Case Law Round-Up: Construction Services HSN Code: 9954
The construction industry is ever evolving and changing. Under the GST Law there have been some recent developments in the past year with various AAR judgments that have given new directions to the industry. We bring you a round up of the most interesting cases related to construction services in the last one year.
The activity carried out by the Applicant is of shifting / erection of 11 KV86LT lines only. There is no nexus between the main contract awarded for construction of road by the NHAI and the work proposed to be undertaken by the Applicant. The activity to be undertaken by the Applicant cannot be treated as a part of main contract of NHAI thus the Applicant who is supposed to execute an independent work cannot be treated as sub- contractor of the main contractor. Hence, the conditions mentioned in entry No. (ix) of the Notification No.11/2017-CT (Rate) dated 28.6.2017 are not fulfilled by the Applicant.
The Applicant was held to be eligible for concessional rate of Goods and Service under Entry (v) (da) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No.01/2018-Central Tax (Rate) with effect from 25.01.2018 and discharge Goods and Services Tax at the rate of 12%,in respect of Affordable Housing only.
The services provided by way of pure labour contract supplied by the Applicant for the construction of flats under Pradhan Mantri Awas Yojana (PMAY) is covered under Entry 10 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
The services provided by the Applicant to the Electricity Supply Companies (wholly owned Government of Karnataka Undertakings) by way of construction erection, commissioning, installation, completion, etc, are not covered under entry 3(vi)(a) of the Notification No.12/2017-Central Tax (Rate) dated 28,06.2017 or under entry 3(vi.)(a) of the Notification No.8/2017-Integrated Tax (Rate) dated 28.06.2017 and consequentially are not eligible to be taxed at a lower rate of 12% GST and hence are liable to be taxed at 18%.
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