The Authority of Advance Ruling (AAR), Karnataka ruled that the works contract service provided by the applicant to the National Centre for Biological Science (NCBS) is liable to be taxed at the rate of 9% under Karnataka Goods and Service Tax (KGST) and 9% under Central Goods and Service Tax (CGST).
The Applicant, M/s Homebale Construction and Estates Private Ltd. is a Private Limited Company incorporated under the Companies Act, 1956 and entered into a works contract agreement with National Centre for Biological Sciences for construction of Hostel building at NCBS Campus in Bangalore.
The applicant has sought advance ruling on the issue whether an applicant should charge GST @12% for service provided to NCBS as per Notification No 24/2017 Central Tax (Rate) dated 21-09-2017.
The Authority consisting of members M.P. Ravi Prasad and Mashud Ur Rehman Faruqui ruled that the work contract service provided by the applicant to the National Centre for Biological Science (NCBS) is liable to be taxed at the rate of 9% under Karnataka Goods and Service Tax (KGST) and 9% under Central Goods and Service Tax (CGST). M.P. Ravi Prasad
“NCBS is neither set up by an Act of Parliament or State Government nor is established by the government. Further, the council which administers this institute has only four members appointed by the Government and hence the Government does not have more than 90% control over it. One more important point to note in that this institute is not established to carry out a function entrusted by the Government. Hence, for all these reasons NCR is not covered under the definition of a “Government Entity,” the authority remarked.
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