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GST : Works contract services received by applicant from vendors for supply of material and erection work would fall under works contract and fall under entry no. (ii) of S. No. 3 of table of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 and applicable rate of tax is 18 percent (9 percent under Central Tax and 9 percent State Tax)
• The applicant-company, wholly owned subsidiary of MPPMCL, was carrying out function of distribution of electricity as entrusted by the Government of Madhya Pradesh. The applicant for the above purpose was also receiving work contract services from vendors for supply and erection work under various projects. The applicant wished to know whether clause (vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017 was applicable on the works contract services received by it, and determination of liability to pay tax.
• The concerned officer submitted that the nature of works contract undertaken by the applicant did not come under the category for which the notified rate of tax was 12 percent (6percent CGST and 6 percent SGST) but it would attract 18 percent (9 percent CGST and 9 percent SGST).
• In the instant case, the applicant had awarded work to the successful bidder for supply of minerals and erection respectively. Therefore, the contract entered by the applicant is squarely falls under the works contract and falls under entry no. (ii) of S. No. 3 of table of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 as amended from time to time and corresponding notifications under and MPGST Act, 2017, and applicable rate of tax is 18percent (9percent under Central tax and 9percent State tax).
• The applicant is not entitled for the benefit of concessional rate of GST at rate of 12 percent (6percent under Central tax and 6percent State tax) for the said projects in terms of Notification No. 24/2017-Central Tax (Rate) dated 21-9-2017, read with Notification No. 31/2017-Central Tax (Rate) dated 13-10-2017.