The West Bengal Authority of Advance Ruling (AAR) held that the Contract for water loss management made with Kolkata Municipal Corporation includes construction of water distribution networks and operation, maintenance qualifications for works contract.
The applicant, Suez India Private Limited is stated to be engaged in the business of design, construction and operation and maintenance of water distribution networks for municipal bodies across India.
The applicant has sought the advance ruling on the issue Whether based on the facts of the agreement entered between the applicant and KMC, Establishment of District Meter Areas, Construction Works and Operation & Maintenance (“DB” and “O&M”) be considered as divisible supplies under the GST Laws.
The coram of Brajesh Kumar Singh and Jyoti Banik ruled that the contract for water loss management made by the applicant with Kolkata Municipal Corporation which includes construction of water distribution networks and operation & maintenance shall be treated as an indivisible single contract and qualifies for works contract as defined under clause (119) of section 2 of the GST Act.
The AAR held that the instant composite supply of works contract gets covered under entry serial number 3(iii) of the Notification No. 20/2017- Central Tax (Rate) dated 22.08.2017 [corresponding West Bengal State Notification No. 1497 F.T. dated 22.08.2017 ] and therefore shall attract tax @ 12% (Central Tax @ 6% + State Taxftax @ 6%) w.e.f. 22.08.2017.
“For the period from 01.07.2017 to 21.08.2017,the supply is taxable @ 18% (Central Tax @ 9% + State Tax @ 9%) vide entry serial number 3(ii) of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 [corresponding West Bengal State Notification No. 1135 F.T. dated 28.06.2017 ],” the AAR said.
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