Classification of service— In the instant case, the applicant is into business of works contracts and have executed works for Telangana State Industrial Infrastructure Corporation Limited (TSIIC). The applicant in this contract has constructed IT Incubation Centre at Pothugal, Karimnagar for the TSIIC.

As per the Memorandum of Association filed by the applicant TSIIC is owned by the Government of Telangana with paid up equity share capital of the Government of Telangana in excess of 90%. Therefore it is opined by the applicant that they have executed works to a Government entity and hence qualify for a lower rate of tax at the rate of 12%. 

Questions raised for advance ruling are as follows:

1. In view of the services provided by the applicant to TSIIC., is the applicant eligible to avail the concessional rate of GST at 12% as prescribed in of S. No. 3 (vi) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended by?

2. If not, what is the appropriate rate and classification of GST to be charged by the applicant?

The applicant has executed works contracts for TSIIC which is a Government entity. This work is construction of IT Incubation Centre. Therefore the civil structure is meant for commerce/industry or any other business.

Therefore the works contract executed by the applicant for construction of IT Incubation Centre for TSIIC falls under exception to Sr No. 3(vi) of Notification No. 11/2017-CT (Rate) wherein the civil structure is meant for commerce/industry or any other business and therefore the supply of this service is taxable at the rate of 9% under CGST & SGST each.

Held that—The applicant is not eligible to avail the concessional rate of GST at 12% as prescribed in of S. No. 3 (vi) of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017. The appropriate rate is 18%.