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2022 (2) TMI 842 - AAR - GSTLevy of GST - Valuation - GST at 18% on reimbursement of expenses i.e., Basic Salary, ESIC, EPF, Bonus with service charge or only on service charge for providing pure service by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution? - applicability of exemption contained in sl. No. 3 of the Notification No. 12/2017-CT (Rate) dated 28.06.2017 - HELD THAT:- There is mention of only rate per manpower per month in the Work orders and total amount of work order is excluding EPF/ESIC/WC contribution/commission charges & taxes. Further, in the tax invoice raised by the applicant, there is mention of cost of employees and the commission and there is no mention of EPF/ESIC/WC contribution on the invoice. MPMKVVCL is presently not an establishment with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the State Government. There is also nothing on record that MPMKVVCL is set up by an Act of Parliament or State Legislature. As such, we hold that MPMKVVCL is not a Govt. entity - although there is no such mention on the website of MPPKVVCL“ it is all likelihood that the same is also presently not an establishment with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the State Government like MPMKVVCL. There is also nothing on record that MPPKVVCL is set up by an Act of Parliament or State Legislature. Further, the Chief Financial Officer, MPPKVVCL, Indore in his GST Circular-11 issued under F.No. MD/WZ/02/Tax/259/9425 dated 10.05.2018 has only given the definition of 'Government Entity' and declared the Company as Government Entity without giving any criterion of the applicability of the said definition on the Company. As such, we hold that MPPKVVCL also is not a Govt. entity. Although it is accepted that rural electrification including distribution of electricity is covered in function entrusted to a Panchayat but we are of the view that the invoices issued to the Executive Engineer, MPPKVVCL or GM, MPMKVVCL by the applicant with description of supply of manpower (Rural) is not a sufficient document to conclude that the manpower will be actually used for distribution of electricity in rural area as a sub-station supplying electricity covers large area which include rural as well as urban area - the applicant is not entitled for exemption contained in Sl.No. 3 of the Notification No. 12/2017-CT (Rate) dated 28.06.2017. Section 15(1) clearly stipulates that the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. Further, sub-section (2) of Section 15 elaborates in detail, the items that are required to be included in the value of supply, whereas sub-section (3) of Section 15 specifically elaborates the items that are not to be included in the value of supply - As per Section 15 of the CGST Act, 2017, there is intent to include even all taxes, duties, cesses, fees and all charges in the value of supply and there can be no exception for ESI and EPF amount. Therefore, taking into the view the definition of 'consideration' and the aspect of 'valuation of supply' as discussed above, it is apparent that the GST is chargeable on the entire amount received by the applicant against supply of manpower.
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