GST WORKS CONTRACTS IN RESPECT OF PUBLIC UTILITY BUILDING

[giri gattupalli]

Respected Sir,

One of my client executed works contract for Tirumala Tirupathi Devasthanams for Peligrim accommodation building in the year 2020 and paid GST @  12% and now the GST Department is asking for 18% rate of tax as the TTD is not a Government Department and I request to you please clarify the rate of tax whether it is 12% or 18% in respect of works contract provided for construction of public utility building.

Thanking you Sir,

[Shilpi Jain]

Whether the demand is raised u/s 73 or 74? In case of allegation of fraud see if you can contest that there is no suppression in the present case so the demand is time barred.

[giri gattupalli]

thank you madam. please confirm rate of tax above discussed instance . works contract is in relation to public utility and accomodation  building in tirumala . and TTD  is not a govt entity and has a GST NO also.

thank you

[Pinnacle Tax Advisor]

Composite supply of works contract as defined in clause (119) of Section of CGST Act, 2017, provided to other than the central government or state government, is liable to GST @18%

[Sadanand Bulbule]

Legal Position

1. Entry 3(vi) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 (as amended):

GST @ 12% is applicable on works contract services provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity by way of construction of educational, clinical, art or cultural establishment, or residential complex predominantly meant for self-use or use of staff, etc.

2. TTD status:

TTD is a statutory autonomous trust, created under the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act.  It is not a Government department. Courts have held that such Devasthanams are not “Government” or “Governmental Authority”, though they may be a “public religious institution”.

3. General Works Contract Rate:

Where the recipient is not Government / Governmental authority, the concessional 12% rate does not apply. The applicable rate is 18% (9% CGST + 9% SGST) on works contract services [residuary entry under Notification No. 11/2017].

AI Summary

GST rate on works contracts: concessional rate applies only when recipient is government; otherwise standard rate applies. Notification entry granting a concessional rate applies only when the recipient is a government, governmental authority, local authority or government entity; a statutory autonomous trust like the Devasthanam is not a government entity, so the concessional rate does not apply and the works contract supplied to such recipient is taxable at the general rate for composite works contract services.