TMI Blog2021 (1) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28.06.2017, as amended, are satisfied by the applicant except one, viz. that the activity is meant predominantly to be used other than commerce, industry, or any other business or profession - RAJAAR has disallowed the benefit of concessional rate of GST under Entry No. 3 (vi)(a) of Notification No. 11/2017-Central Tax(Rate) dated 28.06.2017(as amended) on the premise that M/s AVVNL is involved in the business of supplying goods hence the work undertaken by the appellant cannot be said to have been used predominantly for use other than for commerce, industry, or any other business or profession. Hence the only dispute remains to be decided before us is whether the work undertaken by the appellant have been used predominantly for use other than for commerce, industry, or any other business or profession. The work order under the discussion is for providing rural electricity infrastructure under Rajiv Gandhi Grameen Vidhyutikaran Yojana, hence before reaching any conclusion, it would be better to have a look at the objective and scope of RGGVY. From the perusal of Guidelines for Preparation of DPRs under XII Plan of RGGVY submitted by the appellant along with written subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of electricity. The predominant activity of M/s. AVVNL is to supply electricity and the civil structure or original work being under taken by the Appellant shall be used for transmission of electricity which is predominant activity of AVVNL and is chargeable - the work undertaken by the applicant in the instant case is an original work which is incidental or meant predominantly for use for commerce, industry, or any other business or profession. The AVVNL, though a Government Entity, is engaged in the business activity i.e. purchase and sale of electricity. As per the Memorandum of Association of the AVVNL, one of the main objective of formation of AVVNL is to carry on the business of purchasing, selling, importing, exporting, wheeling, system operation, trading of power, including formulation of tariff, billing and collection thereof - thus, the work being undertaken by the Appellant is predominantly used for or incidental to the main activity of AVVNL i.e. transmission (sale) of electricity. Appeal dismissed. - RAJ/AAAR/02/2020-21 - - - Dated:- 3-9-2020 - SH. PRAMOD KUMAR SINGH, AND SH. ABHISHEK BHAGOTIA, MEMBER Present for the appellant : CA. Sanjay Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs are interrelated and are composite supply of work contract. The same were submitted before advance ruling authority. 3.3 The appellant filed an application for Advance Ruling before the Rajasthan Authority for Advance Ruling vide Application reference number AD080120002058T dated14.01.2020 seeking clarification for the following two question: (I) Whether the contract entered into with AVVNL as per two work orders combine of supply, erection, testing and commissioning of materials/ equipments for providing rural electricity infrastructure qualifies as a supply for work contract under Section 2(119) of the CGST Act? (II) If yes, whether such supply, erection, testing and commissioning of materials/equipments for providing rural electricity infrastructure made to AVVNL would be taxable at the rate of 12% in terms of Sr. no 3 (vi)of Notification No. 11/2017- C.T.(Rate) as amended w.e.f. 25.01.2018? 3.4 The Rajasthan Authority for Advance Ruling, (hereinafter also referred as the AAR ) vide Advance Ruling No. RAJ/AAR/2020-21/04 dated 14.05.2020 = 2020 (6) TMI 489 - AUTHORITY FOR ADVANCE RULING, RAJASTHAN passed the following order: (i) The work undertaken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served by the apex court in Sahar India (Firm) vs. CIT(2008) 300 ITR 403 (SC) = 2008 (4) TMI 4 - SUPREME COURT , The expression natural justice is also not capable of a precise definition. The underlying principle of natural justice, evolved under the common law is to check arbitrary exercise of power by the state or its functionaries. Therefore, the principle implies a duty to act fairly, i.e., fair play in action. The aim of rules of natural justice is to secure justice or, to put it negatively, to prevent miscarriage of justice . Where in the Law u/s 107 (9) it is provided the authority may provide for three adjournments for the case, if sufficient cause is given. The same is incorporated in law in view to mandate the r opportunity of being heard. Applying the analogy from there, it can be seen under the facts of the case that the order passed was in haste without affording opportunity as asked by appellant. 4.4 Further it is pertinent to mention that Hon ble Apex Court taken up Suo Moto Writ Petition (Civil) No 3/2020 dated 23.03.2020 = 2020 (5) TMI 418 - SC ORDER in view of COVID -19 virus exercising power under Article 142 read with Article 141 of Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant except one, viz. that the activity is meant predominantly to be used other than commerce, industry, or any other business or profession. Thus, work undertaken by the applicant as per contract RGGVY/TN-13 for AVVNL, Ajmer by way of supply of material/ equipment and erection, testing commissioning of supplied material/ equipment is though a Composite Supply of works contract but the same is not covered under the Entry No. 3(vi)(a) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and accordingly not eligible for beneficial rate notification. 