West Bengal AAR in the case of Reach Dredging Ltd.

Case Covered:

Reach Dredging Ltd.

Facts of the Case:

The Irrigation and Flood control Department, Govt of Jammu and Kashmir (hereinafter the recipient) has awarded the applicant a contract for construction of channels across Hokersar Wetland along the old alignment from RD 13182m to RD 16713m of flood spill channel, including its side slope protection and dredging of drainage flowing into Hokersar Wetland. The applicant seeks a ruling on whether Sl No. 3 (vii) of Notification No 08/2017 – Integrated Tax (Rate) dated 28/06/2017 (hereinafter the IGST Notification), as amended from time to time, applies to the above supply. 

The question is admissible under section 97(2)(b) of the GST Act read with clause (xviii) of section 20 of the IGST Act, 2017. The applicant declares that the question raised is not pending or decided in any forum. The concerned officer from the Revenue has not objected to the admission of the application.

Related Topic:
Printing Contracts are ‘Services’ and not ‘Goods’- West Bengal AAR

The application is, therefore, admitted.

Observations:

Entry No. 3 (vii) of the IGST Notification provides that a supply is taxable @ 5% if the contract is a composite supply of works contract as defined under section 2(119) of the GST Act, involving earthwork exceeding 75% of the contract value and the recipient is the Central Government, State Government, Union Territory, government authority or a government entity. 

The applicant submits an allotment order vide no DB/179 of 2018-19 dated 01/02/2019, which mentions that the recipient awards the applicant a contract of Rs. 2055.56 lakhs for the construction of channels across Hokersar Wetland along the old alignment from RD 13182m to RD 16713m of flood spill channel, including its side slope protection and dredging of drainage flowing into Hokersar Wetland by way of earthwork excavation in all kinds of soils like earth, clay, silt, sand, gravel, boulders and lake bed materials, etc. by mechanical means. Annexure A of the Order specifies the scope of the work with an emphasis on earthwork in the excavation.

Ruling:

The applicant’s supply, as mentioned in para 1.1, to the Irrigation and Flood control Department, Govt of Jammu and Kashmir, is taxable under Entry No. 3(vii) of Notification No 8/2017 – Integrated Tax (Rate) dated 28/06/2017, as amended from time to time.

This Ruling is valid subject to the provisions under Section 103 until and unless declared void under Section 104(1) of the GST Act.

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