The Authority of Advance ruling (AAR), Gujarat recently ruled that M/s. Railtel Corporation of India Ltd. doesn’t belong to any category of ‘Government Authority’, hence it will be liable to pay GST at a 12% rate 
Grab the information of revised GST slab rates on consumer products in India, Although GST council finalized the slab rates like 5%, 12%, 18% and 28%.
The AAR Gujarat received an application by M/s. Shree Hari Engineers & Contractors, the applicants are running the business of providing works contract services. The applicants have been received tender by M/s. Railtel Corporation of India Limited (A Government of India Undertaking, Ministry of Railways). The received tender was for the work related to the excavation of trenches, laying of OFC through ducts, testing, and commissioning of Optical Fiber Cable.
As per the details provided by the applicant the complete work is an original work with the purpose of connecting Gram Panchayat for socio-economic development. They also clarified that the work is not for any Commerce, Industry, or any other business the purpose or profession.
The Applicant also stated that M/s. Railtel Corporation of India Ltd. holds 100% shareholding by Union Government and it is a Government of India Enterprise. The Applicant seek for advance ruling on the issue of whether the contract with M/s. Railtel Corporation of India Ltd. will be considered under the Notification 24/2017-Central Tax (Rate) Sr.No.3 (iv)-Construction Service or Original Work to Government Authority, and the rate of applicable tax will be 12% or not?
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The bench consisting of Sanjay Saxena and Mohit Agarwal ruled that the contract between M/s. Shree Hari Engineers and M/s. Railtel Corporation of India Ltd. can’t be considered under the Notification 24/2017-Central Tax (Rate) Sr.No.3 (VI)-Construction Service or Original Work to Government Authority. Thus the provided services by the applicant will attract a tax at 12% rate as per entry No.3(vi) of Notification No:11/2017-Central Tax (Rate).
The Authority said that “It cannot be construed that the optical fiber cables laid underground are meant predominantly for use other than for commerce, industry, or any other business or profession as stated by the applicant. Thus, the resultant structure that has arisen under the ground in the form of optical fiber cables due to the work executed by the applicant can be used for commerce, industry, or any other business or profession. Hence the fourth condition is not satisfied. Therefore, we are of the view that the contract in question does not satisfy the conditions envisaged in 3(vi) of Notification No.24/2017-Central Tax (Rate) dated 21.09.2017,”.
