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Upgradation services of Jalda Kothi Landing Centre provided to government entity would be exempt under GST

June 12, 2019[2019] 106 taxmann.com 110 (AAR - WEST BENGAL)
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GST : Where applicant was awarded a contract by State Fisheries Corporation Limited for upgradation of Jalda Khoti Landing Centre at confluence of Mandarmoni River and Bay of Bengal which included construction of spurs for providing protection against land erosion and improving navigability by dredging channel, exemption under Sl. No. 3A of Notification No. 9/2017 - Integrated Tax (Rate) dated 28-6-2017, as amended by Notification No. 2/2018 dated 25-1-2018 Integrated Tax (Rate) dated 25-1-2018, would apply to applicant's supply

• The West Bengal Fisheries Corporation limited had awarded the applicant a contract for upgradation of Jalda Kuti Landing Centre by protection to Mandarmani River upgradation of navigability by dredging of Mandarmani River.

• The applicant sought a ruling on whether an exemption under Sl. No. 3A of Notification No. 9/2017-Integrated Tax (Rate) dated 28-6-2017 (hereinafter the Exemption Notification), as amended by Notification No. 2/2018 dated 25-1-2018 Integrated Tax (Rate) dated 25-1-2018, applied to the above supply.

• The contract is meant for upgradation of the Jalda Khoti Landing Centre at the confluence of Mandarmoni River and Bay of Bengal. Heavy siltation at the area has eroded the navigability of the river, affecting the livelihood of a large number of fishermen, as they are facing problems in negotiating the channel with their fishing boats. At the same time, the landing centre needs to be protected from land erosion, as the river swings back to the bank at the Jalda Khoti area. The applicant's supply involves the construction of spurs for providing protection against land erosion and improving navigability by dredging channel. It is a works contract, intended to construct, improve/alter the immovable property, and involves the supply of goods such as granite stone, boulders, polypropylene gabions, nylon crates and filaments. It further involves supply of services like dredging, loading/unloading and transportation of the excavated material etc. It is, therefore, a composite supply of goods and service.

• The recipient is engaged in the development of fisheries. The term 'fisheries' is typically defined in terms of the people involved, species or type of fish, area of water or seabed method of fishing, class of boats, the purpose of the activities or a combination of the preceding features. The occupation of fishing and fisherman are included in the ambit. The upgradation of Jalda Kothi Landing Centre and the related work that has been awarded to the applicant has a direct nexus with fisheries development. It is, therefore, activity in relation to the development of fisheries - a function listed under Sl. No. 4 of the Eleventh Schedule, and, therefore, entrusted to a panchayat under Article 243G of the Constitution of India.

• Exemption under Sl. No. 3A of the Exemption Notification is, therefore, applicable to the Applicant's supply of the above works contract service.

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