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2019 (4) TMI 1945 - APPELLATE AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESHClassification of services - rate of GST - electrification work to the APEPDCL for procurement of plan, design, supply, install and commission certain facilities viz., providing underground cable work in Visakhapatnam city, package-1 and package-3 (replacement of existing 33/11 KV substation of Zone-1 division Visakhapatnam with underground power cable network on turnkey basis - Applicability of N/N. 20/2017-Central Tax (Rate), dated 22-8-2017 and No. 24/2017-Central Tax (Rate), dated 21-9-2017 - Government or a Government authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of, with respect to certain specified works services or not - whether APEPDCL would fit into the definition of ‘business’ as per Notification No. 17/2018, dated 26-7-2018? - challenge to AAR decision - HELD THAT:- The term “business” as defined above will not be applicable to the said transaction, as the transaction is not undertaken by the State Government in which it is engaged as public authority, but it is the activity undertaken by the APEPDCL, which is a company incorporated under the Companies Act, 1956 and having its registered office at Sai Shakti, Opp. Saraswathi Park, Daba Gardens, Vishakhapatnam-530020, for carrying on the business of Distribution and Retail Supply of electrical energy within the Area of Supply (as defined in this License) and with the powers and upon the terms and conditions specified therein. Moreover ‘APEPDCL is a Government entity and it does not fall under the explanation provided for ‘business’ vide Notification No. 17/2018, dated 26-7-2018, which includes transaction undertaken by the Central Government, State Government or any local Authority only. Government Entity or not - HELD THAT:- As per Serial No. 3 of Entry No. vi(a) of Notification No. 24/2017-Central Tax (Rate), dated 21-9-2017, the services provided by the appellant towards APEPDCL does not qualify “the category of services provided to Government Authority meant predominantly for use other than for commerce”, as the services supplied by the appellant are purely commercial in nature even though the service recipient i.e., APEPDCL is a Government entity. With reference to the letters submitted by the appellant quoting various State Government Authorities such as, the Executive Director, APEPDCL, The Spl. Chief Secretary, Land & DM, and Commissioner for DM & EO Secretary to Government (FAC) Project Director, NCRMP/APDRP stating that the activities of APEPDCL are non-commercial in nature attracting 12% GST, it is considered that these opinions had no legal validity as per the Act, in view of the classification of the services. Hence we do not find any merit in the above contention and rejecting the same due to the lack of legal or statutory support to the argument. The decision of AAR upheld.
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