5% GST on construction of channels involving earthwork of drainage channels for Irrigation & Flood Control Dept. of J&K

  • GST
  • Case Law
  • High Court
  • financeseva

Fact of the Case 

  • The applicant received a contract for construction of channels from Irrigation and Flood control Department, Govt. Of Jammu and Kashmir.  
  • The contract would include the construction of canals involving earthwork in excavation and re-excavation of drainage channels.  
  • It filed an application for advance ruling to determine supply of work contract service would attract 5% GST or not. It was submitted that the recipient was the State Government but now it would be the Union territory of Jammu and Kashmir. 

Judgement 

  • The Authority for Advance Ruling noted that the applicant would be engaged in the construction of works contract work involving earthwork in excavation and re-excavation of drainage channels.  
  • The Executive Engineer certified that the total value of the works contract would consist primarily of dredging and earth work excavation and involvement of material would be less than 15% of the total value of the work.  
  • Since, this contract would consist of more than 75% of the value of the contract, it would be taxable at 5% and fall under Entry No. 3(vii) of Notification No. 8/2017-Integrated Tax (Rate), 28-6-2017.