18% GST on Construction of EHV Substations/Lines for Dedicated User of MSETCL through Contractor:...

The Maharashtra Authority for Advance Rulings (AAR) has ruled that the construction of Extra High Voltage (EHV) substations and lines for a dedicated user of the Maharashtra State Electricity Transmission Co. Ltd. (MSETCL) will attract a Goods and Services Tax (GST) of 18%. The AAR clarified that such construction services fall under the category of "works contract services." Since these services are being provided to a government entity (MSETCL) but for the benefit of a specific dedicated user and not for the general public, the concessional GST rate of 12% is not applicable. The AAR concluded that the standard rate of 18% would be levied on the entire value of the works contract. This ruling provides important clarity on the applicable GST rate for specialized electrical infrastructure projects undertaken for government utilities.