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2020 (6) TMI 540 - AAR - GSTClassification of Services - Contract with Railtel Corporation of India ltd. - whether the service will fall under the Notification 24/2017-Central Tax (Rate) Sr.No.3(iv)-Construction Service or Original Work to Government Authority - rate of tax - whether taxable at 12% or not - Government entity or not - HELD THAT:- The contract is for construction, erection, commission, installation and completion of original work. The contract is a new construction and involves excavation of trenches and laying of Optical Fibre Cables(OFC) through ducts, testing, commissioning of OFC and maintenance in the 03 blocks in Nakhatrana and Abdasa of Kachchh district, thus involves erection, commissioning and installation of equipment or structures and thus the second condition is satisfied. Whether the person to whom the applicant is providing the work/service is covered under the definition of ‘Government Authority’ or ‘Government Entity’? - HELD THAT:- The applicant is executing the work for M/s. Railtel Corporation of India ltd.(on behalf of Bharat Broadband network ltd.) which is a Government of India undertaking with 90 percent or more participation by way of equity or control. However, in order to fulfil the definition of being a ‘Government Authority’, the work carried out by the applicant for M/s. Railtel Corporation of India ltd. should be any function entrusted to a Municipality under Article 243 W of the Constitution or to a Panchayat under Article 243 G of the Constitution. Whether the civil structure that has arisen or come into existence as a result of the work executed/service provided by the applicant for M/s. Railtel Corporation of India ltd. i.e. optical fiber cables laid under the ground is meant predominantly for use other than for commerce, industry, or any other business or profession as envisaged in 3(vi)(a) of Notification No.24/2017-Central Tax(Rate) dated 21.09.2017? - HELD THAT:- The work done by the applicant for M/s. Railtel Corporation of India ltd. involves digging of trenches and laying of optical fiber cables for the purpose of supply of internet connection to the Gram Panchayat. However, it cannot be construed that the optical fiber cables laid underground are meant predominantly for use other than for commerce, industry, or any other business or profession - The said explanation clause is not applicable in the instant case as these are not activities undertaken by the Central government, State Government or a local authority but are undertaken by M/s. Railtel Corporation of India(on behalf of M/s. Bharat Broadband network ltd.) through the applicant. Any activity of trade, commerce, manufacture etc. or any other similar activity is included in the definition of business and it is immaterial whether it is done for a pecuniary benefit, and any activity done in connection with or incidental or ancillary to such activity is also included in the scope of ‘business’ - the applicant in the course of providing work contract service to M/s. Railtel Corporation of India ltd. (on behalf of M/s. Bharat Broadband Network ltd.) is involved in the laying of trenches and laying optical fiber cables (goods) through which they are providing/supplying internet connectivity to the gram panchayats. However, it cannot be construed that the optical fiber cables laid underground are meant predominantly for use other than for commerce, industry, or any other business or profession as stated by the applicant. The work done by the applicant under the contract with M/s. Railtel Corporation of India ltd. does not fall under the Notification No.24/2017-Central Tax (Rate) Sr. No.3(vi)-Construction Service of Original Work to Government Authority.
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