The central Board of Indirect Taxes and Customs on 17th June 2021 has clarified whether services supplied to a Government Entity by way of construction such as of “a ropeway” are eligible for concessional rate of 12% GST.
GST of 12% is applicable on Composite supply of works contract provided to the Central Government, State Government, Union Territory, a local authority a Governmental Authority or a Government Entity, by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession.
However it does apply to any works contract that is meant for the purposes of commerce, industry, business of profession, even if such service is provided to the Central Government, State Government, Union Territory, a local authority a Governmental Authority or a Government Entity.
Therefore it is clarified that works contract service provided by way of construction such as of rope way shall fall under entry at sl. No. 3(xii) of notification 11/2017-(CTR) and attract GST at the rate of 18%.
