2021 (2) TMI 338 - AAR - GST

Works Contract - composite supply - earthwork exceeding 75% of the contract value - Government entity or not - contract of ₹ 148.5968 crore for increasing water holding capacity of Wular lake by way of earthwork excavation in all kinds of soils like earth, clay, silt, peat, sand etc. by mechanical means - HELD THAT - It appears from Notification No. 311 dated 25/09/2012 of the Forest Department of State Government (now a Union Territory) that the recipient is constituted as an authority under section 3 (1) of the Jammu and Kashmir Development Act, 1970 for preservation and conservation of Wular Lake. The Board of the recipient, constituted the same day by Notification No. 314, ensures 100% control of the State Government (now a Union Territory). The powers and functions of the recipient are described in Govt Order No. 396 FST of 2012 dated 10/10/2012 of the Forest Department, Government of Jammu and Kashmir. They broadly conform to the function of promoting urban forestry, protection of environment and ecology entrusted to a municipality under article 243W of the Constitution. The recipient is, therefore, a Governmental Authority within the meaning of para 5(ix) of the IGST Notification. The applicant's supply, to the Wular Conservation and Management Authority is taxable under Sl. No. 3(vii) of Notification No 8/2017 Integrated Tax (Rate) dated 28/06/2017, as amended from time to time.

Summary

Issues:
1. Admissibility of the application
2. Submissions of the Applicant
3. Submission of the concerned Officer
4. Observations and findings of the Bench

Admissibility of the application:
The applicant sought a ruling on the applicability of Sl No. 3(vii) of Notification No 08/2017 - Integrated Tax (Rate) to a contract awarded for the dredging of Wular Lake. The application was found admissible under section 97(2)(b) of the GST Act, as the question raised was not pending or decided in any forum, and the concerned officer did not object to its admission.

Submissions of the Applicant:
The applicant submitted documents related to the work allotment order, emphasizing that the supply involved works contract services with earthwork exceeding 75% of the contract value. The applicant argued that the supply should be taxed at 5% based on the IGST Notification.

Submission of the concerned Officer:
The concerned officer expressed difficulty in determining if the involvement of materials in the contract exceeded 25% of the value due to insufficient information in the application.

Observations and findings of the Bench:
The Bench noted that the applicant's contract involved earthwork exceeding 75% of the value, satisfying the conditions of the Notification. The recipient, the Wular Conservation and Management Authority, was deemed a Governmental Authority based on its establishment and functions, making the supply taxable under Sl. No. 3(vii) of the IGST Notification.

Ruling:
The ruling stated that the applicant's supply to the Wular Conservation and Management Authority falls under Sl. No. 3(vii) of the Integrated Tax (Rate) Notification. The ruling's validity is subject to the provisions under Section 103 of the GST Act unless declared void under Section 104(1).

This detailed analysis of the judgment provides a comprehensive understanding of the issues addressed and the decision reached by the Authority for Advance Ruling, West Bengal.