No GST Payable On Work Of 'Shaheed Dwar' At Banjarawala, Dehradun: Uttarakhand AAR

The applicant, Garhwal Mandal Vikas Nigam Limited, is an undertaking of the Government of Uttarakhand. The applicant has been receiving consideration for the implementation of various projects from the government in the form of grants. The grants are utilised by way of procurement of services or goods from contractors for executing the projects.

The applicant has sought an advance ruling on the issue of whether GST is payable on the activities undertaken for the implementation of various construction, repair, renovation, addition, and alteration projects by GMVN Ltd.

Yet another issue raised was whether the supply of any service by GMVN Ltd. to the Central Government, State Government, Local Authority or Governmental Authority for which consideration is received in the form of grants is exempted from GST.

The AAR observed that GST exemption is available only if the consideration received is in the form of grants and has to be utilised for the intended purpose only. The litmus test would be the character of the consideration and if it qualifies to be a grant, then and only then, the benefit under GST Exemption under the provisions of Notification No. 12/2017-CT (Rate) dated 28.06.2017 would be available.

The AAR found that the words in the letters of the Secretary, Uttarakhand Government and Department of Empowerment of Persons with Disabilities (Divyangjan), Ministry of Social Justice and Empowerment, GOI establish that the consideration is in the form of grants.

"Exemption from payment of GST is available for the work of "Shaheed Dwar" at Banjarawala, Dehradun and the construction of "Creation of barrier-free environment for PWDs and tourist rest houses in various districts of Uttarakhand State," the AAR ruled.

Applicant's Name: M/s Garhwal Mandal Vikas Nigam Limited

Citation: Advance Ruling 02/2022-23

Dated: 01.04.2021

Click Here To Read/Download Order