Case Law Details
In re Ashis Ghosh (GST AAR West Bengal)
In terms of the description of the work, contained in the work orders, the Applicant is required to fill in the foundation or plinth by silver sand in layers and consolidating the same by saturation with water ramming. The work also involves earth work for filling in the compound, tank, low land, ditches etc. with good earth spread in layers, including breaking clods and consolidating the same by ramming and dressing. It is, therefore, not a contract for the supply of goods, but the transfer of property in such goods in the course of preparing the site for construction of the New Central Correctional Home at Baruipur. It, therefore, amounts to improving and modifying land — an immovable property and is works contract, as defined under section 2(119) of the GST Act.
The Applicant’s reference to the order of the AAR is not relevant. SI No. 3 (vii) of Notification No. 39/2017-IGST dated 13/10/2017 applies to works contracts, where the earthwork constitutes more than 75% of the value of the contract. As evident from the table in para no. 2.2, the earthwork constitutes less than 25% of the value of the Applicant’s contracts with MBL. Moreover, the State Government holds only 51.01% of the shares of MBL, which qualifies it as a State Government Company for the purpose of the Companies Act, 2013, but does not make it a government authority or a government entity, as defined in Explanation 4(ix) and 4(x) respectively.
The Applicant’s supply is, therefore, classifiable as site preparation service (SAC Group 99543) and taxable @ 18% under SI No. 3(xii) of Notification No. 11/2017-CT (Rate) dated 28/06/2017 (corresponding State Notification No. 1135-FT dated 28/06/2017), as amended from time to time. In this respect, this Authority agrees with the views of the concerned officer from the Revenue.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, WEST BENGAL
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