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2019 (8) TMI 1352 - AAR - GSTScope of supply - execution of works requiring modification/ augmentation/ shifting/ additions to the transmission system of RVPN at the specific request of the consumer/intending agency under Deposit Work - whether ‘Supply’ in terms of Section 7 of the CGST Act, 2017? - HELD THAT:- The term ‘supply’ has been defined in Section 7 of GST Act, 2017 and it includes all forms of supply (goods or services) and includes agreeing to supply when they are for a consideration and in the course or furtherance of business. It specifically includes sale, transfer, barter, exchange, license, rental, lease or disposal. For a transaction to qualify as ‘supply’, it is essential that the same is ‘in the course or furtherance of business’. In the instant case, the transaction of facilitating the execution of deposit works to the applicant’s transmission system at the specific request of the consumer/ intending agency is included under the ‘scope of supply’ in terms of section 7 of GST Act, 2017 as the same fulfills all the essential ingredients of ‘supply’ as it is a supply of service in the form of facilitation, further there is a consideration as the construction activities carried out by the customer / intending agency will ultimately be the property of the applicant - Thus all the ingredients of section 7(1)(a) are present to be categorized the transaction as supply of services. Considering the fact that the ownership of asset remains with the applicant, it is evident that the execution of works requiring deposit works is a facilitation for the access/ use of such transmission system and thus such facilitation is a ‘supply’ of services. Valuation of supply - Work executed by RVPN itself - Section 15 of the GST Act, 2017 - HELD THAT:- When the applicant incurred such cost, then GST would automatically be leviable on total transaction value without any recourse to section 15(2)(b) of GST Act, 2017 - Accordingly, even when the cost of deposit work to the applicant’s transmission system is incurred by the consumer/ intending agency itself, such cost is also required to be included in the transaction value and to be considered as value of supply for the purpose of levy of GST in terms of section 15(2)(b). Valuation of supply - Work executed by the consumer/ intending agency under supervision of RVPN - Section 15 of the GST Act, 2017 - HELD THAT:- In the present case where the deposit work is undertaken by the consumer/ intending agency under supervision of the applicant, the cost is directly incurred by the consumer/ intending agency, still the applicant is exclusively liable and responsible for modification/ alteration of the transmission infrastructure as per Electricity Act, 2003 so as to comply with the grid standards and that’s why the work is mandatorily to be executed under the supervision of applicant - Thus, since the applicant is liable and responsible for such work, therefore, according to section 15(2)(b) of GST Act, 2017, the cost of such asset/ infrastructure incurred by the consumer/ intending agency is to be included in the value of supply - in addition to supervision/ shutdown charges, by virtue of section 15(2) (b) of GST Act, 2017 the cost incurred by the consumer/ intending agency, for creating the infrastructure is also required to be included in the transaction value and to be considered as value of supply for the purpose of levy of GST. Applicable rate of GST - HELD THAT:- Services provided by the applicant to the consumer/ intending agency falls under HSN/SAC 998631 and will attract GST @ 18%, as per Annexure to N/N. 11/2017 Central Tax (Rate) dated 28th June 2017 (as amended).
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