GST: Place of Supply is Location of recipient in case of Construction of Immovable Property Outside India, rules AAR [Read Order]

Construction of Immovable property - AAR - Taxscan

The Telangana Authority of Advance Ruling (AAR) ruled that the place of supply is Location of the recipient in case of Construction of Immovable property Outside India.

The applicant, M/s. Sri Avantika Contractors Limited are engaged in construction services providing works contract services. They have secured a contract from National Buildings Construction Corporation Limited (NBCCL) Delhi for constructing a building at Addu City, Maldives.

As per the understanding of the applicant, recipient of construction service is the Government of Maldives as the institute is being constructed as part of assistance from Government of India to Government of Maldives. Further as per the GST Act, 2017, the supply of services are taxable only within the territory of India. And therefore the supply of this service outside India does not constitute taxable supply.

They further contend in the application that the recipient of the service is the Government of Maldives as they would be ultimate owners of the constructed building and hence the place of supply would be Maldives in terms of Section 13(4) of IGST Act, 2017.

The applicant has sought the advance ruling on the issue whether the construction of Institute of Security and Law Enforcement studies at Addu City in Maldives, constructed for Government of Maldives under an Memorandum of Understanding between India and Maldives falls within the GST net; and What is the place of supply in respect of the works contract for setting up of (he Institute of Security and Law Enforcement Studies at ADDU City in Maldives.

The coram of S. V. Kasi Visweshwar Rao and B. Raghu Kiran ruled that the applicant who is the supplier of service & NBCCL who is recipient of service are located in India and therefore the place of supply is to be determined under Section 12 of the IGST Act. The provision to Sub-Section (3) of Section 12 of IGST Act clearly mentions that if the location of immovable property is intended to be located outside India, the place of supply shall be the location of the recipient. Therefore the supply by the applicant to the NBCCL is within the ambit of GST.

The AAR further added that the applicant who is the supplier of service & NBCCL who is recipient of service are located in India and therefore the place of supply is to be determined under Section 12 of the IGST Act, The proviso to Sub-Section (3) of Section 12 of IGST Act clearly mention that if the location of immovable property is intended to be located outside India, the place of supply shall be the location of the recipient i,e. NBCCL.

Subscribe Taxscan AdFree to view the Judgment

Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.

Related Stories