TMI Blog2020 (12) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... ly) Act, 1948 for carrying out the business of Generation, Transmission and Distribution of electricity in the State of Kerala - It is evident that the Kerala State Electricity Board Ltd is incorporated under the Companies Act, 1956 with 90 per cent or more participation by way of equity or control of the Government of Kerala to carry out the business of generation, transmission and distribution of electricity in the State of Kerala and is a State Transmission Utility within the meaning of Section 2 (67) of the Electricity Act, 2003. Kerala State Electricity Board Ltd cannot be considered as that constituted/established by the Government of Kerala to carry out any function entrusted to a Municipality under article 243W or a Panchayat under article 243G of the Constitution. Therefore, Kerala State Electricity Board Ltd does not fall under the definition of Government Authority as defined in Para 2(zf)of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended. However, Kerala State Electricity Board Ltd is also a Board constituted by the State Government with share of 90% or more of the State Government. Hence, Kerala State Electricity Board Ltd squarely falls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered as that meant predominantly for use other than for commerce, industry, or any other business or profession. Thereby, the condition mentioned in para 8.3 is not fulfilled. The Kerala State Electricity Board Ltd falls under the category of a Government entity for the purpose of the said exemption - The supply of services viz. execution of the civil works of Pazhassi small hydro electric project covered under Work order No. 06/CEECCN/ 2017-18 dated 06.10.2017 made by the appellant to the Kerala State Electricity Board Ltd are not eligible to concessional rate of CGST @6%provided by the said notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The said services shall not be eligible for concessional rate of SGST @6% also in terms of notification No. SRO 370/2017 dated 30.06.2017 since the CGST statutory provisions are pari materia with State GST provisions. The ruling of authority upheld. - Order No. AAR/08/2020 - - - Dated:- 3-12-2020 - SHYAM RAJ PRASAD IRS AND ANAND SINGH IAS, MEMBER Authorized Representative : Adv. S. Durairaj 1. The appeal stands filed under section 100(1) of the GST Act, 2017, by M/s R. S. Development and constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Kerala to carry out the business of generation, transmission and distribution of electricity in the state and is a state transmission utility within the meaning of section 2(67) of the Electricity Act,2003. Thereby KSEB cannot be considered as constituted or established by the Government to carry out any function entrusted to a municipality under Article 243 W or a Panchayat under Article 243 G of the constitution. Therefore KSEB will not come under the definition of Governmental authority under para 2(zf) of notification no: 12/2017-Central tax (rate) dated 28/6/2017. However, the KSEB squarely falls under the definition of 'Government entity' under para 2(zfa) of notification no.12/2017-Central tax (rate) dated 28/6/2017. 3.2. The concessional rate of GST of 12% under S1. No. 3(vi) of notification no. 11/2017-Central Tax (rate) dated 28/6/2017 is applicable only for composite supply of works contract as defined in Section 2(119) of the CGST Act 2017, supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of (a) civil structure or any other original works meant predominantly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contracts are predominantly for the purpose of socio economic development of the country, which is one of the functions entrusted to a Municipality in Article 243W of the Constitution read with Twelfth Schedule. Therefore, KSEB Ltd is a Governmental Authority as defined in Notification No. 11/2017-CT (Rate). 4.5. The pre-dominant nature of supply is construction of part of dam I.e., construction of various structures of dam like tunnels etc. Such structures are covered by the definition of DAM as per the Dam Safety Bill, 2019, which was passed in the Lok Sabha. 4.6. Therefore, Sl.No.3(iii)(b) of Notification 11/2017-CT (Rate) is applicable. 4.7. One of the conditions in Sl.No.3(vi) is that it must be meant pre-dominantly for use other than for commerce, industry, or any other business or profession. The work order would satisfy nature of work is original works as defined in clause (zs) of para 2 of notification 12/2017-CT (Rate). As explained above, it is provided to a Governmental Authority, which is meant predominantly for socio economic development of the country. Therefore, all conditions are fulfilled. 