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GST : Government of Rajasthan has awarded to applicant a works contract for construction of road on DBOT basis and State Government has also awarded work of operation and maintenance (O & M) of said road for a period of 10 years. The whole project can be divided into two phases - (i) construction phase and (ii) O&M phase. Activity of appellant having nexus with annuity is classifiable under SAC 9967 and the one having nexus with construction payments during construction phase is works contract which is taxable under Notification No. 11/2017-Central Tax(Rate) dated 28-6-2017 under SAC 9954
• Thus, Annuity payments are exempted by virtue of Entry No. 23A of Notification No. 12/2017-Central Tax(Rate) dated 28-6-2017. However, only 50 percent ITC of GST paid on Input and Input service used in the construction phase is available to appellant subject to provisions of section 17(5) of the CGST Act, 2017. Further, full ITC of GST paid on the inputs and input services used in the O&M phase is available to the appellant subject to the provisions of section 17(5) of the CGST Act, 2017.