The West Bengal Authority for Advance Ruling (AAR) ruled that the Composite supply of works contract to local authority by erection, installation, and maintenance of a sewerage treatment plant attracts 12% GST.
The applicant M/s KSB Limited, is engaged in the business of manufacturing & selling pumps for various applications. They also provide services in relation to installation, commissioning, repair & maintenance of such pumps. Their manufacturing facility is located in Maharashtra & Tamil Nadu, and they have warehouses at different states, including West Bengal, from where they make the supply to their customers. The applicant is engaged in the business of manufacturing and selling pumps for various applications.
The applicant has sought advance ruling on whether supply for construction of a sewerage treatment plant which involves supply of pumps as well as installation and commissioning work attracts GST rate of 12% in terms of Notification No. 11/2017-CT (Rate) dated 28/06/2017 read with of Notification No. 20/2017-CT (Rate) dated 22/08/2017.
The applicant contended that the instant supply is a composite supply comprising supply of goods and services both and such supply is related to immovable property thereby qualifies as „works contract‟ as defined in section 2(119) of the GST Act. The instant supply, therefore, would attract tax @ 12% in terms of entry-3(iii) of the Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017 read with Notification No. 20/2017- Central Tax (Rate) dated 22nd August 2017.
Section 2(119) of the West Bengal Goods and Services Tax Act, 2017 defines works contract as: “works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.
A Two-Member Bench of the Authority comprising Sarthak Saxena, Joint Commissioner, CGST & CX and Joyjit Banik, Senior Joint Commissioner, SGST observed that “The instant supply qualifies as a composite supply of works contract as defined in clause (119) of section 2 of the GST Act made to a local authority by way of erection, installation, and maintenance of a sewerage treatment plant and would be taxable at the rate specified in serial number 3(iii) of Notification No. 11/2017-CT (Rate) dated 28/06/2017 read with Notification No. 20/2017-Central Tax (Rate) dated 22/08/2017, as amended from time to time, subject to the provisions of section 14 of the GST Act.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
