In re Technocraft Construction Private Limited (GST AAR Rajasthan)
In the recent ruling concerning M/s Technocraft Construction Private Limited, the Rajasthan Authority for Advance Ruling (AAR) evaluated the applicability of Goods and Services Tax (GST) on the company’s sewerage system project in Kotputli, Rajasthan. The project involves comprehensive services, including the design, construction, and commissioning of sewerage systems and sewage pumping stations, along with maintenance and defect liability provisions. The applicant entered into a contract with the Municipal Council of Kotputli on July 24, 2023, with a total contract value of ₹1,839,205,484.
The AAR acknowledged that prior to October 19, 2023, the applicant was liable for GST payments on their services. However, an amendment to Notification No. 12/2017-CT (Rate) through Notification No. 13/2023-CT (Rate) on October 19, introduced an exemption for certain services provided to governmental authorities, including sanitation services. Technocraft Construction contended that their sewerage system services fall under this exemption as they pertain to sanitation conservancy and are provided to a local authority.
Upon reviewing the terms of the contract and the project scope, the AAR established that the services rendered by Technocraft Construction qualified as “works contract services,” which are explicitly defined in the CGST Act. The work includes a combination of supplying goods and services related to the installation of an immovable property, thus meeting the criteria for GST applicability. The applicant’s argument for exemption was analyzed against previous GST Council discussions that had previously curtailed similar exemptions.
