AAAR affirms GST Rate of 18% on construction of Water Supply/ Sewage Facilities

The Appellate Authority of Advance Ruling(AAAR Uttar Pradesh) in the matter of M/s The Indian Hume Pipes Company Ltd. has upheld the ruling by saying that GST Rate of 18% applicable on construction of Water Supply/ Sewage Facilities.

The Applicant undertakes contracts for construction of head works sumps, pump rooms, laying jointing of pipe line and commissioning and maintenance of the entire work for water supply projects/ sewerage projects/ facilities.

Based on the facts the appellant had presented following question to seek advance ruling:

(a) Whether the supply of services by the Appellant to M/s Uttar Pradesh Jal Nigam is covered by Notification No. 15/2021-Central Tax (Rate) dated 18th November, 2021 read with Notification No. 22/2021-Central Tax (Rate), dated 31.12.2021.

(b) If the supplies as per Question 1 are covered by Notification No. 15/2021-Central Tax (Rate) dated 18th November, 2021 read with Notification No. 22/2021-Central Tax (Rate), dated 31.12.2021, then what is the applicable rate of Tax under the Goods and Service Tax Act, 2017 on such supplies made with effect from 01.01.2022; and

(c) In case the supplies as per question 1 are not covered by the Notification above, then what is the applicable rate of tax on such supplies under the Goods and Service Tax Act, 2017 with effect from 01.01.2022.

The Authority for Advance Ruling in its impugned ruling held as under-

(a) The supply of services by the Applicant to M/s Uttar Pradesh Jal Nigam is not covered by Notification No. 15/2021-Central Tax (Rate), dated 1gth November, 2021 read with Notification No. 22/2021-Central Tax (Rate) dated 31st December, 2021.

(b) Not answered as per reply of question above.

(c) The applicable rate of tax shall be 18- CGST 9% and SGST 9%.

The appellant being aggrieved by the aforesaid ruling has preferred an appeal before the Appellate Authority for Advance Ruling as the Authority for advance ruling has failed to appreciate the fact that tax liability on Works Contract Services has to be determined as per Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017 ( as amended from time to time).

And the Appellant Authority of Advance Ruling uphold the impugned ruling UP ADRG -12/2022 dated 23.11.22 passed by the Authority for Advance Ruling against the Appellant.

For Official Ruling Download PDF Given Below: