Facts: The applicant is a contractor of Government projects. Many of the works are undertaken by way of sub contracts. The sub-contractors have raised doubts regarding the applicable tax rate.
Issued Involved: The applicant sought for advance ruling on GST rate applicable for the following works contracts awarded by various Government authorities:
| SL. No. | Name of Project |
| 1 |
Construction of Hospital Block buildings in Government Medical College with civil structural, internal and external finishing, plumbing and sanitary arrangements, electrical, HVAC, lifts and firefighting installations, including testing, commissioning and handover as turnkey work. |
| 2 | Construction of Non-science building for various departments at Central University of Kerala, Kasargod. |
| 3 | Construction of Biotech lab and administrative block at Life Science Park, Trivandrum. |
Held: The Hon’ble AAR of Kerala vide Advance Ruling No. KER/ 14 /2018 dated September 26, 2018 stated as follows:
- As per the amendment to notification No.8/2017 vide notification No.39/2017 dated October 13, 2017, composite supply of works contract as defined in clause (119) of section 2 of the CGST Act 2017, supplied to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Governmental Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration is taxable @12% GST and others attract 18% GST.
- Here, Government Authority means any authority or a board or any other body set up by an Act of Parliament or State Legislature or established by any Government with 90% or more participation by way of equity control. The Central University of Kerala established under the Central University Act. Hence the supply work relating to the construction of non-science building for various departments at Central University of Kerala, is also taxable @12% GST. Even if the work is executed through RITES Ltd, the applicable tax rate is 12% GST.
- Life Sciences Park, Trivandrum is an initiative of Kerala State Industrial Development Corporation Ltd. for providing basic infrastructural facilities to research institutions, science and technology academia and companies working in the field of Bio-Technology, Nano-Technology and Life Sciences, Therefore, it is evident that the Life Sciences Park, Trivandrum is a commercial venture of the KSIDC Ltd., a State Public Sector Undertaking and accordingly the works contract services in respect of construction of Biotech lab and administrative block at Life Science Park, Trivandrum is covered under SI No. 3 (xii) – Heading 9954 of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 18%.
In view of the observations stated above, the following rulings are issued as under:
i) Supply of works contracts awarded by Government attracts 12% GST.
ii) Supply of works contracts awarded by the Central University of Kerala attracts 12% GST.
iii) Supply of work awarded by M/s. HLL Infra Tech Services Ltd. for the construction of Biotech lab and administrative block at Life Science Park, Trivandrum attracts 18% GST.
Citation: [2018] 98 taxmann.com 164 (AAR-KERALA)