Delhi High Court To Examine Whether Delhi Jal Board Qualifies As 'Local Authority' & Works Contract Services Would Attract 12% GST

In yet another writ petition, concerning works contract services provided to Delhi Jal Board, where its status as a 'Local Authority' was called-into-question, the Delhi High Court has stayed the summary Show Cause Notice under Section 73 of the CGST Act, 2017. A Division Bench comprising, Justice Prathiba M. Singh and Justice Shail Jain noted that few similar disputes relating to whether when rendering works contract services to Delhi Jal Board, the Construction Company treated it as a 'Local Authority' and paid GST at concessional rate of 12%. The Delhi High Court considering that an interim relief had already been granted in case of Tirupati Cement Products, decided to stay the Alert Circular issued by Directorate General of GST Intelligence, Delhi (DGGI). The interim order in Tirupati Cement Products reads as follows: ““14. The question raised as to whether DJB is a local authority is a legal issue which would have to be determined, so as to avoid protracted proceedings. Accordingly, the same deserves consideration in a writ petition. Accordingly, in the meantime, proceedings in the impugned SCN are hereby stayed.” Petitioner, a service provider entered into works contract with Delhi Jal Board and paid GST at 12% as applicable on government contracts. However, the DGGI initiated an investigation on the premise that Petitioner could not be considered as a 'Local Authority' and therefore, it was liable to pay GST at 18% as a 'Private Contractor' Petitioner highlighted that it was not issued a Show Cause Notice and recovery had been initiated through a Summary Show Cause Notice via Form DRC-01. On this, Respondent sought time to seek instructions and file a counter affidavit. The Delhi High Court would be hearing the matter on February 03, 2026. Case Name: Aggarwal Construction Co. Through Its Proprietor Mr.Sanjeev Aggarwal vs. Commissioner CGST For Petitioner: Advocates Rakesh Kumar, Parveen Kumar Gambhir For Respondent: SSC Gibran Naushad with Advocates Harsh Singhal, Suraj Shekhar Singh Clickhere to read the order.

Delhi High Court To Examine Whether Delhi Jal Board Qualifies As 'Local Authority' & Works Contract Services Would Attract 12% GST

Parul Bose

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