The Maharashtra Authority of Advance Ruling (AAR) has ruled that road tunnelling work by way of drill and blast technique is a composite supply.
The applicant, M/s Kapil Sons is registered under GST and engaged in drilling and blasting works at various sites using Industrial explosives and other materials. Government of Maharashtra entrusted Maharashtra State Road Development Corporation Limited (MSRDC), a corporation fully owned by Government of Maharashtra, the development, operation and maintenance of Two Tunnel (Two Tubes of four lane each) for Missing Link under Capacity Augmentation Of Mumbai to pune Expressway in Mumbai.
The applicant has sought advance ruling on the issue Whether the activity to be carried by the applicant shall be classified as supply of goods or services or a composite supply of ‘works’ contract’.
Yet another issue raised was whether the activity should be classified as Composite Supply of works contract for Construction of tunnel under Entry 3(iv) of Notification No. 11/2017-CT (Rate) dated 28.06.2017.
The coram of Rajiv Magoo and T.R.Ramnani has ruled that the main contractor has been given a contract by MSRDC to construct tunnels for Mumbai Pune Expressway and accordingly, the main contractor has subcontracted the tunneling work to the applicant by way of drill and blast technique of tunneling. In the subject case, the work is for construction of tunnels which can be considered as immovable properties belonging to the Government of Maharashtra. Further as per the work order submitted by the applicant, it clearly appears that the impugned activity carried out by the applicant can classified as composite supply of works contract for construction of tunnel. This would answer the first question raised by the applicant.
“The impugned activity carried out by the applicant is a composite supply of works contract for construction of tunnel and is covered under Entry 3(iv) of Notification No. 11/2017-CT (Rate) dated 28.06.2017,” the AAR said.
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