The West Bengal Authority of Advance Ruling (AAR) ruled that a 5% tax applicable to the Irrigation and Flood control Department, Govt of Jammu & Kashmir.
The Irrigation and Flood control Department, Govt of Jammu and Kashmir has awarded the applicant, Reach Dredging Ltd. a contract for the construction of channels across Hokersar Wetland along the old alignment from RD 13182m to RD 16713m of flood spill channel, including its side slope protection and dredging of drainage flowing into Hokersar Wetland.
The applicant submits work allotment order and related documents. He provides a price schedule that describes the work and its value and argues that he is supplying works contract service involving earthwork in excavation and re-excavation of the drainage channels, and it consists of more than 75% of the value of the contract.
The applicant seeks a ruling on whether Sl No. 3 (vii) of Notification No 8/2017 Integrated Tax (Rate) dated June 28, 2017, as amended from time to time, applies to the above supply.
The AAR observed that Entry No. 3 (vii) of the IGST Notification provides that a supply is taxable at the rate of 5% if the contract is a composite supply of works contract as defined under section 2(119) of the GST Act, involving earthwork exceeding 75% of the contract value and the recipient is the Central Government, State Government, Union Territory, a government authority or a government entity.
The two-member bench of Susmita Bhattacharya and Parthsarthi Dey ruled that the applicant’s supply to the Irrigation and Flood control Department, Govt of Jammu and Kashmir, is taxable under Entry No. 3(vii) of Notification No 8/2017 – Integrated Tax (Rate) dated 28/06/2017, as amended from time to time.
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