In re Rockline construction (GST AAR Maharashtra)
In this case, M/s. Rockline Constructions sought an advance ruling from the Maharashtra Authority for Advance Ruling (AAR) regarding the GST treatment of services provided to Katol Nagar Parishad under an Underground Sewerage Scheme for Katol Town executed under the Urban Infrastructural Development Scheme for Small and Medium Towns (UIDSSMT). The applicant raised four questions concerning the nature of the supply, the status of the recipient, whether the activity related to functions entrusted to a Panchayat or Municipality, and eligibility for exemption under Entry 3A of Notification No. 12/2017-Central Tax (Rate).
The applicant was engaged in constructing sewerage infrastructure, including sewer networks, house connections, wet wells, pump houses, sewerage treatment plants, pumping machinery, rising mains, and related civil and electro-mechanical works. The contract value was ₹41.43 crore. Based on tender estimates, the aggregate value of materials was ₹463.47 lakh against a total work value of ₹4,146.66 lakh, resulting in a material component of 11.17% on an aggregate basis.
The AAR examined Entry 3 and Entry 3A of Notification No. 12/2017-CT(R). It held that the applicant’s activity could not be treated as a “pure service” because the contract involved supply of goods such as pipes, pumps, electrical and mechanical equipment, along with construction and installation activities. The activity therefore qualified as a works contract under Section 2(119) of the CGST Act and constituted a composite supply of goods and services. Consequently, exemption under Entry 3, which applies only to pure services, was unavailable.