4.7.1 The appellant want to submit the following submission in respect observation of AAR: AVVNL is a company owned and controlled by Government of Rajasthan, created for the distribution of electricity in various parts of Ajmer district formed under the Statue pronounced by State Legislature. AAVNL is incorporated by Government of Rajasthan. It is discussed and clear that the AVVNL is a Government Entity as it is 100% owned and controlled by the Government of Rajasthan incorporated to carry out a function entrusted by the State Government of providing electricity in the district of Ajmer. The work order under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chedule. In Eleventh Schedule at serial number 14 the item listed is .. 14. Rural electrification, including distribution of electricity Further u/s 2 (69) of the CGST Act defines Local Authority as under (69) Local authority means-- (a) A Panchayat as defined in clause (d) of article 243 of the Constitution; (b) A Municipality as defined in clause (e) of article 243P of the Constitution; (c) A Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund; (d) A Cantonment Board as defined in section 3 of the Cantonments Act, 2006; (e) A Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; (f) A Development Board constituted under article 371 of the Constitution; or (g) A Regional Council constituted under article 371A of the Constitution; 4.7.2 From the above discussion, it can be analysed that the work order is: a. Sponsored Programme of central government b. The work order is related to rural electrificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering appellant submission to submit clarification in respect to points asked during personal hearing on 19.03.2020. Nobody was aware about the facts that when lockdown will over and movement will start. The authority taking premise of appellant mail to seek time and altogether ignoring the situation and the principle of natural justice decided the ruling. In order to address the grievance of the appellant w.r.t. non-adherence of the principle of natural justice by RAJAAR, we find it proper to grant an opportunity to the appellant to enable him to submit his submissions which could not be submitted before the RAJAAR. Accordingly, personal hearing was granted on 18.08.2020. Personal Hearing 5. A personal hearing in the matter was held on 19.08.2020. Shri Sanjay Kumar Rathi, C.A., appeared for personal hearing on behalf of the Appellant. During the PH he reiterated the grounds of appeal and also made written submission. He submitted following documents at the time of personal hearing- (i) Copies of the two Work Orders received from AVVNL, Ajmer to the appellant. (ii) Copy of Order dated 14.05.2019 of AAAR, West Bengal in the case of ITD Cementation Limited. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey 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 may be The aforementioned Entry stipulates some conditions to make eligible any work to fall under this entry, which are as following: a. It must be a composite supply of works contract as defined in section 2 (119) of the CGST Act, 2017; b. It must be provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity; c. The contract should be by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of a civil structure or any other original works; d. The civil structure or original works must be meant predominantly for use other than for commerce, industry, or any other business or profession; and e. 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 a local au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... predominantly in this work. Hence, the work undertaken by the applicant in the instant case is an original meant predominantly for use for commerce, industry, or any other business or profession. 6.4 From the above we find that the RAJAAR has disallowed the benefit of concessional rate of GST under Entry No. 3 (vi)(a) of Notification No. 11/2017-Central Tax(Rate) dated 28.06.2017(as amended) on the premise that M/s AVVNL is involved in the business of supplying goods hence the work undertaken by the appellant cannot be said to have been used predominantly for use other than for commerce, industry, or any other business or profession. Hence the only dispute remains to be decided before us is whether the work undertaken by the appellant have been used predominantly for use other than for commerce, industry, or any other business or profession. 6.5 The work order under the discussion is for providing rural electricity infrastructure under Rajiv Gandhi Grameen Vidhyutikaran Yojana, hence before reaching any conclusion, it would be better to have a look at the objective and scope of RGGVY. From the perusal of Guidelines for Preparation of DPRs under XII Plan of RGGVY submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the same, hence they are involved in the business of supplying goods. They also receive consideration for the supply of electricity. The predominant activity of M/s. AVVNL is to supply electricity and the civil structure or original work being under taken by the Appellant shall be used for transmission of electricity which is predominant activity of AVVNL and is chargeable. Hence, we hold that the work undertaken by the applicant in the instant case is an original work which is incidental or meant predominantly for use for commerce, industry, or any other business or profession. 6.8 During the personal hearing, the appellant pleaded that Order of AAAR, West Bengal in the case of M/s ITD Cementation Limited = 2019 (5) TMI 1399 - APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL is squarely applicable in their case. We find that in this case the composite supply of works contract was to Inland Waterways Authority of India for construction of a multi model IWT terminal at Haldia on EPC (Engineering, Procurement, Construction). It was held that creation of IWT terminal is not for propagating any business or commercial interest of IWAI. It was further held that remittance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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