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2019 (11) TMI 161 - AAR - GSTClassification of supply - Composite supply or not - supplies made to Government Entities - applicant has been awarded of contract works by the corporations of Karnataka Government such as M/s Dr. B.R. Ambedkar Development Corporation Limited, Schedule Tribes Welfare Department, Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited and other implementing agencies under Social Welfare Department, Government of Karnataka for providing the composite supply of drilling of bore wells for Irrigation purpose to small and marginal land owners of Schedule Caste/Schedule tribe/Other backward class farmers of economic weaker section, for agriculture purpose. HELD THAT:- The energized bore wells would be provided to the beneficiaries from the said Government Corporations. The beneficiaries are identified by the Corporation and the agreements are signed between the Corporation and the beneficiaries and the land is hypothecated to the Corporation towards the Loan component - The corporations allot the work to the drillers like the applicant and the contract is between the applicant and the corporation and there is no privity of contract between the applicant and the ultimate beneficiary. Further, the consideration for this contract is paid by the Corporation in full. Hence the service is provided by the applicant to the Corporation. In the instant case, the corporation is liable to pay the consideration for the composite supply of services of providing an energized bore well and hence the corporation would be deemed to be the recipient of supply of goods or services or both as per clause (93) of section 2 of the CGST Act and the supplier of this service is the applicant. Whether the corporations, which are receiving the service from the applicant, are Government entities within the meaning of the GST Act? - HELD THAT:- It is very clear that the corporations, Dr. B.R. Amedkar Development Corporation and Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited are both entities, established by the Government of Karnataka with 100% share capital and control to carry out the function entrusted by the Government of Karnataka. Hence they are clearly covered under the definition of “Government Entity” - The Minor Irrigation Scheme is defined by the Ministry of Water Resources, Government of India to include all ground water and surface water (both flow and lift) having culturable command area up to 2000 hectare individually. The provision of individual bore wells would come under the minor irrigation scheme for the reason that it involves the ground water by lifting and the culturable command area is less than 2000 hectare. Hence the provision of Energized Bore wells to individual farmers under the Ganga Kalyana Scheme would be covered under the Minor Irrigation Scheme. The service, being provided by the applicant, satisfies all the three required conditions and hence qualifies to be covered under entry No.3A to the Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No.2/2018-Central Tax (Rate) dated 25.01.2018 & thereby attracts “NIL” rate of GST.
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