12% GST Applicable to Supply of Works Contracts awarded by Government and Central University of Kerala [Read Order]

Works Contracts - GST - Taxscan

The Authority for Advance Ruling ( AAR ), Kerala has held that the supply of works contracts awarded by the Government and the Central University of Kerala would attract 12 per cent GST. The authority also clarified that the supply of works awarded by a private entity for the construction of Biotech lab and administrative block at Life Science Park, Trivandrum would attract 18% GST.

The applicant, a contractor of Government projects approached the authority seeking clarification on its tax liability for works undertaken by it.

The authority noted that the work awarded by Government is subsequently given as sub-contract, by the principal contractor. The composite supply of works contract provided by a sub-contractor is also taxable (4)12% GST.

“Government Authority means any authority or a board or any other body set up by an Act of Parliament or State Legislature or established by any Government with 90% or more participation by way of equity control. The Central University of Kerala established under the Central University Act, Hence the supply work relating to the construction of non-science building for various departments at Central University of Kerala, is also taxable @12% GST. Even if the work is executed through RITES Ltd, the applicable tax rate is 12% GST,” the authority said.

It was also held that Life Sciences Park, Trivandrum is an initiative of Kerala State Industrial Development Corporation Ltd. for providing basic infrastructural facilities to research institutions, science and technology academia and companies working in the field of Bio-Technology, Nano-Technology and Life Sciences, Therefore, it is evident that the Life Sciences Park, Trivandrum is a commercial venture of the KSIDC Ltd., a State Public Sector Undertaking and accordingly the works contract services in respect of construction of Biotech lab and administrative block at Life Science Park, Trivandrum is covered under Si No. 3 (xii) – Heading 9954 of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 18%.

To Read the full text of the Order CLICK HERE