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With effect from 01.01.2022, contractors are not entitled for benefit of concessional rate of tax under Sr. No.3 (x) of Notification No. 11/2021 - CTR dated 28.06.2017 for providing 'earth work' service where service recipient is a government entity or government authority.

Classification of service- In the instant csae, the applicant is seeking an advance ruling in respect of the following questions:

A) If the tax rate of M/s. Mahalaxmi B T Patil Honai Constructions JV is NIL as per Sl No 3A- Chapter No. 9954 as per Notification No. 12/2017 C.T. (Rate) dated 28.06.2017, as amended by Notification No. 2/2018-C.T. (Rate) dated 25.01.2018, whether we can avail the benefit of the same tax rate i.e. NIL?

B) If the above answer is negative, then whether we can avail the benefit of SI NO 3 (x) - Chapter No. 9954 as per Notification No. 01/2018-C.T. (Rate) dated 25.01.2018 (amendments in the Notification No 11/2017- Central Tax (Rate) dated 18th June 2017)?

On going through the submission made by the applicant, it is seen that they are in the receipt of work of the consisting of earth work such as Excavation for Tunnel, removing of excavated stuff, providing steel support, rock bolting, reinforcement, fixing of chain link cement concerting etc., wherein total earth work is approximately 91% and the construction work is approximately 9%, where in transfer of property is involved.

In this case, it is not disputed that the GMIDC is a Government entity and the earthwork forms more that 75% of the work and the order is procured by principle contractor in relation to work entrusted to it by State Government. Therefore, it can be said that Sr. No. 3(x) of Notification No. 11/2017 can be made applicable in the present case.

Held that- With respect to the first question asked by the applicant , since we have already held that the activity of the Principal Contractor is not covered under Sr. No 3A- Chapter No. 9954 as per Notification No. 12/2017- C.T. (Rate) dated 28.06.2017, as amended from time to time, in the subject case also relying on the same ratio we are of the opinion that the applicant cannot avail the benefit of Sr. No 3A- Chapter No. 9954 as per Notification No. 12/2017- C.T. (Rate) dated 28.06.2017, as amended.

Notification No.11/2017-CT (Rate) dated 28/6/2017 as amended, was amended vide Notification No. 15/2021 - Central Tax (Rate) dated 18.11.2021 (with effect from 01.01.2022) and in Sr. No 3, in column (3), in the heading "Description of Services", in item (x) for the words "Union territory, a local authority, a Governmental Authority or a Government Entity" the words "Union territory or a local authority" shall be substituted. That means words "a Governmental authority or a Government Entity" are omitted. Therefore, with effect from 01.01.2022, the impugned services supplied by the applicant will not be covered under Sr. No.3 (x) of Notification No. 11/2021 - CTR dated 28.06.2017 as amended from time to time.