Services provided to Central govt. related to Trunkey project of civil structure treated as “work contract” & attracting GST @ 12%

Categories: Advance Ruling
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Vikram Sarabhai space centre (“the Applicant”), department of space, Government of India, entered into a contract with Tata Project Ltd. for design, fabrication, procurement, instrumentation and control and commissioning of Trisonic Wind Tunnel with Ejector System. The work involved fabrication of machineries, transportation of equipments to be attached to system, construction of civil structure where machinery was to be installed.

Electrical works, integration of all bought out and fabricated items inside civil buildings as an immovable system. The final product was an immovable system for test set up which would be used purely for research and development purpose to design launch vehicle and reentry space craft.

Issues Involved:

  1. Whether activity undertaken by the Applicant qualifies for concessional rate of GST @ 5% under SI. No. 243A of First Schedule of Notification No.01/2017-Integrated Tax (Rate) dated June 28, 2017 as inserted by Notification No. 07/2018-Integrated Tax (Rate) dated January 25, 2018? What would be the rate of tax on such supply?


The Hon’ble AAR, Kerala vide Advance Ruling No. KER/43/2019 dated April 12, 2019 held that the activities undertaken by the Applicant does not qualify for concessional rate of GST. Therefore, the work of design, realisation, integration and commissioning of Trisonic Wind Tunnel as a turnkey project will fall under definition of works contract under section 2 (119). The service provided to the Central Government by way of construction, erection, commissioning, installation, completion, fitting out, of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession will attract GST@ 12% as per SI. No.3(vi) of Notification No.08/2017-Integrated Tax (Rate) dated June 28, 2017.

Citation: [2019] 105 239 (AAR – KERALA)