Sri Avantika Contractors (I) Limited. Vs Appellate Authority for Advance Ruling (GST) and others. (Telangana High Court)
Telangana High Court held that consideration received towards ‘works contract service of construction’ which was completely executed outside the territory of India is outside the purview of GST. Accordingly, GST not leviable.
Facts-
The Government of India (GoI) entered into Memorandum of Understanding (MoU) with Government of Maldives for constructing a Police Academy funded by the GoI. In turn, the GoI appointed respondent No.2 i.e., National Buildings Construction Corporation Ltd., (NBCCL) to execute the construction of Police Academy by itself or through a contractor. NBCCL awarded contract to the petitioner.
In order to complete the work at Republic of Maldives (Maldives), the NBCCL set up an office and in turn the petitioner also set up their office at Addu city, Maldives. The Authorized Dealer Bank {Oriental Bank of Commerce (OBC)}, which is acting on behalf of Reserve Bank of India approved the establishment of branch office of petitioner in Maldives.
The stand of the petitioner is that it exported various goods to its Maldives office. The turnover of such goods was declared under the GST as ‘zero rate supplies’. The petitioner treated the consideration received towards ‘works contract service of construction’ which was completely executed in the territory of Maldives through their Maldives establishment as outside the scope of GST laws of India. Respondent No.2 did not pay GST on the construction to the petitioner and also opined that supplies rendered outside India are beyond the purview of GST.
