2018 (11) TMI 1505 – AUTHORITY FOR ADVANCE RULING – CHHATTISGARH – 2018 (18) G. S. T. L 760 (A. A. R. GST) – Rate of GST – work contract services involving the supply of goods and services to CSPDCL – CSPDCL is a Government authority /Government entity or not – work predominantly for use other than for commerce, industry or any other business of profession or not – whether taxable at 18% or 12%? – Held that:- Close scrutiny of the balance sheet of CSPDCL reveals that 100% equity of CSPDCL as held by CSPDHL (Chhattisgarh State Power Distribution Holding Company Limited) and 100% of equity of CSPDHL is being held by Government of Chhattisgarh as is evident from the balance sheet of CSPDHL as on 31st March, 2016 – there is no ambiguity as regards CSPDCL, being a Government entity in view of the definition of 'Government Authority' as stipulated under N/N. 31 /2017-Central Tax (Rate), dated 13-10-2017.
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Nature of activities being under taken by the applicant – whether the same can be
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der the Companies Act 1956, earlier known as Mahanadi Power Development Company Limited (Company Registration No. 1015822, dated 19-5-2003) and is a company limited by share. Further it is also in public domain that the main Objects of CSPDCL – on going through the main/ancillary objectives as enumerated in Memorandum of Association of CSPDCL, there hardly remains any doubt regarding the principal/primary and foremost aim of CSPDCL being predominantly commercial in nature
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The nature of activities of CSPDCL being principally and predominantly, being commercial in nature, as per their (CSPDCLs) Memorandum of Association itself, we come to the considered conclusion that the works contract services provided by the applicant M/s. A2Z Infra Engineering Ltd., Raipur to CSPDCL is liable for CGST and SGST @ 9% each.
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Ruling:- In the light of Notification No. 11/2017-State Tax (Rate), dated 28-6-2017 read with amendment Notification No. 24/2017-State Tax (Rate), dated 23-9-2017 and as
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2Z' or the company') is a fully integrated Electrical Business Group in India engaged in providing maintenance and engineering services. II. Government of India has launched Integrated Power Development Scheme (IPDS) for the urban/ semi-urban areas for a. Strengthening of sub-transmission and distribution networks in the urban areas; b. Metering of distribution transformers/feeders/consumers in the urban areas; c. Rooftop Solar Projects, Installation of solar panels and smart / net meters as a mandatory component under IPDS; d. Counting IT enablement of distribution sector and strengthening of distribution network. III. Chhattisgarh State Power Distribution Company Limited (hereinafter referred to as 'CSPDCL') have been entrusted to execute the Project i.e. Implementation of IPDS scheme for a. Strengthening and augmentation for sub-transmission & distribution infrastructure and b. Electrification Work in 15 Circles (through eight packages) in Chhattisgarh State on b
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ll be subjected to CGST @ 6% and SGST @ 6% and provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be. (ii) that, on the basis of Notification No. 11 / 2017, Notification No. 24/2017, dated 21-9-2017 and Notification No. 31 /2017, dated 13-10-2017 the services provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity by way of construction, erection, commissioning installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce industry, or any other business or profession will be subjected to CGST @ 6% and SGST@ 6% provided that where the services are Supplied to a Government Entit
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emented in all the States of India. So to implement this policy in Chhattisgarh, the Government of Chhattisgarh has provided the work to CSPDCL. (v) that, the work contract services provided by the Applicant to CSPDCL is meant predominantly for use other than for commerce industry, or any other business or profession. The IPDS scheme has been formulated to keep pace with the increase demand of electricity as electricity is the most important factor in the economic growth of any country and the most critical segment of power sector chain including Generation, Transmission and Distribution, is the Distribution Sector. The funds for IPDS scheme are provided by Central Government to Chhattisgarh Government in the form Of subsidy and by Chhattisgarh Government by arranging loan from FIs/ Bank. Further, that even after completion of this project no recovery will be made from any consumer as this IPDS scheme is not for earning any profit or gain but for the benefit of India as a whole so that
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ntract involving supply of goods and services provided by A2Z. This clarification has been sought by the Applicant in the context of Notification No. 24/2017-State Tax (Rate), dated 23-9-2017 and Notification No. 31/2017-State Tax (Rate), dated 13-10-2017, which provides that the services provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity by way of construction, erection, commissioning installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession will be subjected to CGST @ 6% and SGST @ 6%, provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as th
