In re Indian Oil-Adani Gas Private Limited (GST AAAR Goa)
M/s. Indian Oil-Adani Gas Private Limited (IOAGPL), engaged in the development of City Gas Distribution infrastructure for supplying PNG and CNG, sought an advance ruling on whether GST on permission charges, reinstatement charges, road cutting charges, and ground rent charges levied by the Goa Public Works Department (PWD) is payable under the Reverse Charge Mechanism (RCM) in terms of Serial No. 5 of Notification No. 13/2017-Central Tax (Rate) dated 28 June 2017. The applicant initially contended before the Advance Ruling Authority (AAR) that Goa PWD forms part of the State Government and therefore GST on such services supplied to a business entity is payable by the recipient under RCM.
The Goa AAR ruled on 30 January 2025 that GST on all four categories of charges levied by Goa PWD is payable by IOAGPL under RCM. Aggrieved by this ruling, IOAGPL filed an appeal before the Appellate Authority for Advance Ruling (AAAR), contending, among other things, that the AAR order was invalid because it was issued beyond the 90-day period prescribed under Section 98(6) of the CGST Act. The appellant also argued that activities relating to roads are functions entrusted under Articles 243G and 243W of the Constitution and, by virtue of relevant notifications, should be treated neither as a supply of goods nor a supply of services. It further contended that the charges collected by Goa PWD were statutory and compensatory in nature, lacked the elements of “service” and “consideration,” were not undertaken in the course or furtherance of business, and therefore fell outside the scope of GST. Regarding ground rent charges, the appellant argued that they represented renting of immovable property and were specifically excluded from RCM under Serial No. 5 of Notification No. 13/2017.
