GST works contract classification and time of supply determine taxability, exemption availability, and the applicable amended rate.

The ruling states that Urban Improvement Trust, Kota does not qualify as a Government Entity for the GST entry relied upon, so the concessional treatment linked to that status is unavailable. It further concludes that construction of a Community Hall for the Trust is a taxable works contract service, with no exemption available on the facts found under the amended rate notification. On the rate-change issue, the applicable GST rate is determined by the time of supply under the CGST Act, so the amended rate applies prospectively from 01.01.2022, while supplies whose time of supply arose earlier remain under the previous rate.

---

---

Issues: (i) Whether Urban Improvement Trust, Kota is a Government Entity; (ii) Whether construction of a Community Hall for Urban Improvement Trust, Kota is a taxable supply and whether any exemption is available; (iii) Whether the change in GST rate during execution of a fixed-price works contract applies prospectively or retrospectively.

Issue (i): Whether Urban Improvement Trust, Kota is a Government Entity.

Analysis: The Authority examined the statutory constitution of the Trust under the Rajasthan Urban Improvement Act, 1959 and the definition of "Government Entity" under Notification No. 31/2017-Central Tax (Rate) dated 13.10.2017. It held that the Trust was established by the Government of Rajasthan and functions as a body corporate created for urban development, but in the ruling it did not satisfy the definition of Government Entity for the purposes of the applicable GST notification entry relied upon by the applicant.

Conclusion: Urban Improvement Trust, Kota is not treated as a Government Entity for the present ruling.

Issue (ii): Whether construction of a Community Hall for Urban Improvement Trust, Kota is a taxable supply and whether any exemption is available.

Analysis: The Authority considered the relevant entry in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 22/2021-Central Tax (Rate) and the nature of the work as construction of a civil structure. It concluded that the amended notification excluded the concessional treatment earlier available to supplies made to a Governmental Authority or Government Entity, and that the construction of the Community Hall fell within the taxable service category with no applicable exemption or deduction on the facts found.

Conclusion: The construction service is taxable and no exemption is available to the applicant.

Issue (iii): Whether the change in GST rate during execution of a fixed-price works contract applies prospectively or retrospectively.

Analysis: The Authority applied Sections 13 and 14 of the Central Goods and Services Tax Act, 2017, together with the amending notification that came into force on 01.01.2022. It held that the applicable rate depends on the time of supply, and that the reduced rate ceased from the effective date of amendment. Accordingly, supplies whose time of supply arose on or after 01.01.2022 attracted the revised rate, while supplies completed on or before 31.12.2021 remained governed by the earlier rate.

Conclusion: The revised rate applies prospectively from 01.01.2022 according to the time of supply.

Final Conclusion: The ruling sustains taxability of the works contract and applies the amended GST rate by reference to the time of supply, while denying the claimed exemption.

Ratio Decidendi: For a works contract covered by an amended GST notification, concessional treatment depends on the statutory classification of the recipient and the applicable notification entry, and the governing rate is determined by the time of supply under the Act rather than by the date of the underlying contract alone.

---