GST exemption on Water supply and Sewage projects

[N Balachandran]

Sir

We are EPC contractor executing Drinking water supply projects involves supply of pipes and laying including civil works and also under Under ground drainage projects for Govt authority including Municipal corporations.

Question is :

1. GST is applicable on the above projects if so , What is rate of GST is applicable ?

As per recent Notification No 13/2023-Central Tax (Rate) dt 19 10 2023, Nil rate of GST is granted to

a) Water supply

b) Public Health

c) Sanitation converancy

d) Solid waste Management and

e) slum improvement and upgradation. vide 3B of Chapter 99 (amended the Notificaiton No 12/2017-Central Tax (Rate) dated 28th June 2017.

in view of the above notification , Kindly clarify the applicable GST on the above said project

Regards

N Balachandran

AI Summary

GST exemption for water supply may not cover works contract services unless recipient and supply nature meet exemption criteria.
Whether GST exemption applies to drinking water and drainage projects depends on characterisation of the supply and recipient. The nil-rate entry covers services provided by way of water supply and related public services, but does not automatically include contracts classifiable as Works Contract Services. Each exemption entry must be tested against contractual terms, factual composition of goods and services, and whether the recipient and the nature of supply match the specific description.