SC: Valid Bareboat Charter Termination Extinguishes Demise Charter, Vessel Arrest Vacated  ||  SC: Absence of Train Ticket No Ground to Deny Compensation for Passenger’s Death  ||  Patna HC: Routine FIR Involvement alone cannot Deny Arms Licence without Safety Threat  ||  Chhattisgarh HC: WhatsApp Chats Proving Mental Cruelty cannot be Ignored on Evidence Grounds  ||  Delhi HC: Foreign Travel Restrictions must not Obstruct Pregnant Foreigner's Medical Care  ||  MP High Court: Article 227 Cannot Be Invoked to Quash Wife’s Conjugal Rights Proceedings  ||  Kerala High Court Issues Directions on Driver Profiling, Bus Regulation and Road Safety  ||  Delhi HC: Prior Permission for Foreign Travel Unjustified When Accused Was Never Arrested  ||  Air India Penalised Rs. 50K Over De-boarding Disabled Woman and Wheelchair Damage  ||  Delhi HC: Muslim Personal Law cannot Shield Sex with Minor Wife from POCSO Case    

Clarification regarding rate of tax applicable on construction services provided to a Government Entity, in relation to construction such as of a Ropeway on turnkey basis- (Ministry of Finance ) (17 Jun 2021)

MANU/GSCU/0008/2021

Goods and Services Tax

1. Reference has been received by the Board for a clarification whether services supplied to a Government Entity by way of construction such as of "a ropeway" are eligible for concessional rate of 12% GST under entry No. 3 (vi) of Notification No. 11/2017- CT (R) dt. 28.06.2017. On the recommendation of the GST Council, this issue is clarified as below.

2. According to entry No. 3(vi) of notification No. 11/2017-CT (R) dated 28.06.2017, GST rate of 12% is applicable, inter alia, on-

"(vi) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, (other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above) provided to the Central Government, State Government, Union Territory, a local authority a Governmental Authority or a Government Entity, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration 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; "

....

2.1 Thus, said entry No 3 (vi) does not apply to any works contract that is meant for the purposes of commerce, industry, business of profession, even if such service is provided to the Central Government, State Government, Union Territory, a local authority a Governmental Authority or a Government Entity. The doubt seems to have arisen in the instant cases as Explanation to the said entry states, the term 'business' shall not include any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities. However, this explanation does not apply to Governmental Authority or Government Entity, as defined in clause (ix) and (x) of the explanation to said notification. Further, civil constructions, such as rope way for tourism development shall not be covered by said entry 3(vi) not being a structure that is meant predominantly for purposes other than business. While road, bridge, terminal, or railways are covered by entry No. 3(iv) and 3(v) of said notification, structures like ropeway are not covered by these entries too. Therefore, works contract service provided by way of construction such as of rope way shall fall under entry at sl. No. 3(xii) of notification 11/2017-(CTR) and attract GST at the rate of 18%.

Tags : CLARIFICATION   APPLICABILITY   GST  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved