There is a need to pay 18% GST on the construction of buildings and civil structures essential for the house data centers nearline data centers, disaster recovery station, satellite data center said to the Maharashtra Authority of Advance Ruling (AAR).
The petitioner is the owner of Sterlite Technologies Limited, manufactures telecom products such as optic fiber, optic fiber cable, etc.; lays the optic fiber cables (either underground or hung overhead) to build a network, installs the control centers, installs equipment essential to operate the network for the needed purpose, commissions network and the additional ancillary activity which is needed towards the making of network infrastructure for its customers in the telecom industry through the method of turnkey contracts.
For making the IP/MPLS based multiprotocol converged network all across the country Naval Communication Network, as the core infrastructure to support the strategic and the operational requirements, the Indian Navy has provided the installation of these networks to Bharat Sanchar Nigam Limited (BSNL), which again gives a work contract to the petitioner who furnishes all the supply to all materials and services needed training services to operate that and the supply of satellite connectivity vehicles to ensure the seamless connectivity in the network breakdown.
The network made consists of major activities like the construction of buildings and civil structures important for the house data centers, nearline data centers, disaster recovery stations, satellite data centers, and connectivity equipment at Naval ports across mainland and coastal region in India. Establishing rack, stack in the buildings, and additional civil infrastructures required to house the equipment and allow the functions of all the centers/ports. Assemble/install all equipment and power it up by connecting with power supply and backup generators. Interconnecting and configuring all the equipment in all the data centers, nearline data. centers, disaster recovery stations, satellite data centers, and others. For allowing the exchange of the data across the network.
The petitioner seeks the advance ruling on the problem of the GST rate subjected on the activities.
The two Judges Rajiv Mangoo and T.R.Ramnani rule that the activities of the petitioner come beneath entry 3(ii) of the Notification No 11/2017 CGST (Rate) on June 28, 2017, and later with effect from 01.04.2019, the stated activities come beneath Sr. No. 3 (xii) as revised by Notification No 03/2019 CGST (Rate) on 29th March 2019 which is subjected to tax at the rate of 18%.
