TaxTMI 
TaxTMI 
2026 (9) TMI 1412
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.... of GST due to change in the rate of tax from 12% to 18% amounting to Rs. 45,26,398/-. On verification of Form 26AS and statement for stage-wise completion of work executed by the appellant and payments thereof, and also ascertained from the Executive Engineer of Kerala Water Authority, it was found that the invoice raised for two transactions and payments received against such invoices for the year 2021-22, were actually incurred after changing the rate of tax to 18%, even though one of the transactions was in respect of a work completed prior to 01.01.2022. The details of tax payable due to change of rate by Appellant was determined as follows: Amount in Rs. Date of work completed Date of bills raised/ Date of payment Taxable Value Tax payable (18%) Tax paid (12%) Balance payable (6%) 16.12.2021 January 2022 4,38,74,221 78,97,360 52,64,906 26,32,454 31.01.2022 February 2022 3,15,65,724 56,81,830 37,87,887 18,93,944 Total 7,54,39,945 1,35,79,190 90,52,793 45,26,398 Accordingly, a show cause notice dated 19-10-2023 was issued demanding differential GST as to why : (i) an amount of 45,26,39....
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....t is not disputed that declaration made by Kerala Water Authority in the application for registration as to their constitution as a "Local Authority" as they are deemed to be a "Local Authority" under the Kerala Water Supply and Sewerage Act 1986 and the PAN has been allotted to them under the Income Tax Act accordingly. However, since the term "Local Authority" for the purposes of GST is specifically defined in Section 2(69) of the CGST Act, 2017; Kerala Water Authority should satisfy the definition of "Local Authority" under the CGST Act in order to be eligible for the concessional rate of GST as notified under Sl No. 3(iii) of the Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended in respect of works contract services received by them. Since the Kerala Water Authority do not fall under any of the subclauses (a) to (g) of clause (69) of Section 2 of the CGST Act, 2017 and hence do not qualify as a "local authority" as defined in the CGST Act. Accordingly, he submits that the works contract services supplied to Kerala Water Authority is not eligible for the concessional rate of GST as notified under S. No. 3 (iii) of the Notification No. 11/2017-CT (Rate) dated 28.06.2....
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....ty in the category of 'local authority'. However, we are inclined to also refer to the Kerala Water Supply and Sewerage Act 1986, wherein the Section 3 of the said Act, reads as, 3. Establishment of Kerala Water Authority.- (1) The Government shall, by notification in the Gazette and with effect from such date as may be specified therein, establish an autonomous authority to be called the Kerala Water Authority. (2) The Authority shall be a body corporate by the name aforesaid having perpetual succession and a common seal, with power to acquire, hold and dispose of property, both movable and immovable, and to contract and shall by the said name sue and be sued. (3) The Authority shall for all purposes be deemed to be a Local Authority. (4) The Authority shall have its head office at Thiruvananthapuram and may have offices at such other places as it may consider necessary. 10.0 We also find that the Kerala Water Authority was established on 1st April 1984 under the Kerala water and waste water ordinance, 1984 by converting the erstwhile Public Health Engineering Department to provide for the development and regulation of water supply a....
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.... corporation or an authority created by the Parliament or a State Legislature is neither 'Government' nor a 'local authority'. Such statutory bodies, corporations or authorities are normally created by the Parliament or a State Legislature in exercise of the powers conferred under article 53(3)(b) and article 154(2)(b) of the Constitution respectively. Such a statutory body, corporation or an authority as a juridical entity is separate from the State and cannot be regarded as the Central or a State Government and also do not fall in the definition of 'local authority' for the purpose of GST Act. Thus, regulatory bodies and other autonomous entities would not be regarded as the government or local authorities for the purposes of the GST Act. 13.0 On reading of both the provisions, we find that Kerala Water Authority do not fall under any of the subclauses (a) to (g) of clause (69) of Section 2 of the CGST Act, 2017 and hence do not qualify as a "local authority" as defined in the CGST Act. 14. In view of the above, we find that KWA is a statutory body created under the Kerala Water Supply and Sewerage Act, 1986, and does not fall into any of the categories listed in Section 2(....
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....83288 ITC 31-12-2025 2036879 2036879 226320 226320 Cash Total Paid 2263199 2263199 226320 226320 18.0 We also find that since the differential tax is payable, the interest for delayed payment of tax also automatically follows. The appellant has already made payment of the differential tax amount. Hence, the appellant is also required to make payment of interest as applicable from the time of supply till the date of payment of differential tax, in terms of Section 50 (1) of the CGST/KGST Act, which reads as, 50. Interest on delayed payment of tax. (1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council. [Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the retu....