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2018 (11) TMI 1505 - AAR - GSTRate of GST - work contract services involving the supply of goods and services to CSPDCL - CSPDCL is a Government authority /Government entity or not - work predominantly for use other than for commerce, industry or any other business of profession or not - whether taxable at 18% or 12%? - Held that:- Close scrutiny of the balance sheet of CSPDCL reveals that 100% equity of CSPDCL as held by CSPDHL (Chhattisgarh State Power Distribution Holding Company Limited) and 100% of equity of CSPDHL is being held by Government of Chhattisgarh as is evident from the balance sheet of CSPDHL as on 31st March, 2016 - there is no ambiguity as regards CSPDCL, being a Government entity in view of the definition of 'Government Authority' as stipulated under N/N. 31 /2017-Central Tax (Rate), dated 13-10-2017. Nature of activities being under taken by the applicant - whether the same can be treated as the work predominantly for use other than for commerce, industry or any other business of profession or not? - Held that:- For availing the benefit of exemption Notification No. 24/2017State Tax (Rate), dated 23-9-2017, the pre-condition is that the services being provided by the Applicant to CSPDCL by way of construction erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of a civil structure or any other original works must predominantly be for use other than for commerce, industry, or any other business or profession. This effectively means that for availing the aforesaid benefit of reduced tax rate, it is of paramount importance that the services under taken/work done by the Applicant for CSPDCL must necessarily for use which is non-commercial in nature. Whether the constitution of CSPDCL has been incorporated for commercial aim or otherwise? - Held that:- It is seen that CSPDCL is a company incorporated under the Companies Act 1956, earlier known as Mahanadi Power Development Company Limited (Company Registration No. 1015822, dated 19-5-2003) and is a company limited by share. Further it is also in public domain that the main Objects of CSPDCL - on going through the main/ancillary objectives as enumerated in Memorandum of Association of CSPDCL, there hardly remains any doubt regarding the principal/primary and foremost aim of CSPDCL being predominantly commercial in nature The nature of activities of CSPDCL being principally and predominantly, being commercial in nature, as per their (CSPDCLs) Memorandum of Association itself, we come to the considered conclusion that the works contract services provided by the applicant M/s. A2Z Infra Engineering Ltd., Raipur to CSPDCL is liable for CGST and SGST @ 9% each. Ruling:- In the light of Notification No. 11/2017-State Tax (Rate), dated 28-6-2017 read with amendment Notification No. 24/2017-State Tax (Rate), dated 23-9-2017 and as the nature of works contract services provided by the Applicant. M/s. A2Z Infra Engineering Ltd., Raipur to Chhattisgarh State Power Distribution Company Ltd. (CSPDCL) being predominantly for commercial use by CSPDCL, the said services provided by the Applicant to CSPDCL, attracts CGST and SGST each @ 9% respectively.
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