding treatment and taxation, which is why there have been so many disputes related to works contracts. `Comprehensive contract for the supply of works within the meaning of Article 2, clause (119), of the Central Goods and Services Tax Act 2017, the .
a state institution by construction,.. a civil structure or other original work intended primarily for purposes other than commerce, industry or other undertakings or professions. A uniform format is followed to generate the accounting code of the service. If it does not fall within the definition of works contracts, it is treated as a mixed supply. If you do not apply the invoice separately, an offer that attracts a higher interest rate will be applied to the entire transaction. The works contracts included three types of activities taxable under the previous law. It concerned both the supply of goods and the provision of services. If a new product was created during the employment contract, that production became a taxable event. 1. 5.8 The applicant states that it considers that all the requirements of clause (ix) of order number No 3 of Communication 11/2017 – Central tax (rate) of 28 June 2017 (as amended) are fulfilled, provided that all the requirements of clause (ix) of the works contract to the first subcontractor are met. 2. As a contractor, can I take feedback on the purchase of raw materials for construction work Please check if your work falls within the definition of construction contracts or not.
If this is the case, the GST rate is 18% for construction contracts. Please note that the GST rate for construction contracts entered into under a government project will be somewhat relaxed. Therefore, please check if your project is eligible for relaxation or not. 9. The documents submitted by the applicant are examined and it is found that the applicant did not produce the contractual document/agreement between M/S Karnataka Neeravari Nigam Ltd. and M/S. Ocean Construction (India) Pvt. Ltd. for the execution of the works related to the Channabasaveshwara lift irrigation project. A construction contract is a mixture of service and transfer of goods. Examples of construction contracts are the construction of a new building, construction, installation of plant and machinery. (c) a civilian structure or other original work related to the ”in situ rehabilitation of existing slum dwellers using land as a resource through private participation” within the framework of the (Urban) Housing for All Mission/Pradhan Mantri Awas Yojana, for residents of existing slums only; d) a civil structure or any other original work relating to the ”construction/improvement of individual houses run by the beneficiary” within the framework of the ”Housing for All” (urban) / Pradhan Mantri Awas Yojana mission; (a) a civil structure or other original works intended primarily for purposes other than commerce, industry or other undertakings or professions; This means that the works contract is treated as a service and the tax is collected accordingly (and not as goods or partial goods/services).
10. Entry No. 3 iii) of Communication No. 11/2017- The central tax (rate) of 28.06.2017 (as amended) declares that any taxable person who provides such a service in the form of a composite works contract within the meaning of Article 2, clause (119), of the CGST Law of 2017 applies to the central government, the state government, the territory of the Union, to a local or governmental authority or public body by way of construction, construction, commissioning, installation, completion, equipment, repair, maintenance, renovation or modification, as explained in sub-entry No. b) (canal, dam or other irrigation works), the service provider as a subcontractor benefits from a reduced tax rate of 6% CGST and 6% KGST. If a new product arose during the performance of a works contract, the central excise duty was levied. ”(iii) Comprehensive contract for the supply of works within the meaning of Article 2, paragraph (119), of the Central Goods and Services Tax Act 2017, which is provided to the Government, local authority or government body by construction, construction, commissioning, installation, completion, equipment, repair, maintenance, renovation or modification of – The composite delivery provided by the applicant concerned is not covered by the entry number.
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