18% GST on Construction of New Transmission Bay/Express Feeder of Maharashtra Electricity Co.: AAR

The Maharashtra Authority for Advance Rulings (AAR) has held that the construction of a new transmission bay or express feeder for the Maharashtra State Electricity Company will be subject to a Goods and Services Tax (GST) of 18%. The applicant had sought a ruling on whether a concessional rate would apply. The AAR clarified that the work falls under the definition of a "works contract." It further observed that since the service is being provided to a government entity, the key factor for determining the rate is the end-use. As these specific transmission bays and feeders are part of the larger electricity distribution system and not for a specific non-commercial purpose for the general public, the standard GST rate for works contracts, which is 18%, would be applicable. This ruling provides certainty on the tax liability for contractors engaged in such electrical infrastructure projects.