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Case Law Details

Case Name : In re Tirupati Construction (GST AAR Gujarat)
Appeal Number : Advance Ruling no. GUJ/GAAR/R/2022/24
Date of Judgement/Order : 18/04/2022
Related Assessment Year :
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In re Tirupati Construction (GST AAR Gujarat)

We find that the subject contract is for the construction of immovable property wherein transfer of property in goods is involved in the execution of subject contract. We hold that subject supply is works contract service. The supply comprises supply of the following: A type Fire station; A type Admin building; B type building; C type officers quarters; site development works; VDS roads; compound wall; watchman and Pump room. We hold subject supply is a composite supply of works contract service. We find that the service recipient is Surat Municipal Corporation, which we hold is a local authority.

We note that vide Explanation to Serial No 3(vi) of said NT, ‘business’ shall not include any activity or transaction undertaken by a local authority in which they are engaged as public authorities. We note that fire services is a matter listed in twelfth schedule of our Constitution and thereby a function of the Municipal Corporation. Thereby we find this activity undertaken by Surat Municipal Corporation out of the purview of business, as described at sr no 3(vi)(a) of Said NT. Also, supply of Staff Quarters is covered at 3(vi)(c) of said NT.

We note Revenue’s submission that said civil structure may be used for commerce or business. We hold that a fire station will be used for fire services function as envisaged in schedule twelfth of our Constitution and cannot be considered a commercial building. Further, as already discussed, with the explanation of term business incorporated into Sr. No 3(vi) of said NT as discussed in previous para and nothing of contrary vide a specific intelligence report submitted by Revenue that the structure supplied is for business/ commerce purpose, we find no merit in Revenue’s submission.

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, GUJARAT

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