Latest GST Judgments

For Full Access To All Latest Judgments on GST
Click Here To Subscribe Now
Take a tour of our GST Library

Construction of tunnel can also considered as earth work, and qualifies for concessional rate of GST

Classification of service— In the instant case, appellant is engaged in the business of construction of Infrastructure project. The JV was formed on 27 December, 2008 to undertake work of” construction of tunnel and its allied works. It is submitted that the Work Order consists of Earth Work such as Excavation for Tunnel, Removing of Excavated Stuff, Providing Steel Support, Rock Bolting, Reinforcement, Fixing of Chain Link, Cement Concreting etc. wherein Earth Work is more than 75% of total work, and that since the work i.e. earth work constitute more than 75% of the total work in term of value, they are covered by entry no.3 of Notification 11/2017 dated 28.06.2017 as amended by Notification no, 31/2017 - Central Tax (Rate) dated 13.10.2017 and effective from the said date where GST is payable 5% The AAR have held that the work is not “Earthwork” by referring to the various definitions of “Earthwork' and concluding that Earthwork only means making an embankment and construction of Earth and as the present work is for construction of tunnel, it is not covered by the term. Held that— On a careful reading of the entry, we find ourselves in disagreement with the finding of the AAR. The entry says that the Composite supply should have earthwork forming more than 75% of the contract by value. Thus it very much clear from the wording that the Contract may be for something else- be it construction of building, tunnel, canal, road and in these contracts if the earthwork constitutes more than 75% then it qualifies for the above entry. If the intention of the Legislature had been to cover only pure contract of earthworks in it then a qualifying condition of more than 75% by value wouldn't have been provided. We therefore find the reasoning of the AAR untenable. We therefore hold that the Services provided by the appellant in the impugned matter qualifies for inclusion under entry 3(vii) of the Notification 12/2017 dt 28.6.2017