In re House Construct Infra (Legal Name Krishnappa Gangadhar) (GST AAR Karnataka
The Authority for Advance Ruling, Karnataka, examined the taxability of pure labour services supplied for construction-related activities to single standalone residential dwelling units. The applicant was engaged exclusively in providing pure labour services without supplying any materials or goods. The services were rendered only to individual owners of single residential units and not to residential apartments, complexes, or housing projects.
The applicant sought clarification on whether such services would be liable to GST. The applicant relied on Entry Serial No. 11 of Notification No. 12/2017-Central Tax (Rate), which provides exemption for services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit, provided such services are not part of a residential complex.
The Authority examined the relevant legal provisions, including the definitions of “original works,” “residential complex,” and “single residential unit” under the notification. “Original works” include new construction and installation activities. A “residential complex” refers to a building or group of buildings having more than one residential unit, while a “single residential unit” is defined as a self-contained unit intended for use by one family.
The Authority identified essential conditions for claiming exemption under the notification. First, the service must be a pure labour contract, meaning there should be no transfer of property in goods or supply of materials. Second, the services must relate to construction, erection, commissioning, or installation activities. Third, such activities must pertain to original works. Fourth, the services must be provided to a single residential unit and not as part of a residential complex.
