Facts:
M/s. NHPC Ltd. (“the applicant”) has been assign the work of construction of Indo-Nepal Border Road by the Ministry of External Affairs (“MEA”), Government of India. It sub-contracted the said work to the sub-contractors.
The applicant sought advance ruling whether the Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017 (“Notification No. 12/2017”) is applicable to the contractors/sub-contractors involved in the construction of Indo-Nepal Border Road.
Issue involved:
Whether the Notification No.12/2017 is applicable to the contractors/sub-contractors involved in the construction of Indo-Nepal Border Road or otherwise?
Held:
The Hon’ble AAR, Uttarakhand vide Ruling No. 17/2018-19 dated January 30, 2019 observe that the work is allotted to the applicant by MEA is related to “construction of road”. The applicant sub-contracted the said work to PWD, Govt. of Uttarakhand who further sub-contracted to a contractor.
The issue of GST liability on the applicant on this matter has already been decided by Advance Ruling Authority vide Ruling No.10/2018-19 dated October 10, 2018 wherein the activity of the applicant was held exempted from GST in terms of Notification No. 12/2017.
Advance authority members views on the issues are as under:
1st member view: Supply in question i.e. ‘construction of road’ by sub-contractor is not exempted vide Notification No. 12/2017, therefore the sub-contractors are liable to pay GST @ 12% [CGST 6% + SGST 6%].
2nd member view: On reading of both notifications viz. 11/2017-Central Tax (Rate) dated 28th June, 2017 and Notification No. 12/2017 together observe that sub-contractors of supply in question are exempted from payment of GST in as much as the main contractor namely NHPC is exempted from GST in terms of Notification No. 12/2017 vide Advance Ruling bearing No.10/2018-19 dated October 10, 2018.
Since having different views on the applicability of GST on the sub-contractors. we are making a reference to the Appellate Authority for hearing as per Section 98(5) of CGST Act.
Citation: [2019] 104 taxmann.com 365 (AAR- UTTARAKHAND)