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2019 (1) TMI 1671 - AAR - GSTGovernment authority/ Government Entity or not - applicable rate of GST - work agreement entered into with the APSPDCL - liability of GST on value of materials recovered from our RA bills issued on cost recovery basis by APSPDCL - reverse charge mechanism - N/N. 13/2017-Central Tax Rate dated 28.06.2017. Government authority/ Government Entity or not - Whether APSPDCL is a Government authority/ Government Entity or not? - HELD THAT:- The Applicant Contractee i.e. APSPDCL is a Government Company i.e. wholly owned by the Government of Andhra Pradesh. When a copy of Audited Annual Accounts of M/s APSPDCL for the Financial Year 2016-17 is examined, it is evident from the schedule of Equity Share Capital of the Annual Statement that 100% share capital is held by the Government of Andhra Pradesh in the name of Honourable Governor of Andhra Pradesh - Thus, it is concluded that the Government of Andhra Pradesh is having full control over the APSPDCL and covered under the definition of Government Entity. Nature of work undertaken by the applicant - HELD THAT:- The applicant is engaged in execution of works awarded by M/s Southern Power Distribution Company of Andhra Pradesh Limited for (1) Construction of indoor sub-station with control room and civil works; (2) Electrical Works; (3) Providing bore well (4) Erection of 33KV line with 100 sqmm AAA Conductor (DC); (5) Erection of 11 KV line with100 sqmm Conductor; (6) Erection of 33 KV UG cable; (7) Erection of 11 KV UG cable ; (8) 33 KV Railway crossing. Further, for all civil works, where materials such as sand, metal, gravel etc, are involved, the rates are inclusive of seignorage charges as fixed by the competent authority of Government of A.P. and the same will be recovered from the contract bills for remittance to the Government - The contract with APSPDCL is a single composite contract for supply of the said works on semi turnkey basis under IPDS. Work undertaken to execute/Implement various schemes for constructing sub stations, providing bore wells, erection of lines and required conductors etc. Moreover, the above works undertaken by APSPDCL are for business purpose and the benefit of Concessional Rate of 12% (6% under Central tax and 6% State tax) as per notification is NOT available to the applicant. 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% - Since APSPDCL being the Contractee are recovering the cost of the materials that are used/consumed in the services provided to them by the applicant from the R.A. Bills issued, such cost recovered is to be included in the taxable value of the supply.
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