2018 (9) TMI 1645 – AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – 2018 (17) G. S. T. L. 700 (A. A. R. – GST) – Works Contract – rate of tax – Applicability of clause(vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 – liability to pay tax – whether clause(vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 is applicable on the works contract undertaken by it? – Government entity or not?
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Whether the Applicant is a government entity or not? – Held that:- The Government of Madhya Pradesh is having full control over the applicant M/S M.P. Paschim Kshetra Vidyut Vitran Co. Ltd. and the applicant is covered under the definition of Government Entity.
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Nature of work undertaken by the applicant – Held that:- As per the Memorandum of Association of the Company, Main objects to be pursued by the Company on its incorporation is to carry on the business of purchasing, selling, importi
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completion, fitting out, repair, maintenance, renovation, or alteration, which are carried out in respect of projects under DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of governments as the same is undertaken for the business purpose – The composite supply of works contract as defined at Section 2 of CGST Act '2017 and MPGST Act, 2017 is treated as supply of service in terms of serial no.6, Schedule II of CGST Act '2017 and MPGST Act, 2017.
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In the instant case, the applicant had awarded work to the successful bidder tor Supply of Materials and Erection respectively. Therefore, the contract entered by the applicant is squarely falls under the works contract and falls under entry no. (ii) of S. No. 3 of the table of notification no. 11/2017 – Central Tax (Rate), Dated – 28th June 2017 as amended from time to time and corresponding notifications under and MPGST Act, 2017, the applicable rate of tax is 18% (9% under Central tax and 9% State tax).
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Ruling:-
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applicant), registered under the Goods & Services Tax. 2. The provisions of the CGST Act and MPGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE – 3.1. M/s. Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited (hereinafter referred to as the Applicant) is engaged in power distribution and registered with GSTN with GSTIN 23AADCM7397N1ZU. 3.2. The Applicant for the above purpose also carries supply and erection work. 3.3. The Applicant cites Applicability of clause(vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax (Rate) dated the 28th June, 2017 for applicability of rate of tax o
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holding Company M.P. Power Management Co. Ltd. is wholly owned by the Government of Madhya Pradesh. 6.3 Thus, the Government of Madhya Pradesh is having full control over MPPKVVCL and covers under the definition of Government Entity. 6.4 Further, the Government of Madhya Pradesh has entrusted the Company to carry out function of distribution of Electricity in the area of Indore and Ujjain Commissionerate vide order no. 5555/RS/4/13/2001, Bhopal, Dated – 01/07/2002 6.5 The Government of India, vide notification no. 11/2017 Central Tax (Rate), Dated 28th June 2017 notify the rate of GST applicable on supply of services. Under this notification for heading 9954 the applicable rate of GST is 9%. 6.6 The said notification has been amended time to time and till date 5 notifications is issued by the Government of India to amend for this purpose. The said amendment Notification is as follows- 1) Notification No. – 20/2017 – Central Tax (Rate), Dated – 22/08/2017. 2) Notification No. – 24/2017
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predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017. 6.8 Further, vide Notification No. 31/2017 – Central Tax (Rate), Dated 13/10/2017, Government of India substitute the word Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity in place of Central Government, State Government, Union Territory, a local authority or a Governmental Authority Also, vide said notification the definition of Government entity is provided, which is reproduced as under – Government Entity means an authority or a board or any other body including a society, trust, corporation, i) set up by an Act of Parliament or State Legislature; or ii) established by any Government, with 90per cent. or more participation by way of equity or control, to carry out a function entrusted by the Central Government. State Government, Union Terr
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2. The Company Madhya Pradesh Paschim Kshetra Company Ltd. (MPPKVVCL) is wholly owned subsidiary of M.P. Power Management Co. Ltd., carried out function of distribution of Electricity in the area of Indore and Ujjain Commissionerate as entrusted by the Government of Madhya Pradesh vide order no. 5555/RS/4/13/2001, Bhopal, Dated – 01/07/2002.Further, the holding Company M.P. Power Management Co. Ltd. is wholly owned by the Government of Madhya Pradesh. 7.3. The applicant had submitted the copy of Audited Annual Accounts of M/s. M.P. Power Management Co. Ltd. for F.Y. 2015-16, during the proceedings. It is evident from the schedule of Equity Share Capital of the Annual Statement that 100% share capital of M/S M.P. Power Management Co. Ltd. is hold by Secretary (Energy), GOMP, Bhopal. 7.5. Thus. based on the above facts, it is concluded that the Government of Madhya Pradesh is having full control over the applicant M/S M.P. Paschim Kshetra Vidyut Vitran Co. Ltd. and the applicant is cover
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cts to be pursued by the Company on its incorporation is to carry on the business of purchasing, selling, importing, exporting, selling, trading of electrical energy, including formulation of tariff, billing and collection thereof; to execute Power Purchase Agreements with the Bulk supplies, generating companies, Central and State generating stations, regional Electricity Board/neighboring States/utilities and other entities; to execute agreements for sale of power to other distribution companies and other persons and to coordinate, aid and advise on the activities of other companies and concerns. including subsidiaries, associates and affiliates, engaged in generation, transmission, distribution, supply and wheeling of electrical energy. 7.9. Thus, the projects under DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of governments are carried out for business purpose and the benefit of Concessional Rate of 12% (6% under Central tax and 6% State tax) as per notificatio
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9;2017 and MPGST Act, 2017. In the instant case, the applicant had awarded work to the successful bidder tor Supply of Materials and Erection respectively. Therefore, the contract entered by the applicant is squarely falls under the works contract and falls under entry no. (ii) of S. No. 3 of the table of notification no. 11/2017 – Central Tax (Rate), Dated – 28th June 2017 as amended from time to time and corresponding notifications under and MPGST Act, 2017, the applicable rate of tax is 18% (90/0 under Central tax and 9% State tax). 8. RULING (Under section 98 of Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017) 8.1 The Applicant is not entitled for the benefit of concessional rate of GST @12% (6% under Central tax and 6% State tax) for the said projects in terms of Notification No.24/2017-CentraI Tax (Rate) dated 21.09.2017 read with Notification No.31/2017-CentraI Tax (Rate) dated 13.10.2017. 8.2 The applicable rate of tax is 18% (9%
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