12% GST on Construction of Airport Authority of India Residential Colony for self-use or for Staff / Employees: AAR [Read Order]

GST- Construction of Airport Authority of India residential colony -AAR - Taxscan

The Karnataka Authority of Advance Ruling (AAR) ruled that 12% GST on Construction of Airport Authority of India residential colony for self use or for staff/employees.

The applicant, B.G Shirke Constructions Technology Private Limited has been awarded a contract by the Airport Authority of India and entered into agreement for the construction of a residential colony at Devanahalli, near Kempegowda International Airport. The said residential colony is to be set-up/ constructed for the employees / staff of Airport Authority of India.

The applicant has sought the advance ruling in respect of the applicable GST rate on construction of AAI residential colony at Devenhalli, near Kempegowda International Airport, Bengaluru by the applicant for Airport Authority of India.

The Coram of Dr. M.P.Ravi Prasad and Mashood Ur Rehman Farooqui ruled that construction of Airport Authority of India residential colony for self use or their staff/employees at Devenhalli, near Kempegowda International Airport, Bengaluru by the applicant for Airport Authority of India attracts tax at the rate of 12% as per Notification No. 11/2017 – Central Tax (Rate) dated June 28, 2017 (6% CGST and 6% KGST) as amended by Notification No. 24/2017 – Central Tax (Rate) dated the September 21, 2017.

“The Airport authority of India being recipient of service fulfils the parameters as mentioned in the Notification No.31/2017-CT(R) dated 13.10.2017 vide paragraph (iii) item number (ix) as “Governmental Authority”. The said authority is a statutory body set up by an Act of Parliament vide Airport Authority of India Act, 1994. Section 12 of the said Act provides for functions of the authority. The said activity of the construction of residential colony for the staff and employees of Airport authority of India at Devanahalli, Near Kempegowda International Airport is covered under article 243 W of the Constitution,” the AAR observed.

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