Kerala Water Authority Is Not a ‘Local Authority’ Under Section 2(69) — Works Contract Services at 18% Not 12%, But Interest Payable Only on Tax Paid Through Cash Ledger: GSTAT Thiruvananthapuram Bench

The GSTAT Thiruvananthapuram Bench has held that the Kerala Water Authority (KWA), though deemed a ‘Local Authority’ under the Kerala Water Supply and Sewerage Act, 1986, does not fall within any of the sub-clauses (a) to (g) of Section 2(69) of the CGST Act and therefore does not qualify as a ‘local authority’ for GST purposes. Consequently, works contract services supplied to KWA after 01.01.2022 are not eligible for the concessional rate of 12% under Serial No. 3(iii) of Notification No. 11/2017-CT(Rate) and attract the standard rate of 18%. The ruling by Vice-President Subramanya Rayaprol and Member (Technical) Ramamoorthi Sriram in APL/12/TVP/2026 (M/s Shree Contractor, decided 17.09.2026) however provided partial relief by holding that interest under Section 50(1) is payable only on the portion of differential tax paid through the Electronic Cash Ledger, not on the portion paid through ITC.

The Tribunal noted that statutory bodies, corporations or authorities created by Parliament or State Legislatures are neither ‘Government’ nor ‘local authority’ for GST purposes, following CBIC Circular No. 245/02/2025-GST. The appellant had already received the differential tax from KWA pursuant to a Kerala HC direction in WP(C) No. 37299/2024 and had paid the entire demand including penalty. The Tribunal upheld the demand and penalty but modified the interest computation.

- 2026-juristway.com-2549-GSTAT(Thiruvananthapuram)-GST  |  GSTAT Thiruvananthapuram Bench  |  APL/12/TVP/2026  |  17.09.2026