12% GST payable on Composite Supply of Works Contract for Construction of Tunnel: AAR [Read Order]

The Maharashtra Authority of Advance Ruling (AAR) has held that 12% GST payable on Composite Supply of works contract for Construction of tunnel.

The applicant, M/s Kapil Sons, is registered under GST and engaged in drilling and blasting works at various sites using Industrial explosives and other materials.

Government of Maharashtra entrusted Maharashtra State Road Development Corporation Limited RULING RDC), a corporation fully owned by Government of Maharashtra, the development, operation and enhance of Two Tunnel (Two Tubes of four lane each) for Missing Link under Capacity Augmentation Mumbai pune Expressway in Mumbai.

The applicant has sought the advance ruling on the issue Whether the activity to be carried by the applicant shall be classified as supply of goods or services or a composite supply of 'works' contract and whether the activity should be classified as Composite Supply of works contract for Construction of tunnel under Entry 3(iv) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 taxable at the rate of 12%.

The coram of Rajiv Magoo and T.R.Ramnani has noted that the impugned activity/supply undertaken by the applicant as per the subject Work Order received from M/s NECL is "drilling and blasting including all tools, materials, explosive vans etc. complete for approach roads and Tunnel Works".

“Since, we have held that the impugned activity carried out by the applicant can be classified as composite supply of works contract for construction of tunnel we find that the said supply will be covered under Entry 3(iv) of Notification No. 11/2017-CT (Rate) dated 28.06.2017,” the Order read.

The AAR further ruled that the impugned activity carried out by the applicant is a composite supply of works contract for construction of tunnel and is covered under Entry 3(iv) of Notification No. 11/2017-CT (Rate) dated 28.06.2017. The relevant facts, opinions and the case laws submitted by the applicant as well as the department are considered for arriving at the decision.

To Read the full text of the Order CLICK HERE

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