Construction Of Administrative Buildings For TSIIC Attracts 18% GST: AAR

The two-member bench of B. Raghu Kiran (Central Tax) and S.V. Kasi Visweswara Rao (State Tax) has observed that the works contract executed by the applicant for construction of Administrative building for TSIIC falls under Sr. No. 3(vi) of Notification No. 11/2017-CT (Rate) as amended till date and therefore taxable at the rate of 6% under CGST &  SGST each.

"However for works executed from 01-01-2022, the rate shall be 9% under CGST & SGST each as the Phrase 'Governmental authority or Governmental entity' is excluded, vide notification Number. 15/2021, dated.18.11.2021," the AAR added.

The applicant has been into the business of works contracts and has executed works for TSIIC. The applicant in this contract has constructed an administrative building for the TSIIC.

As per the Memorandum of Association filed by the applicant TSIIC is owned by the Government of Telangana with paid up equity share capital of the Government of Telangana in excess of 90%. Therefore it is opined by the applicant that they have executed works to a Government entity and hence qualify for a lower rate of tax at the rate of 12%

The applicant has sought the advance ruling on the issue that whether the Construction of Administrative buildings provided by the applicant to TSIIC is eligible to avail the concessional rate of GST at 12% as prescribed in S.No. 3 (vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017.

Applicant's Name: M/s. Siddhartha Constructions

Citation: TSAAR Order No.10/2022

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