GST on sub-contract of design, testing, commissioning of transmission of towers awarded to principal contractor by state government entities

In re P.S. Electricals (GST AAR Karnataka)

Question 1- What is rate of tax applicable to the composite supply of works contract as defined in clause (119) of Section 2 of Central Goods and Services Act, 2017 (The Act), undertaken by the supplier (applicant) ie., whether the GST rate 18% or 12% is to be charged by the supplier?

Facts

Applicant entered into subcontract agreement with M/s Mega Engineering and Infrastructures Limited (herein after called “Principal Contractor, for design, testing, commissioning of transmission of towers and was awarded the following subcontract works by the Principal Contractor on 12-10-2018 to execute the substation and terminal bay works.

The above said works were mainly awarded to the Principal Contractor by the state government entities such as Krishna Bhagya Jala Nigam Limited, Karnataka Neeravari Nigam Limited and Karnataka Power Transmission Corporation Limited. The said works has been awarded prior to GST but the same have been amended during the post GST period.

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