The Chief Commissioner of State Tax, Gujarat on June 25, 2021 has issued Clarification regarding rate of tax applicable on construction Services provided to a Government Entity, in relation to construction such as of a Ropeway on turnkey basis.
According to entry No. 3(vi) of notification No. dated 11/2017-ST(R) June 30, 2017, GST rate of 12% is applicable which specifies, namely: -
“(vi) Composite supply of works contract as defined in clause (119) of section 2 of than the Gujarat Goods and Services Tax Act, 2017, (other that covered by items (i), (ia), (ib), (ic), (id), (ie) and provided (i) above) to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity, by way of construction, erection, commissioning, installation, completion, fitting out, or alteration of- repair, maintenance, renovation,
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession.”
Therefore, entry No. 3(vi) does not apply to any works contract that is meant for the purposes of commerce, industry, business of even profession, if such service is provided to the Central Government, State Government, Union Territory, a local authority or a Government a Governmental Authority Entity.
Further, works contract service provided by way of construction such as of rope way shall fall under entry at sl. No. 3(xii) of notification 11/2017-ST(R) and attract GST at the rate of 18%.
[Notification No- GSL/GST/S.168/B. 93]
