The Tamil Nadu state Appellate Authority for Advance Ruling ( AAAR ) has stated that Goods and Service Tax ( GST ) would be applicable to work contract services for the construction of residential quarters for the employees of Nuclear Power Corporation of India Ltd ( NPCIL ).
The Appellant SOM VCL was engaged in the execution of civil engineering and other general construction contracts for various Government departments and organisations. The parties SOM Projects private limited and M/s Varindera Constructions Limited had entered into a joint venture under the name “SOM VCL(JV) “solely for carrying out the works contract service for Kudankulam Nuclear Power project, a unit of Nuclear Power Corporation of India Ltd ( NPCIL ).
The appellant stated that they were awarded a project by NPCIL, a Government entity for carrying construction of residential quarters for residential usage of their employees.
The applicant SOM VCL has sought clarification on the applicability of the concessional rate of Tax of 12% GST as per entry Sl.No. 3(vi) of Notification No. 11/2017- C.T.(Rate) as amended ruled by Authority for Advance Ruling (AAR).
Natasha Jhaver appeared on behalf of the applicant.
The Appellate Authority for Advance Ruling (AAAR) of Mandalika Srinivas, Member (Centre) And Dheeraj Kumar, Member (State) held that, as per amendment made to the entry 3(vi) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 vide Notification No. 15/202l-C.T.(Rate) dated 18.11.2021 effective from 01.01.2022, ‘Government entity’ would be omitted in the class of recipients.
Therefore, the applicable rate of tax for the above work would be 9% of COST plus 9% of SGST as per entry SI.No. 3(xii) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 (as amended) read with the corresponding Notification under TNGSTA.
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