Classification of service— In the instant case, the applicant is a partnership firm and a registered person under the GST laws has been awarded a works contract by Kochi Metro Rail Limited for “the Construction of Terminals for Phase 1 Stage 2” for the Kochi Water Metro Project, an integrated water transport project in Greater Kochi Region.
The project includes providing modern and safe watercraft, boat terminals, access roads, lighting and other ancillary infrastructure developments, which has been initiated as part of urban planning and to improve amenities available to the public.
The applicant has requested an advance ruling on the following
1. Whether the Kochi Water Metro Project comes under exclusion specified for the term 'business' as per the explanation to heading 9954; Item o.(vi) of Notification No. 11/2017 dated 28th June 2017?
2. Whether the works contract awarded to Kool home builders qualifies to tax under CGST Act @ 6% as per Notification No. 11/2017 - Central Tax (Rate) dated 28th June 2017 under clause (a) of item number (vi) of serial number 3, under Section 5 of Chapter 99 as amended by Notification No.24/2017 - Central Tax (Rate) dated 21st September 2017?
3. Whether the said works contract qualifies to tax under SGST Act (a 6% as per Notification SRO.No.370/2017 dated 30th June 2017 under clause (a) of item number (vi) of serial number 3 of heading 9954, section 5 Chapter 99 as amended by State Tax (Rate) Notification No. SRO. 718/2017 published on 30th June 2017?
In order to decide these issues, it is to be examined whether the services rendered by the applicant qualify to be classified as works contract services.
In the instant case though the contract of construction of the terminals and other infrastructural facilities for the integrated water transport project is awarded to the applicant by Kochi Metro Rail Ltd as the executing and operating agency the contract is awarded on behalf of the Government of Kerala and the transfer of property in goods in the work contract services rendered by the applicant takes place to the Government of Kerala; the de jure owner of the assets of the integrated water transport project, and hence the recipient of the work contract services rendered by the applicant is the Government of Kerala.
Held that—
The integrated water transport project namely; Kochi Water Metro Project is an activity undertaken by the Government of Kerala as a public authority and hence squarely covered by the explanation to entry at SI No. 3 (vi) of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.
The works contract services performed by the applicant as per the above-mentioned contracts awarded by Kochi Metro Rail Ltd is exigible to 6% CGST as per entry at SI.No.3 (vi) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended.
The works contract services performed by the applicant as per the above-mentioned contracts awarded by Kochi Metro Rail Ltd is exigible to 6% SGST as per entry at Sl.No.3 (vi) of Notification No. 370/2017 State Tax (Rate) dated 30.06.2017 as amended.