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18% GST applicable on works contract to Airport Authority of India

AAR gave an important ruling dated 16th September,2019 regarding applicable rate of GST on construction of new civil structures for airport authority India in case of Vishal Infrastructure ltd. [2019] 110 202 (AAR-KARNATAKA) which is discussed as below:

Facts of the Case
  • The applicant is engaged in works contract relating to execution of large-scale infrastructure projects, like Airports, Defence Industrial/Technical Buildings, Hospitals, Housing, Steel Structural, Highways, and Bridges.
  • The applicant has been awarded works contract by the Airport Authority of India. The project includes development and up-gradation of Airports by construction or extension of Runway, construction of new Taxi track, Apron, Isolation bay, Perimeter road and other allied works. 
Issue Involved
  • What are the applicable rate of GST on Development of Airport by construction of Runway, Taxi track, Apron, Isolation bay, Perimeter Road including Earth work and other allied works and Up-gradation of Airport to make it suitable for operation of any type of aircraft by extension of Runway, Construction of New Apron, Taxi track, Isolation bay including Link taxi, GSE area, Perimeter road, and allied works (Civil & Electrical) ?
  • The rate of tax applicable to the composite supply of works contract undertaken by the applicant is to be charged at 18% as such works contract services are rendered to airport authority of India for its business and commerce.
Please click here for Ruling.


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