2019-VIL-332-CAL

SGST Advance Ruling Authority

GST – Rajasthan AAR – Works Contract - Pure Service Contract in relation to Water Supply - Classification of activity of Operation & Maintenance of Dam work, complete system including mechanical, electrical, instrumentation installation works switchyards/GSS and maintenance of Dam, pumping machinery, pipeline & tunnel and filter plant project on ESCO and O&M contract for Government Department – HELD - According to definition of works contract under GST regime, the supply of goods and services are done by the supplier simultaneously which is for immovable property. Hence in works contract supply of goods and services together is compulsory - in case of composite supply of goods or services, if the value of supply of goods does not exceeds 25% of the total value of supply during the contract period and if provided to State Government or a local authority and the supply is by way of an activity in relation to functions entrusted to Municipality under Article 243W of the Constitution, then no GST is applicable - The main work entrusted to applicant is maintenance of water supply and keep it working and for execute this functioning any supply of goods for repair and maintenance will continue the composite supply. Even the supply is treated as a pure supply it will be again eligible for exemption under entry No. 3 of Notification No. 12/2017-CT (R) dated 28.06.2017 - The activity of O&M Dam Project on ESCO Model and O&M work by the applicant to be undertaken for a Government Dept is activity of composite supply of goods and services and if supply of goods is below 25% out of total value of supply then GST will be Nil as per entry No. 3A of Notification No.12/2017-CT (R) dated 28.06.2017, as amended and if more than 25% of the total value of supply then GST will be @12% in consonance with entry No. 3(iii) of Notification No.11/2017-CT (R) dated 28.06.2017, as amended – Ordered accordingly

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