Order Date: 15 July 2022

Key Pointers-

• The Applicant, M/s Power Solutions is executing works for Hyderabad Metropolitan Water Supply and Sewerage Board is desirous of obtaining clarification regarding the rate of tax on such works. 
• The issue involved in this case is what will be the GST rate of tax on TS Government, HMWSSB work contracts including material & services and services only?
• The Authorities held that the entry S.No 3(vi) of Notification No. 11/2017 covers the services i.e., works contract provided to Governmental Authority up to 31.12.2021. The rate of tax applicable to this service is 6% CGST & SGST each - From 01.01.2022, ‘Governmental Authority’ is excluded from S.No 3(vi) of Notification No. 11/2017 vide Notification No. 15/2021 date. 18.11.2021. 
• Therefore, the work contract provided to ‘Governmental Authority’ or a ‘Government Entity’ from 01.01.2022 is 9% CGST & SGST each as covered under Entry S.No. 3(xii).
• Pure services provided governmental authority are exempt from tax under S.No.3 of Notification No.12 of 2017. The entry reads as “Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution”.
• Therefore, pure services provided by the applicant to HMWSSB are exempt.