Case Law Details
In re Vishal Infra Structure limited (GST AAR Karnataka)
The applicant is undertaking a contract of works contract of construction of a civil structure or any other original works for the Airport Authorities of India. The Department of Personnel and Training, Government of India has shown in the company profile that the shareholding of the Government of India in the Airport Authorities of India is 100% and hence the AAI is a Government Entity.
Further, the issue is whether the constructed works is a civil structure or any other original works. The runway and the apron etc are structures which bear the load of the aircraft and provide a stable surface for the aircraft to operate. These are, therefore, civil structures. As per the AAI letters submitted by the applicant it is clear that the applicant is engaged in the extension of the runway and construction of new aprons and allied areas. Extension of the runway requires a new construction to be carried out and so does the apron and other areas. Therefore the applicant is enaged in construction of new civil structures.
The applicant is, therefore, engaged in construction of new civil structures. The activities carried out by the applicant are covered under the relevant serial number of the Notification.
The next issue is whether these works are meant predominantly for use other than for commerce, industry, or any other business or profession? In this regard, the original works done by the applicant are for use by the Airports Authority of India for supplying services to the Airway operations and hence is in the course of business. The airlines that use the runway and the aprons etc constructed by the applicant work with a view to earn profits. They are engaged in commerce and ess. Entry at Serial number 3(vi)(a) specifically provides that works be ‘meant predominantly for use other than for commerce, industry, or any other business or profession’. As the works carried out by the applicant are used in the process of commerce and business, the applicant does not qualify for the works to be classified under Serial number 3(vi)(a). The Hence the works contract performed by the applicant cannot be considered as covered under Serial No. 3(vi) of the Notification No. 11/2017 – Central Tax dated 28.06.2017 liable to tax at 6%, but are more appropriately covered under Serial No.3(ii) of the of the Notification No. 11/2017 – Central Tax dated 28.06.2017 liable to tax at 9%.
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