GST on Works Contract Services to Irrigation Sub-contractor at 18%
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- Last Updated on 24 April, 2023
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Case Details: Shreeji Earth Movers, In re - [2023] 149 taxmann.com 361 (AAAR-GUJARAT)
Judiciary and Counsel Details
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- Samir Vakil & Vivek Ranjan, Member
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Ramesh Rakholiya, Adv. for the Appellant.
Facts of the Case
The appellant is engaged in providing works contract services directly to the sub-contractor who is executing the contract on behalf of the main contractor. The said main contractor had entered into the original works contract with the irrigation department of the State of Gujarat.
The appellant has approached the Gujarat Appellate Authority of Advance Ruling (‘AAAR’) wherein the Authority of Advance Ruling had denied the benefit of concessional rate of 12% as per Notification No. 11/2017-Central Tax (Rate), dated 28-06-2017 and held that GST at the rate of 18% would be applicable.
AAAR Held
The Gujarat AAAR observed that the appellant is not engaged directly as a contractor or as a sub-contractor of main contractor by State Government of Gujarat for supply of works contract pertaining to irrigation Department. Further, there is no direct nexus between the appellant and the Government authority since the documents reveal that the appellant is supplying services on the basis of works contract of a sub-contractor and not directly from main contractor who had originally received contract from Irrigation department of State Government of Gujarat.
Given the above, the Gujarat AAAR held that the appellant is not eligible for concessional rate of GST at 12 % and affirmed the ruling by the Gujarat AAR.
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