2026-VIL-148-AAR
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SGST Advance Ruling Authority

GST – West Bengal AAR - Classification of works contract services, Determination of applicable SAC and GST rate, Interpretation of exemption notifications for services to governmental authorities, Distinction between supply of services and activities ancillary to specified services - Applicant executed composite works contract services for setting up new main water pipeline for upcoming campus and revamping water pipeline distribution network at educational institute. Material component constituted approximately 75% of total contract value and service component constituted approximately 25% - Whether the works undertaken by Applicant for setting up water pipeline and revamping water pipeline distribution network should be classified under composite works contract services - HELD - The works done by applicant constitute works contract as defined in Section 2(119) of CGST Act, 2017 as they involve construction, fabrication, completion, erection and maintenance of immovable property wherein transfer of property in goods is involved in execution of contract. For the supply of works contract services involving construction of water mains and lines, the appropriate SAC is 995422. For revamping of water pipeline which is essentially repair and maintenance service, the appropriate SAC is 995429 - The recipient, being an institute set up by an Act of Parliament, is a Governmental Authority within the meaning of Notification No. 12/2017. However, exemption from GST under specified exemption entries cannot be claimed because neither the supply of pure services excluding works contract services is involved nor can the supply be classified as direct supply by way of water supply within the narrow construction of phrase by way of specified in the notification - The revamping of water pipeline distribution network and setting up of new water pipeline are ancillary to water supply infrastructure but do not constitute direct supply by way of water supply. The supply being taxable service under serial number 3(ii) of Notification 11/2017-CT(Rate), it attracts 18% GST – Ordered accordingly
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