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Works contract service to IWAI for construction of the Multi-model IWT terminal shall be taxed at 18% GST

January 9, 2019[2019] 101 taxmann.com 137 (AAR - WEST BENGAL)
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CGST : Where applicant is supplying works contract service for an original work meant for commerce and business it will attract GST at 18 per cent rate under Serial No. 3(xii) of the Rate Notification

Facts

• Applicant is stated to be supplying works contract service. He has entered into an agreement with Inland Waterways Authority of India (IWAI) for construction of a multi-modal IWT terminal at Haldia on EPC basis. The applicant seeks a ruling on applicability of Notification No. 24/2017-CT (Rate) dated 21-9-2017 and 31/2017 – CT (Rate) dated 13-10-2017. More specifically, he wants a ruling on what should be the rate at which GST should be charged on the works contract service to be supplied for construction of the above terminal.

Held

• Amendments to Serial No. 3(vi) of Notification No. 11/2017–CT (Rate) dated 28-6-2017, brought about by Notification No. 24/2017-CT (Rate) dated 21-9-2017 and 31/2017 –CT (Rate) dated 13-10-2017, are not applicable to the applicant's supply of works contract service for construction of the Multi-modal IWT Terminal at Haldia as applicant is supplying works contract service for an original work that is meant for commerce and business. It does not, therefore, satisfy the conditions laid down under Serial No. 3(vi)(a) of the Rate Notification which states that if it is not covered under Serial No. 3(vi) (b) or 3(vi) (c ), it should be a civil structure or an original work meant predominantly for use other than for commerce, industry, or any other business or profession. The applicant's supply of works contract service for construction of the Multi-modal IWT Terminal at Haldia, therefore, attracts GST at 18 per cent rate under Serial No. 3(xii) of the Rate Notification.

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