Uranium Corp. of India Govt Entity; GST 5% on Earthwork Orders

The ruling concluded that M/s. Uranium Corporation of India Ltd. is considered a Government Entity as 100% of its equity is held by the President of India. Additionally, the work order involving predominantly earthwork, with more than 75% of the total value, is subject to a GST rate of 5% as per the relevant notification under the GST Act.

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Issues Involved:
1. Whether M/s. Uranium Corporation of India Ltd. comes under the purview of a Government Entity.
2. What will be the rate of GST on the specified work order.

Issue-wise Detailed Analysis:

Issue 1: Whether M/s. Uranium Corporation of India Ltd. comes under the purview of a Government Entity.

The applicant sought clarification on whether M/s. Uranium Corporation of India Ltd. (UCIL) qualifies as a Government Entity. According to the definition provided in the notification, a "Government Entity" is defined as an authority or a board or any other body including a society, trust, or corporation which is either (i) set up by an act of Parliament or State Legislature, or (ii) established by any government, with 90% or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, or Local Authority. In this case, it was established that 100% of the equity share of UCIL is held by the President of India. Therefore, the ruling concluded that UCIL is indeed a Government Entity.

Issue 2: What will be the rate of GST on the specified work order.

The applicant also sought an advance ruling on the applicable GST rate for the work order awarded for raising the western side tailing dam at Turamdih. The work order involved predominantly earthwork, constituting more than 75% of the total value. The relevant notification (No. 39/2017) under the GST Act specifies that composite supply of works contract involving predominantly earthwork (i.e., more than 75% of the value) provided to the Central Government, State Government, Union territory, local authority, a Governmental Authority, or a Government Entity is subject to a GST rate of 5%.

The ruling examined the nature of the work order, which included tasks such as clearing of the site, excavation, and supplying and laying of earth and impervious clay. The major part of the contract, approximately 96%, involved earthwork. Therefore, the work order qualified for the benefit of Serial No. 3 of notification 39/2017, and the applicable GST rate was determined to be 5%.

Ruling:

1. M/s. Uranium Corporation of India Ltd. is a Government Entity as 100% of its equity is held by the President of India.
2. The work order No. T-964 dated 20.06.2017 awarded to M/s. P.K. Agarwala, which involves more than 75% earthwork, is subject to a GST rate of 5%.

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