The construction of a jetty for the Indian Coast Guard at Fort Kochi by the Cochin Port Trust (CoPT) is not eligible for exemption from the goods and services tax (GST), the Kerala-based authority for advance ruling (AAR) has said.
It is, however, eligible for a concessional GST of 12 per cent, provided the jetty was completed within the specified time frame, AAR has ruled. The authority held that the construction of the jetty constitutes works contract and hence, a concessional rate of 12 per cent GST, instead of 18 per cent, would be imposed on it.
Works contract is a service contract involving the supply of goods to execute it. That makes the works contract a combination of service and movement of goods.
The authority observed that nothing in the memorandum of understanding (MoU) or other documents reveals that CoPT has received any consideration for the services in the form of grants from the central government and as such it is not eligible for exemption.