In re Shree Constructions (GST AAR Telangana)
18% GST payable on works contract service of constructing warehouse & cold storage for Govt. entity which will be rented out
GST on contract for construction of ware house & cold storage by TSIICL
The Telangana State Authority of Advance Ruling (“the TSAAR”) in M/s Shree Constructions [TSAAR Order No.56/2022 dated December 8, 2022] held that rate of the Goods and Services Tax (“GST”) payable on works contract services for constructing warehouses, cold storage and godowns for Telangana State Industrial Infrastructure Corporation Limited (“TSIICL”), would be 18%.
Facts:
M/s Shree Constructions (“the Applicant”) is engaged in the business of works contracts. The Applicant entered into a contract with TSIICL for constructing warehouses and cold storage godowns for TSIICL, which would later be let out by TSIICL.
TSIICL is wholly owned by the Government of Telangana and therefore, the supply of works contract service would be to Government entity. In this regard, the Applicant sough advance ruling under Section 97 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) on the rate of tax applicable to supplies made to such Government entity.
Issue:
What would be the rate of tax on the supply of works contract to the government entity?
Held:
The TSAAR discussed and held as under:
