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2019 (1) TMI 1670 - AAR - GSTWorks contract - Exemption from GST - Services supplied by Electricity Distribution Utilities - benefit of exemption to the Applicant being the contractor executing works to APSPDCL - exemption both for supply of material as well as service or limited only to service? - ITC on inward supplies of material and services for use in the execution of works to APSPDCL - process to get refund of ITC. HELD THAT:- The works executed by the applicant in this case included design, manufacture, test, deliver, install, complete and commission facilities for conversion of existing LT Net Work into High Voltage Distribution System in various districts of Andhra Pradesh the World Bank Funding on turnkey basis - As seen from the nature of the work stated by the applicant, the works are industrial in nature as it involves conversion of existing LT network into High Voltage Distribution System. In the instant case, the contract entered by the applicant 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 APGST Act, 2017, and the applicable rate of tax is 18% (9% under Central tax and 9% State tax). However, funding by the World Bank to either Government of Andhra Pradesh or to the Contractee i.e. APSPDCL has no bearing on the rate of tax. Whether exemption under SI.No. 10A of Notification no. 12/2017-Central Tax (Rate), dated 28.06.2017, amended by notification no. 14/2018-Central Tax (Rate), dated 26.07.2018 is applicable to their works? - HELD THAT:- The said entry clearly states that the services supplied by Electricity Distribution Utilities attract nil rate of tax. Whereas, the said entry do not prescribe any nil rate for the services supplied to the Electricity Distribution Utilities. Therefore, the said exemption is not applicable to the services rendered by the applicant to the Contractee. Since the works undertaken are classifiable under works contract service, segregation or vivisection will not arise. However, as the said exemption is not applicable to the said works contract, this query and also the queries on entitlement of ITC on the inward supplies, and refund of ITC in the event of the applicant is entitled for exemption from payment of GST, have lost their relevance.
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