Composite works contract dominated by earthwork qualified for concessional GST where the recipient was a Governmental Authority.

A dredging and excavation contract for Wular Lake qualified as a composite works contract dominated by earthwork, because material involvement was below 2% of the work order and the work related to improvement of immovable property. The recipient was treated as a Governmental Authority, being constituted under the Jammu and Kashmir Development Act, under full governmental control, and performing functions aligned with Article 243W. On that basis, the supply fell within entry 3(vii) of Notification No. 8/2017-Integrated Tax (Rate), and the concessional GST rate was available.

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Issues: Whether the applicant's dredging and excavation contract for Wular Lake qualified for concessional GST under entry 3(vii) of Notification No. 8/2017-Integrated Tax (Rate), and whether the recipient was a Governmental Authority.

Analysis: Entry 3(vii) applies only to a composite works contract involving earthwork exceeding 75% of the contract value and supplied to the Central Government, State Government, Union Territory, a governmental authority, or a government entity. The contract documents and the certification on record showed that the work was predominantly earthwork excavation, with material involvement below 2% of the total work order, and it related to improvement of an immovable property. The recipient authority was constituted under section 3(1) of the Jammu and Kashmir Development Act, 1970, was under full governmental control, and performed functions aligned with those entrusted to a municipality under Article 243W of the Constitution of India. On that basis, the authority answered the statutory description of a Governmental Authority for the notification entry.

Conclusion: The supply was held to be taxable under Sl. No. 3(vii) of Notification No. 8/2017-Integrated Tax (Rate), and the concessional rate was available.

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