Page 159 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] IN RE : KPC PROJECT LTD. 373
a local authority or a Governmental Authority by way of construction, erection, commis-
sioning, installation, completion, fitting out, repair, maintenance, renovation, or altera-
tion of -
(a) a civil structure or any other original works meant predominantly for use
other than for commerce, industry, or any other business or profession;
(b) a structure meant predominantly for use as (i) an educational, (ii) a clini-
cal, or (iii) an art or cultural establishment; or
(c) a residential complex predominantly meant for self-use or the use of their
employees or other persons specified in paragraph 3 of the Schedule III of
the Central Goods and Services Tax Act, 2017.
The applicant is engaged in Construction work for Millennium Tower at Plot No.
16 & 17 (in 4.00 Acres) at Hill No. 3. Madhurawada, Visakhapatnam District
through Nodal agency APIIC, which is meant for undertaking development of
EMC’s/IT Parks/IT SEZs/IT Layouts, for coordinating with necessary Govern-
ment agencies and provide basic infrastructure like power, water, sewerage, ac-
cess roads to the doorsteps of the proposed EMCs/IT Parks/IT SEZs/IT Cam-
puses. APIIC has also been nominated as Industrial Area Local Authority (IALA)
in Madhurawada IT layout for undertaking provision & maintenance of Infra-
structure facilities.
Now we examine whether the construction work in which the applicant
is engaged in is meant for any business or otherwise.
As seen from the 41st Annual Report for the year 2013-14 as made avail-
able by APIIC in their website https://www.apiic.in/Annualreports.html. they are
engaged in land acquisition and development and allotment of plots and sheds
to various industrial ventures in the State making investments in joint venture, in
associate companies, in related party companies, in subsidiary companies etc.,
and the income they are getting is revenue from operations like sale of land,
houses, interest on hire purchase and long term borrowings etc.,
In this context, it is worthwhile to make a reference to an aspect in page
No. 25 of the above mentioned Annual Report regarding “Land Conversion
Charges”
“The state investment promotion Committee (SIPC) in its meeting held on 26-4-
2013, decided not to provide exemption to the corporation from payment of land
conversion fee for non-agricultural purposes foregoing state revenues since APIIC
would pass on any costs to the end client”.
It is evident from the above statement that the activities of M/s. APIIC are busi-
ness activities and not otherwise. The applicant informed that the said construc-
tion is for accommodating Small and Medium Enterprises (SMEs) and Startups.
Moreover, the applicant did not provide any information or documentary proof
evidencing that the construction/building is for use other than for commerce,
industry, or any other business or profession to be eligible for concessional rate
of 12% (6% CGST + 6% SGST) available under Notification No. 24/2017-C.T.
(Rate), dated 21-9-2017.
In this case, the contract entered by the applicant is classifiable under
SAC Heading No. 9954 under construction services, and it falls under Entry No.
(ii) of Serial No. 3 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017
i.e., Composite Supply of Works Contract as defined in clause (119) of Section 2
of Central Goods and Services Tax Act, 2017 and the applicable rate of tax is 18%
(9% under Central tax and 9% State tax).

GST LAW TIMES  20th August 2020  159