AAR : Composite ‘works contract’ for Govt. Department taxable at NIL till goods value does not exceed 25%

Rajasthan AAR holds that activity of O&M of Fluoride Control Project on ESCO model and O&M work is a ‘works contract’ undertaken for a Government Department, exempt from tax if value of goods supplied under the contract is up to 25% of the total value of composite supply; Further, if during the duration of contract, the applicant crosses the benchmark of 25% of the total value of goods, then rate of tax shall be 12%; Notes that activities under ESCO mode...