The Rajasthan Authority of Advance Ruling (AAR) has recently ruled that the construction services provided by the applicant through a works contract with the Rajasthan Housing Board attract Goods and Services Tax (GST) at the rate of 18% IGST.
The applicant preferred an application to the advance ruling authority seeking a ruling on whether the applicant’s tender of work contract under Chief Minister Jan Awas Yojna, is subjected to 9% CGST and SGST each, after 01.01.2022.
The applicant had an agreement with the Rajasthan Housing Board to construct the Economic Weaker Section; EWS-256 No’s Flats (G+12) under CMJAY dated 25.01.2021. As agreed in the contract RHB was levying and charging the applicable GST rate i.e. 6 % each CGST and SGST on the bill amount passed for the applicant prior to the amendment dated 18.11.2021 in the central tax rate.
The applicant further submitted that post amendment in Central Tax rate vide notification no. 15/2021 dated 18.11.2021, RHB charged GST at 9% CGST and SGST each on post bills passed after 01.01.2022 from the applicant. Till now, three bills passed after 01.01.2022 wherein such tax at 9% has been charged and the remaining of the contract and its execution is still subsisting till its completion dated 31.10.2022.
It was also submitted that the application of the notification is in dispute.
In the matter, personal hearing was granted to the applicant and Kamlesh Sharma, (Authorized Representatives) appeared for the same. During the hearing, he reiterated the submissions already made in the application.
It was observed by the coram of the advance ruling authority that, “Applicant has raised the question on the eligibility of the Notification on tax rate to the service supplied by them. Therefore, the application is admitted and the question for which ruling is sought is taken up for decision.”
It was noted that, “we observe that in this case applicant is providing service to Rajasthan Housing Board and in light of above discussion, we observe, applicant will be liable to pay GST @18% in light of Notification No. 03/2022- Central Tax (Rate) I Dated: 13th July, 2022.”
The authority bench of Central Tax Member Umesh Garg and State Tax Member Mahendra Singh Kavia thus ruled that, “The services provided by applicant to RHB after 13.07.2022 onward until rate not changed it will attract a rate of 18% GST.”
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