The Madhya Pradesh Authority of Advance Ruling (AAR) in its recent ruling in the case of M/s Dee Vee Projects Limited has ruled that the effective date of amendments to GST notifications is the date of publication of Notifications in the Official Gazette in case its effective date is not mentioned in the body of the Notification.
Facts of the case:
The applicant, M/s Dee Vee Projects Ltd. is engaged in the works contract by way of construction erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration.
Issues on which ruling was sought:
What is the rate of tax applicable on works contract service undertaken by applicant i.e. whether GST rate of 18% will be applicable or 12%.
If the GST rate 18% as prescribed in serial no. 3, against heading no. 9954 (construction services), specified in Notification no. 11/2017-Central Tax (Rate) dated 28 June 2017, is the rate applicable to the nature of works contract undertaken by the applicant, it may be clarified that said Notification has been amended by Notification No. 20/2017-Central Tax (Rate), dated 22nd August 2017, Notification No. 24/2017-Central Tax (Rate), dated 21st September 2017 wherein the GST rate of 12% has been notified in respect of works contract service.
If so, whether the amendment through Notification No. 20/2017 and 24/2017 will be effective from the date of Notification No. 11/2017 and whether it would be in order for the applicant (supplier) to charge GST at the rate of 12% or is the GST rate 18% applicable to the nature of works contract undertaken by the applicant.
Thus the question raised is regarding date of effectiveness of Notification No. 20/2017 and 24/2017 wherein the tax rate on work contract service was reduced from 18% to 12%.
The applicant is of the opinion that the intention of the GST Council in reducing the rate was from very beginning. Whereas as per the Department the amendment will be applicable from the date of publication of the notification in the official gazette.
Ruling of AAR:
The coram consisting of Manoj Kumar Choubey and Virendra Kumar Jain held that in in absence of relevant and necessary information , they are unable to answer the first query relating to the rate of tax applicable to composite supply of work contract provided by the applicant.
Further it was adjudged that a combined reading of the provisions of Section 9(1) , 2(80) of the CGST Act, 2017 and Apex Court order in the matter of Ganesh Das Bhojraj leads to the conclusiobn that the effective date of Notification is the date of its publication in the Official Gazette. Where the date on which notification is to take effect is mentioned in the body of the notification itself, the effective date shall be such date. However in case effective date is not written , the effect of amending notification shall be the date on which amending notification is published in the Official Gazette.
Accordingly the AAR ruled that effective date of the amendments to Notification no. 11/2017-Central Tax (Rate) vide Notification No. 20/2017-Central Tax (Rate) and Notification No. 24/2017-Central Tax (Rate) asked by the applicant shall be the date of publication of the Notifications in the Official Gazette.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