4.8. Therefore, Sl.No.3(vi)(a) of Notification 11/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. The issues for determination in this appeal may be listed as follows: a. Whether Kerala State electricity Board Ltd would fall under any of the categories viz. Central Government, State Government, Union territory, a local authority, a Government authority or a Government entity for the purpose of the said exemption? b. Whether the supply of, services viz. execution of the civil works of Pazhassi small hydro electric project covered under Work order No. 06/CEECCN/ 2017-18 dated 06.10.2017 made by the appellant to the Kerala State Electricity Board Ltd are eligible to concessional rate of CGST @6% under Sl no:3 (iii)or 3(vi) of notification no. 11/2017 Central tax (rate) dated 28.06.2017. c. Consequently, whether the said services shall attract concessional rate of SGST also @6% in terms of notification No. SRO 370/2017 dated 30.06.2017 since the CGST statutory provisions are pari materia With State GST provisions. 7. In order to arrive at a decision on the issues highlighted above, the relevant legal aspects and the relevant notifications are being analyzed as under. The appellant has claimed concessional rate of GST @ 6% CGST on the said suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (il) a clinical, or(iii) an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in paragraph 3 of the Schedule III of the Central Goods and Services Tax Act, 2017. 6 {Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case maybe 8.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, leading channel, tunnel power house, tail race, civil works of the switch yard access roads and other allied works, fabrication and erection of Steel liners and specials from tunnel portal to powerhouse trash rack, intake gate, draft tube gate and Hoisting arrangements. Accordingly, the works entrusted involves construction and transfer of property in goods and the property in goods cannot be removed without dismantling the same. Therefore, it is observed that the works undertaken by the appellant for KSEB satisfies the definition of Works contract service and hence, the condition detailed in para 8. 1(a). supra is satisfied. 10.1. As regards condition of the said notifications as stated in para 8.1 (b) above, the- appellant has claimed that KSEB squarely falls under the definition of Government authority. This contention was examined in the light of the definition of 'Government authority' and 'Government entity' contained in Notification No. 12/2017-central Tax (rate) dated 28.06.2017 as amended vide notification No. 32/2017 - Central Tax (Rate) dt 13.10.2017. As per Para 2(zf) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, the express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 013 re-vesting all the assets, liabilities, rights and obligations of the erstwhile Kerala State Electricity Board, which were vested in the State Government by the first transfer scheme dated 25.05.2008, to Kerala State Electricity Board Ltd. 10.7. From the above discussion, it is evident that the Kerala State Electricity Board Ltd is incorporated under the Companies Act, 1956 with 90 per cent or more participation by way of equity or control of the Government of Kerala to carry out the business of generation, transmission and distribution of electricity in the State of Kerala and is a State Transmission Utility within the meaning of Section 2 (67) of the Electricity Act, 2003. 10.8. On the basis of above stated facts Kerala State Electricity Board Ltd cannot be considered as that constituted/established by the Government of Kerala to carry out any function entrusted to a Municipality under article 243W or a Panchayat under article 243G of the Constitution. Therefore, Kerala State Electricity Board Ltd does not fall under the definition of Government Authority as defined in Para 2(zf)of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 as amended. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 2 of the SGST/CGST Act, is as follows:- (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) services provided by a race club by way of totalisator or a licence to book maker in such club ; and (t) any activity or transaction undertaken by the Central Government, a State Government or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of Notification No. SRO 370/2017 dated 30.06.2017 since the State GST provisions are pari materia with CGST statutory provisions. 14. After having discussed the facts and legal position of the case in hand, we would determine the issues as details in para 6 (a), (b) (c) of this order in seriatim as under. 14.1. The Kerala State Electricity Board Ltd falls under the category of a Government entity for the purpose of the said exemption. 14.2. The supply of services viz. execution of the civil works of Pazhassi small hydro electric project covered under Work order No. 06/CEECCN/ 2017-18 dated 06.10.2017 made by the appellant to the Kerala State Electricity Board Ltd are not eligible to concessional rate of CGST @6%provided by the said notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. 14.3. Consequently, the said services shall not be eligible for concessional rate of SGST @6% also in terms of notification No. SRO 370/2017 dated 30.06.2017 since the CGST statutory provisions are pari materia with State GST provisions. 15. Moreover, on the basis of the above discussion and findings, the contention of the appellant that the Advance ruling in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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