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ty /Government entity ? and, if so (b) whether, the works contract services provided by M/s. A2Z Infra Engineering Ltd. Raipur to CSPDCL qualifies being the work predominantly for use other than for commerce, industry or any other business of profession. 6.3 Close scrutiny of the balance sheet of CSPDCL reveals that 100% equity of CSPDCL as held by CSPDHL (Chhattisgarh State Power Distribution Holding Company Limited) and 100% of equity of CSPDHL is being held by Government of Chhattisgarh as is evident from the balance sheet of CSPDHL as on 31st March, 2016. This being the case, there is no ambiguity as regards CSPDCL, being a Government entity in view of the definition of 'Government Authority' as stipulated under Notification No. 31 /2017-Central Tax (Rate), dated 13-10-2017. 6.4 Now, moving on to the second aspect regarding the nature of activities being under taken by the applicant i.e. whether the same can be treated as the work predominantly for use other than for commer
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Tax (Rate) No. F-10-74/2017/CT/V(126). – In exercise of the powers conferred by sub-section (1) of Section 9, sub-section (1) of Section II, sub-section (5) of Section 15 and subsection (1) of Section 16 of the Chhattisgarh Goods and Services Tax Act, 2017 (7 of 2017), the State Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the State Government, in the Commercial Tax Department, No. 11/2017-State Tax (Rate) Notification No. F-IO43/2017/CT/V(79), dated the 28th June, 2017 published in the Gazette (Extraordinary) of Chhattisgarh, No. 252, dated the 29th June, 2017, namely :- In the said notification, in the Table, against serial number 3, for item (vi) in column (3) and the entries relating thereto, in columns (3), (4) and (5), the following shall be substituted namely :- (3) 4 5 "(vi) Services provided to the Central Government; State Govern
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24/2017-Central Tax (Rate), dated 23rd September, 2017, which was further amended vide Notification No. 31/2017-Central Tax (Rate), dated 13th October, 2017. (iv) Thus for availing the benefit of exemption Notification No. 24/2017State Tax (Rate), dated 23-9-2017, the pre-condition is that the services being provided by the Applicant to CSPDCL by way of construction erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of a civil structure or any other original works must predominantly be for use other than for commerce, industry, or any other business or profession. This effectively means that for availing the aforesaid benefit of reduced tax rate, it is of paramount importance that the services under taken/work done by the Applicant for CSPDCL must necessarily for use which is non-commercial in nature. (v) Now to ascertain the constitution of CSPDCL i.e. whether it has been incorporated for commercial aim or otherwise, it is see
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on, generation, use, storage and measurement, distribution and supply of electric power. 3. Investigate and prepare project reports To study, investigate, collect information and data, review operations, plan, research, design, prepare feasibility reports, prepare project reports, diagnose operational difficulties and weaknesses, and advise on the remedial measures to improve and modernize existing stations and facilitate and to undertake for and on behalf of others the setting up of Electric power plants and generally work for the efficient and economics management of the resources available. 6. Purchase and sale of Electrical energy and co-ordinate with other companies – To carry on the business of purchasing, selling, importing, exporting, wheeling and trading of power including finalization of tariff, billing and collection thereof. – To execute Power Purchase Agreements with Transmission Companies, Generating Companies, Central and State generating stations. Regional Electricity B
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rwise to transfer and convey the same absolutely or in trust and to give the lenders powers as may seem expedient, and to purchase redeem or pay off such securities and borrowings. 23. To carry on convenient business Generally to do all such other things as may be deemed incidental or conductive to the attainment Of the above objects or any of them and to carry on any business which may be conveniently carried on in connection with any of the Company's objects or are directly or indirectly calculated to enhance the value of or render profitable any of the Company's property or rights. C. Others Objects 8. To carry on the business of electrical and electronic equipment's etc. To carry on the business of manufacturing, assembling, repairing, servicing, selling, purchasing importing, exporting, of electrical and electronics equipments like, transformers, motors, switch gears, pumps, threshers, starters, electric fans coolers, air conditioners, televisions, telephones, epabx, a
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imited to providing of capital funds obtained from Central Government for installation and erection of infrastructure under IPDS scheme, whereas the role of M/s. A2Z Infra Engineering Ltd., Raipur is completion of the work of installation and erection of infrastructure including supply of materials like substation, conductor, meters, other structure ete. to be used predominantly for commercial purpose, at concessional and reasonable rates as per the awarded contract. Thus the nature of activities of CSPDCL being principally and predominantly, being commercial in nature, as per their (CSPDCLs) Memorandum of Association itself, we come to the considered conclusion that the works contract services provided by the applicant M/s. A2Z Infra Engineering Ltd., Raipur to CSPDCL is liable for CGST and SGST @ 9% each. 7. In view of the deliberations and discussions as above, we pass the following order : ORDER 8. In view of the discussions held above, the ruling sought by the Applicant is answere
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