Appellate Authority for Advance Ruling — Classification of service— The appeal has been filed against the Order No.09/2021  dated 14.09.2021 passed by the Telangana State Authority for Advance Ruling. The appellant sought an Advance Ruling with regard to the Classification of supplies made by TS TRANSCO in terms of HSN and applicable rate of tax; the Classification of supplies procured by TS TRANSCO and eligibility to obtain services at reduced rate of 12% as per entry 3(iv) of Notification 11/2017 CTR dated 28 June 2017. The AAR held that the works contract service supplied by the applicant are in nature of General Construction service for long distance underground/overland/ submarine pipe lines, communication and electric power lines (cables); pumping stations and related works; transformer stations and related works. These works are taxable @18%. The Authority observed that the applicant was issued with contracts of installation and erection of electric equipment and transmission lines. The resultant civil structure is thus being used by the applicant for transmission of electricity and for supply of power to various customers for a consideration, meant pre-dominantly for the purpose of business. The facts of the case are analogous to the circular No.152/08/2021-GST dated 17-06-2021. The entry 3(vi) of the Notification covers service code 9954. By specific entry, it covers only certain construction services and does not cover other works contract services under service head 9954. This principle of interpretation was upheld by the Hon’ble Supreme Court of India in a Catena of Case law. Therefore, the claim of lower rate of tax claimed under this entry is not valid.

Held that:- The Hon’ble Authority held that the Services procured by Appellant from private contractors are classifiable as Works Contract Service and are taxable @ 18% in terms of Serial No. 3(xii) of Notification No. 11/2017- CT(Rate) dated 28.06.2017 as amended. The Services provided to SCR are classifiable as ‘Works Contract Service’ falling under Chapter 99, Group 99542 and are taxable @ 18% in terms of Serial No. 3(xii) of Notification No. 11/2017- CT(Rate) dated 28.06.2017 as amended.