The Authority for Advance Rulings (AAR), Uttarakhand has held that the services by NHPC to Ministry of External Affairs (MEA) is eligible for GST Exemption.
The Applicant, NHPC Ltd. has been entrusted with the work of construction of road by Ministry of External Affairs, Government of India and the funds are provided by MEA to NHPC Ltd. in the form of grants. They approached the Advance Rulings Authority for a clarification that whether the amount deposited with Central Fund i.e Uttaranchal CAMPA and reimbursed by MEA considering as part cost of the road is liable for GST.
The authority noted that M/s NHPC falls under the definition of “Government entity” for the purpose of availing exemption benefit under the Not 12l2Ol7-Cr:ntral Tax (Rate) dated 28th June, 2017.
It was observed that the NHPC is providing services to Central Government i.e. Ministry of External Affairs and will attract GST @ 12%; but by virtue of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 (as amended time to time), the supply of service in question is exempted, and thus, sub-contracting of the said work contract to PWD, Government of Uttarakhand is also exempted.
“In view of above, the said activity comes under the purview of exempted category and therefore, question of payment of GST under reverse charge in terms of Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017 does not arise,” the authority said.
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