Tamil Nadu AAR: Precast Construction Sites Are Fixed Establishments Requiring GST Registration

M/s Teemage Builders Pvt. Ltd., engaged in constructing commercial buildings using precast concrete technology, manufactures precast elements at its Tiruppur factory and transports them to construction sites within and outside Tamil Nadu for assembly.

The applicant executes composite works contracts covering manufacture, transport, and erection. At out-of-State sites, it deployed engineers/supervisors for extended periods from temporary site offices. The applicant asked for clarity on registration requirements and the taxability of material movement under GST.

Main Issue: Whether temporary construction sites for assembling precast structures constitute a “fixed establishment” requiring GST registration in other States, and whether inter-State movement of materials to such sites amounts to supply without consideration.

AAR’s Decision: The Authority for Advance Ruling held that construction sites outside Tamil Nadu had sufficient permanence and were supported by necessary human and technical resources for execution of works contracts, thereby constituting “fixed establishments” under Section 2(50) of the CGST Act. The applicant was therefore required to obtain GST registration in the States where such sites were located.

The Authority further held that construction sites within Tamil Nadu must be declared as additional places of business. Movement of materials to out-of-State sites was held to be “supply” under Section 7 read with Schedule I, as establishments in different States are deemed distinct persons under Section 25, even in the absence of consideration. All other questions were rejected as procedural and outside the scope of Section 97(2) of the CGST Act.

To Read Full Judgment, Download PDF Given Below