 "GSTGST")
The construction of a jetty for the Indian Coast Guard at Fort Kochi by the Cochin Port Trust (CoPT) is not eligible for exemption from the goods and services tax (GST), the Kerala-based authority for advance ruling (AAR) has said. It is, however, eligible for a concessional GST of 12 per cent, provided the jetty was completed within the specified time frame, AAR has ruled.
The authority held that the construction of the jetty constitutes works contract and hence, a concessional rate of 12 per cent GST, instead of 18 per cent, would be imposed on it.
Works contract is a service contract involving the supply of goods to execute it. That makes the works contract a combination of service and movement of goods.
The authority observed that nothing in the memorandum of understanding (MoU) or other documents reveals that CoPT has received any consideration for the services in the form of grants from the central government and as such it is not eligible for exemption.
Sandeep Sehgal, partner at AKM Global, a Gurugram-based chartered accountancy, said the AAR has clarified that the services provided in relation to port services would be covered under works contract and would attract a concessional rate of tax of 12 per cent GST at the time of supply of services.
This time of supply has to be within September 21, 2017 and July 17, 2022 to qualify for concessional rate since the provision for this was removed from July 18, 2022.
The AAR did not give a ruling on CoPT's query about whether contractors engaged by it to execute the works contract would be eligible for 12 per cent GST.
CoPT had also asked whether it could seek a refund if it had already paid 18 per cent GST. To this, the AAR said the question did not fall within the purview of the definition of advance ruling.
