In Re: Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited
GST
2019 (1) TMI 359 – AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – 2019 (20) G. S. T. L. 788 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, MADHYA PRADESH – AAR
Dated:- 18-10-2018
Case No. 19/2018 Order No. 16/2018
GST
RAJIV AGRAWAL AND MANOJ KUMAR CHOUBEY (MEMBER)
Present on behalf of applicant: Shree Rohit John, Accounts Officer
PROCEEDINGS
(Under section 98 of Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017)
1. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and MP Goods & Services Tax Act, 2017 (hereinafter also referred to CGST Act and MPSGT Act respectively) by M/s. Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited (hereinafter also referred to as applicant), registered under the Goods & Services Tax.
2. The provisions of the CGST Act and MPGST Act are identical, except for certain
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t.
4. QUESTION RAISED BEFORE THE AUTHORITY –
The applicant wishes to know whether clause(vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax(Rate) dated the 2e June, 2017 is applicable on the works contract services received by it. and determination of liability to pay Tax.
5. DEPARTMENT'S VIEW POINT- The concerned officer submitted that the nature of works contract undertaken by the applicant doesn't come under the category for which the notified rate of tax is 12% (6% CGST and 6% SGST) but it will attract 18% (9% CGST and 9% SGST).
6. RECORD OF PERSONAL HEARING-Shree Rohit John, Accounts Officer Appeared for personal hearing on 11.09.18 and they reiterated the submission already made in the application and attached additional submission which goes as follow –
6.1.1. The Company Madhya Pradesh Madhya Kshetra Company Ltd. is wholly owned subsidiary of M.P. Power Management Co. Ltd.
6.2 The holding Company M.P. Power Management Co. Ltd. is wholly owned by
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Central Tax (Rate), Dated – 13/10/2017.
4) Notification No. 46/2017 – Central Tax (Rate), Dated – 14/11/2017.
5) Notification No. – 01/2018 – Central Tax (Rate), Dated – 25/01/2018.
6.6 Vide notification no. 24/2017 – Central Tax (Rate), Dated – 21/09/2017, Government of India by inserting entry no. (vi) notified concessional GST rate of 6% for the construction services provided to Central Government, State Government, Union Territory, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of –
a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;
b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; or
c) a residential complex predominantly meant for self-use or the use of their employees
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, it is submitted that the provisions referred above issued under the Notification No. 24/2017-Central Tax (Rate), Dated – 21/09/2017 and Notification No. 31/2017-Central Tax (Rate), Dated -13/10/2017 is applicable on the Company.
7. DISCUSSIONS AND FINDINGS:
7.1. First of all we must look in the contention that the Applicant is a government entity or not. As per Notification No. 31/2017 – Central Tax (Rate), Dated – 13/10/2017 issued under CGST Act, 2017 and corresponding notification under MPGST Act, 2017.
Government Entity is defined 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 90 per cent. or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority.”
7.2. The Company Madhya Pradesh Madhya Kshetr
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nder the definition of Government Entity.
7.6. Now it is important to discuss the nature of work undertaken by the applicant.
The Applicant is entrusted for various ambitious projects of Central and State Government relating to strengthening of power distribution network and Rural Electrification for public welfare such as Deendayal Upadhyay Gram Jyoti Yojna for Rural Electrification (DDUGJY), Integrated Power Development Scheme (IPDS), Saubhagya Yojna, ADB funded project, Scheme for Strengthening of Transmission and Distribution systems (SSTD) projects, feeder separation project (FSP) etc., the work has been carried out with the help of Contractor and work include both supply of material and erection of the same.
7.7. The projects are undertaken for construction of electricity distribution lines, sub-stations and other infrastructure which are meant predominately for sell of electricity in urban and/or rural area.
7.8. As per the Memorandum of Association of the Company, Main obje
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on under is not available to the applicant on works pertaining to construction, erection, commissioning, installation, 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.
Further, as per Section 2 of CGST Act '2017 and MPGST Act, 2017 defines “works contract” as a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;
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 Il of CGST Ac
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