GST On Artificial Turf Supply And Installation | AAR

Case Details: New Horizon Development Company (P.) Ltd., In re - [2025] 177 taxmann.com 403 (AAR - KARNATAKA)

Judiciary and Counsel Details

• Prathap Kumar S. & Kalyanam Rajesh Rama Rao, Member
• Veeresh S. Kandgol, CA for the Applicant.

Facts of the Case

The applicant was engaged in trading of sports infrastructure and flooring materials, including artificial turf/artificial grass. The question before the Authority was regarding the classification and applicable GST rate on supply of artificial turf/artificial grass, both in the form of pure supply of goods and when supplied along with installation services.

AAR Held

The Authority observed that artificial turf/artificial grass is a surface of synthetic fibres designed to resemble natural grass and is commonly used in sports complexes, arenas, lawns, and commercial applications. Being more durable and maintenance-friendly than natural grass, it qualifies as tufted turf of man-made textile material. Accordingly, the pure supply of artificial turf/artificial grass was held to be classifiable under Heading 5703 of the Customs Tariff and exigible to GST at 12% in terms of Entry No. 144 of Schedule II of Notification No. 1/2017-Central Tax (Rate).

Further, in cases where the applicant undertakes both supply and installation of artificial turf/artificial grass, the Authority noted that the turf is affixed to the earth (such as a football ground) using adhesive, making it part of immovable property. Such a contract involves transfer of property in goods in execution of the work and qualifies as a “works contract” as per Schedule II to Section 7 of the CGST Act, 2017. Hence, the composite supply of goods and installation service was held to be classifiable under SAC 9954 as a construction service of immovable property and liable to GST at 18% in terms of Entry No. 3(xii) of Notification No. 11/2017-Central Tax (Rate). Thus, the AAR held that pure supply of artificial turf/artificial grass is taxable at 12% GST, whereas supply along with installation, being a works contract, attracts GST at 18%.

List of Cases Referred

• NR Energy Solutions India (P.) Ltd., In re [2019] 106 taxmann.com 245/26 GSTL 280 (AAR – MAHARASHTRA) (para 6.7),
•  Premier Solar Systems (P.) Ltd., In re [2019] 104 taxmann.com 223/73 GST 299/23 GSTL 234 (AAR – UTTARAKHAND) (para 6.7),
• Giriraj Renewables (P.) Ltd., In re [2018] 97 taxmann.com 510/70 GST 246/17 GSTL 156 (AAAR-KARNATAKA) (para 6.7),
• Fermi Solar Farms (P.) Ltd., In re [2018] 93 taxmann.com 96/67 GST 599/14 GSTL 35 (AAR – MAHARASHTRA) (para 6.7),
•  M.O.H. Uduman v. M.O.H. Aslum AIR 1991 SC 1020 (para 6.7),
• Novartis Vaccines and Diagnostics Inc. v. Aventis Pharma Ltd. 2010 (2) Bom CR 317 (para 6.7),
• T.T.G. Industries Ltd. v. CCE, Raipur 2004 taxmann.com 1535/[2004] 167 ELT 501 (SC) (para 6.8),
• CE v. Solid and Correct Engineering works and others 2010 (252) ELT 481 (SC) (para 6.8) &
• Quality Steel Tubes (P.) Ltd. v. CCE, U.P. 1995 taxmann.com 1317/[1995] 75 ELT 17 (SC) (para 6.8).