Works contract classification for dredging and earthwork services qualifies for concessional GST rate under the notification.

Supply of construction, dredging and earthwork excavation services was treated as a works contract for improvement of immovable property. On the material on record, the contract was substantially made up of dredging and earthwork excavation, with material content stated to be below 15% of the work value, so the condition requiring earthwork to exceed 75% of the contract value was satisfied. The recipient being a Union Territory also met the recipient requirement in the notification. The supply therefore fell within Entry No. 3(vii) of Notification No. 8/2017-Integrated Tax (Rate) and qualified for the concessional rate.

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Issues: Whether the applicant's supply of construction, dredging and earthwork excavation services to the Irrigation and Flood Control Department of Jammu and Kashmir was covered by Entry No. 3(vii) of Notification No. 8/2017-Integrated Tax (Rate) dated 28/06/2017 and taxable at 5%.

Analysis: The supply was examined as a works contract involving improvement of immovable property. The materials placed on record showed that the contract was substantially composed of dredging and earthwork excavation, with the involvement of material stated to be less than 15% of the total value of the work. The contract therefore satisfied the requirement that earthwork should exceed 75% of the contract value. The recipient was a Union Territory, which satisfied the recipient condition in the entry. The supply thus met all conditions prescribed by the notification for the concessional rate.

Conclusion: The supply is covered by Entry No. 3(vii) of Notification No. 8/2017-Integrated Tax (Rate) dated 28/06/2017 and is taxable at the notified concessional rate.

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