Case Law Details
In re Dharti Dredging and Infrastructure Ltd. (GST AAR Kerala)
The Authority for Advance Ruling (GST AAR Kerala) has issued a ruling on the GST implications of the transfer of sand and mud extraction rights by the Irrigation Department of the Government of Kerala. In this case, M/s. Dharti Dredging and Infrastructure Ltd., a private limited company awarded a tender for desiltation of Mangalam Reservoir, sought clarification on the tax treatment and liability. The ruling provides insights into the applicable exemption notification and the reverse charge mechanism.
The ruling clarifies the classification and rate of GST for the service provided by the Kerala Irrigation Department. It determines the supplier and recipient of service based on the terms of the contract and relevant definitions in the CGST Act. The classification of the service is determined under Heading 997337 of the Scheme of Classification of Services, attracting an 18% GST rate. Furthermore, the ruling addresses the liability to pay tax, establishing that the recipient, Dharti Dredging and Infrastructure Ltd., is liable to pay GST under reverse charge basis.
Based on the ruling by the GST AAR Kerala, the transfer of sand and mud extraction rights by the Kerala Irrigation Department to Dharti Dredging and Infrastructure Ltd. is taxable under GST at an 18% rate. The company is deemed liable to pay the GST on a reverse charge basis. The ruling also clarifies that the company is not eligible for exemption under Entry No.3 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, KERALA
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