The Gujarat Authority of Advance Ruling (AAR) ruled that no GST payable on constructs municipal roads/bridges or village roads/bridges, as GSRDC is a Government Authority.
The applicant, M/s. Gujarat State Road Development Corporation (GSRDC) is wholly owned Government of Gujarat Company (i.e. 100% equity ownership and control held by Govt. of Gujarat) established under the Companies Act, 1956 represented by its Managing Director, hereinafter called as GSRDC. The main object of the GSRDC is to act as an independent and autonomous body for the construction and development of the roads (state highways) and bridges as a part of the activities of the Roads and Buildings Department of Government of Gujarat under the BT, BOTT or BOLT projects. GSRDC is also required to facilitate, regulate and control the use of roads, bridges and flyovers etc. and to advice the R&B Department of Govt. of Gujarat on all the issues relating to roads and assist in formulation of policies in this regard. GSRDC intends to develop 8 roads project under Public Private Partnership. GSRD seeks participation from private operators for the said projects to provide superior quality roads infrastructure at competitive prices.
The applicant has sought the advance ruling on the issue whether the service of construction and development of state highway roads provided by GSRDC would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or 243 W respectively, of the constitution of India. Whether applicants would fall under the definition of Governmental authority or Government Entity.
The coram of Sanjay Saxena and Arun Richard held that GSRDC is a Government Entity. In addition to being a Government Entity, GSRDC shall also be a Government Authority, in such cases when it constructs Municipal Roads/ bridges; and Village Roads/bridges.
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