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2020 (6) TMI 489 - AAR - GSTSupply for work contract or not - Government Entity of not - contract entered into with AWNL as per the work orders combine of supply, erection, testing and commissioning of materials/equipments for providing rural electricity infrastructure - taxable at the rate of 12% in terms of Sr. No. 3(vi)(a) of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 as amended w. e. f. 25.01.2018? - HELD THAT:- AWNL has been established under the Companies Act, 1956 by Govt, of Rajasthan with the principal objective of engaging in the business of distribution and supply of electricity in 11 districts of Rajasthan, namely Ajmer, Bhilwara, Nagaur, Sikar, Jhunjhunu, Udaipur, Banswara, Chittorgarh, Rajsamand, Dungarpur and Pratapgarh. Further, (a) they are established by the Government with 90 per cent, or more participation by way of equity or control (b) they carry out a function entrusted by the Government. Thus AWNL is a government entity. Further, the applicant in the instant case is executing works Contract for supply of material/ equipment and erection, testing & commissioning of supplied material/equipment for ‘providing of Rural Electricity infrastructure for House hold electrification (6 35/0.24 KV single Phase Distribution Transformer sub-station 11 kv single phase line, LT single Phase line & BPL connections) in selected blocks under RGGVY scheme on turnkey basis’. In Dungarpur District to AVVNL, Ajmer which is a Government Entity. M/s AWNL is involved in supply of electricity to the consumers and are collecting consideration in lieu of the said supply. The 'Electricity' as per GST is classified under the category of 'goods' and thus M/s AWNL is supplying goods to consumers and is receiving consideration against the same - Explanation Clause inserted vide Notification No. 17/2018-CT dated 26.07.2018 is not applicable in the instant case as activities are not undertaken by the Central government or State Government or any local authority as public authorities. From definition of business, it is clear that any activity of trade, commerce or manufacture etc. or any other similar activity is included in the definition of business and it is immaterial whether it is done for a pecuniary benefit, and any activity done in connection with or incidental or ancillary to sue activity is also included in the scope of business - M/s AWNL is involved in the supply of goods as already explained and hence they are involved in the business of supplying goods. They also receive consideration for the supply of electricity. The predominant activity of M/s AWNL is to supply electricity and work undertaken by the applicant in the instant case is to help M/s AWNL predominantly in this work. Hence, the work undertaken by the applicant in the instant case is an original meant predominantly for use for commerce, industry, or any other business or profession. Thus, all the five conditions prescribed implicitly by Entry No. 3(vi)(a) of the Notification No.11/ 2017 - Central Tax (Rate) dated 28.06.2017 are satisfied by the applicant except one, viz. that the activity is meant predominantly to be used other than commerce, industry, or any other business or profession. Thus, work undertaken by the applicant as per Contract RGGVY/TN-13 for AWNL, Ajmer by way of supply of material/ equipment and erection, testing & commissioning of supplied material/equipment is though a Composite Supply of Works Contract but the same is not covered under the Entry' No. 3(vi)(a) of the Notification No. 11/ 2017 - Central Tax (Rate) dated 28.06.2017 (as amended).
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