Case Law Details
In re ULCCS Calicut City Infrastructure Development Private Ltd (GST AAR Kerala)
it is evident that the service rendered by the applicant as per the concession agreement is a continuous supply of works contract services and the annuity is in sum and substance is consideration for the works contract services rendered. Since the cost of construction is initially financed by the applicant the applicant is granted a concession to operate and maintain the roads for 15 years during which the entire consideration is paid to the applicant and on completion of the concession period the road is transferred to the Government. Therefore, the transfer of goods involved in the execution of the works contract happens at the time of transfer of the roads to the Government as per the concession agreement and accordingly the completion of the work contract service takes place on the date of transfer of the roads to the Government. Given the provisions of sub-section (5) of Section 31 and the Explanation (i) to sub-section (2) of Section 13 of the CGST Act, 2017; the supply is deemed to have been made on each annuity payment date to the extent covered by the payment of annuity and the applicant is liable to raise tax invoice as per provisions of sub -section (5) of Section 31 and pay GST on the annuity received by them on each annuity payment date by the due date prescribed as per provisions of Section 39 of the CGST Act, 2017.
7.9. Having determined the classification and the time of supply of the services supplied by the applicant the next issue to be determined is the rate of GST applicable to the services supplied by the applicant. The relevant portion of S1 No. 3 (iv) of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 as amended reads as follows;
“3 (iv) – Heading 9954 (Construction Services) – Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, other than that covered by items (i), (ia), (ib), (ic), (id), (ie) and (if) above supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-
(a) a road, bridge, tunnel, or terminal for road transportation for use by general public – 6% – Condition – Nil.”
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