GST is not applicable on services of design engineering and contraction of water tanks by the Government Authority

Last updated: 03 July 2024

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The Uttarakhand Authority for Advance Ruling (AAR) has ruled that Goods and Services Tax (GST) is not applicable on the design engineering and construction of water tanks by a Government Authority. The ruling clarified that the service provider, M/s Uttarakhand PeyjalSansadhan Vikas Evam Nirman Nigam, is considered a 'governmental authority' and not a 'local authority'. Consequently, services provided by them are exempt from GST under specific notifications.

Court :
Uttarakhand AAR

Brief :
The Uttarakhand AAR, in the case of M/s. THDC India Limited, In re [Advance Ruling No. 06/2023-24 dated February 26, 2024] held that there is no applicability of the RCM as per the provisions of the Notification No. 13/2017-Central Tax (Rate) dated June 28, 2017, as the supplier of services is not a "Local Authority". Also, the services provided under the referred MOU i.e. design engineering and contraction of the water tank by the Government Authority are exempt in view of the provisions of the Notification No. 12/2017-Central Tax (Rate), dated June 28, 2017, as amended, as the supplier of services falls under the category of a "Governmental Authority". In the instant case, the applicant being a receiver of services, there was no applicability of GST under Forward Charge.

Citation :
Advance Ruling No. 06/2023-24 dated February 26, 2024

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