Service of beautification of streets under Smart Cities Mission is a composite supply of works contract & taxable at 12%: AAR

  • Blog|News|GST & Customs|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 28 September, 2021

Composite supply under GST

Case Details: Authority for Advance Rulings, Andhra Pradesh Shapoorji Pallonji & Company (P.) Ltd., In re - [2021] 130 344 (AAR - ANDHRA PRADESH)

Judicial and Counsel Details

    • D. Ramesh and A. Syam Sundar, Member
    • Kanupriya Bhargava and Divya Bhardwaj for the Applicant.

Facts of the Case

The applicant-company was engaged in the construction business and provided services to Government, public sector undertakings, Government entities and private sector entities. It entered into an agreement with a company which was a Special Purpose Vehicle (SPV) created by the Government of Andhra Pradesh. As per agreement, it would provide services of beautification of streets including Streets cape Design, Landscaping and intersection Redesign in Visakhapatnam’s Area Based development under smart Cities Mission. It filed an application for advance ruling to determine taxability of services provided under this agreement.

AAR Held

The Authority for Advance Ruling observed that the applicant entered into an agreement with a company in which he Andhra Pradesh State Government and the Greater Visakhapatnam Municipal Corporation are the promoters having 50:50 equity shareholdings, which substantiates more than 90 per cent of participation of the Government. Therefore, it would be treated as Government Entity.

Moreover, the services provided by the applicant of construction, development and maintenance of the project including plantation, landscaping, Street lighting etc., would be composite supply of works contract. Since, these services would be provided to a Government Entity, it would be classifiable under the Heading No. 9954 and would be liable to tax at the rate of 12%.

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied