TMI Blog2020 (12) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... Ruling contains the term in, relation to , which enlarges the scope of a provision. The definition states that the question should be in relation to supply and not about supply. There is nothing in the text of the section that states that the question can only be about supply. Once this assumed pre-condition is done away with, it becomes clear how subject matter of the questions listed in Section 97(2) get covered under an Advance Ruling as per Section 95(a). The definition of Advance Ruling contains the term in relation to , which enlarges the scope of a provision - Rule of Harmonious Construction is used to avoid any inconsistency and repugnancy within a section or between a section and other parts of a statute. The rule follows a very simple premise that every statute has a purpose and intent as per law, and should be read as a whole. The interpretation which is consistent with all the provisions and makes the enactment consistent shall prevail. The doctrine follows a settled rule that an interpretation that results in injustice, hardship, inconvenience and anomaly should be avoided. MPPGCL has been established by M.P. Government with the objective of carrying out power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE - 3.1. Madhya Pradesh Power Generating Co. Ltd. (MPPGCL) is a wholly owned company of MP Government engaged in generation of electricity in the state of Madhya Pradesh. It is a successor entity of erstwhile Madhya Pradesh State Electricity Board (MPSEB). 3.2. The Company, while operating and maintaining its existing units, is also constructing new Power Plants for increasing capacity in the State of Madhya Pradesh. It is having four thermal power plants namely SSTPS Dongalia (Khandwa), SGTPS Birsinghpur, ATPS Chachai and SSTPS Sarni and 10 hydel stations allover Madhya Pradesh. 3.3. MPPGCL has issued various work orders for construction, erection, commissioning, maintenance, installation, repair, renovation, alteration etc. of its power houses. It has also issued work orders for operation and maintenance of powerhouses for generation of electricity and various ancillary works. 3.4. The honourable authority of Advance Ruling has passed an order no. 16/2019 dated 25t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Government as per Notification No. 11/2017 CT(R) as amended? (Sample copies of order enclosed). 4.3. GST Rate applicable on O M and other ancillary contracts awarded by MPPGCL (list enclosed) which are in relation to work entrusted to MPPGCL by the State Government as per Notification No. 11/2017-CT(R) as amended? (Sample copies of order enclosed). 5. DEPARTMENT VIEW POINT - The concerned officer is of view that in absence of copies of all contracts no opinion can be can be given. 6. RECORD OF PERSONAL HEARING - 6.1. CA Shree Neeraj Agrawal, counsel for Madhya Pradesh Power Generating Co. Ltd on behalf of the applicant for personal hearing on electronic mode and he reiterated the submission already filed along with the Application. The Applicant have submitted following additional submission on 29.10.2020 which is reproduced as under :- 6.2. MPPGCL has placed various work orders on various parties for the following works: a. Construction, alteration, repair, renovation, commissioning, installation, maintenance etc. of various civil structures like power houses, residential colonies, office buildings etc. b. Operation and Maintenance of powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d others. 2. Government Entity means an authority or a board or any other body including a society, trust, corporation, a. set up by an Act of Parliament or State Legislature; or b. established by any Government, with 90 per cent. or more participation' by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority. 3. GST Rate @12% is defined on Construction Services at S.No. 3(vi) of the amended notification: Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, other than that covered by items (i). (ia),(ib), (ic), (id), (ie) and (if) above, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. To Plan, promote, develop, design, engineer, construct , operate and maintain Electricity System as defined under section 2(25) of Electricity Act, 2003 and integrated fuel system in all its aspect including design and engineering; prepare feasibility report, detailed project report and appraisal report; establish; own; construct; operate and maintain electricity system for generation, evacuation, transmission and distribution of power for supply to the State Electricity Utilities. Electricity Boards, Power Utilities. Generating Companies, Transmission Companies, Distribution Companies, State Governments. Licensees, statutory bodies, other organisations (including private; public and joint sector undertakings) and bulk consumers of power in accordance with the applicable laws, rules, regulation, policies, procedures, guidelines and objectives prescribed by Govt. of India from time to time. iii. To act as Consultant/ Technical Adviser of Public/Private Sector Enterprises, etc. engaged in power generation, transmission and distribution and for financial institution; banks, Central Government and State Government and agencies engaged in research, design, enginee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Rate), dated 29-3-2019. k. Corrigendum GSR 327(e), dated 25-4-2019, l. Notification no. 10/2019-Central Tax (Rate), dated 10-5-2019 m. Notification no. 20/2019-Central Tax (Rate), dated 30-9-2019, n. Notification no. 26/2019 - Central Tax (Rate), dated 22-11-2019, o. notification no. 2/2020 - Central Tax (Rate), dated 26-3-2020 3. The amended S.No. 3 clause (vi) of the notification states that the following services will be taxed at the rate of GST of 12% (CGST 6%): Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017, other than that covered by items (i), (ia), (lb), (ic), (id), (ie) and (ifi above, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government and State Government and agencies engaged in research, design, engineering of all of power, both conventional and non-conventional. b. From the above para it is clear that M.P. Power Generating Co. Ltd was constituted with the object to generate electricity in the state of Madhya Pradesh and also to maintain and operate its units and construct new units. c. All the work orders, be it related to construction or operation and maintenance are in relation to work entrusted to MPPGCL by Government of India. Clause (vi) of S.No. 4 of the notification covers construction contracts. So applying the above referred judgement all construction contracts awarded by MPPGCL which are in relation to work entrusted to it should be taxed at the rate of 12%. 7. DISCUSSIONS AND FINDINGS 7.1. We have carefully considered the submissions made by the applicant in the application, the pleadings on behalf of the Applicant made during the course of personal hearing, additional submissions after the hearing and the Department's view provided by the jurisdictional officer. 7.2 Before we take up the questions, we first need to decide the eligibility of a recipient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng supplied, but it is open to everybody. so long as it is in relation to supply of goods and services by the applicant and is covered u/s 97(2). 7.3. The definition states that the question should be in relation to supply and not about supply. There is nothing in the text of the section that states that the question can only be about supply. Once this assumed pre-condition is done away with, it becomes clear how subject matter of the questions listed in Section 97(2) get covered under an Advance Ruling as per Section 95(a). The definition of Advance Ruling contains the term in relation to , which enlarges the scope of a provision. 7.3.1. The Rule of Harmonious Construction is used to avoid any inconsistency and repugnancy within a section or between a section and other parts of a statute. The rule follows a very simple premise that every statute has a purpose and intent as per law, and should be read as a whole. The interpretation which is consistent with all the provisions and makes the enactment consistent shall prevail. The doctrine follows a settled rule that an interpretation that results in injustice, hardship, inconvenience and anomaly should be avoided. The interpre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rns do not apply to an Advance Ruling and its precedential value is NIL. An Advance Ruling may have persuasive value but cannot be a binding precedent on account of its limited applicability by virtue of Section 103 of the Act, which states that an advance ruling pronounced by the Authority or the Appellate Authority shall be binding only on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling and on the concerned officer or the jurisdictional officer in respect of the applicant. Thus an Advance Ruling in respect of a transaction pronounced in a state is not binding on the same transaction undertaken by the same applicant in another state. 7.4.3. In light of the above status of the binding precedent of an Advance Ruling any question regarding the applicability of an Advance Ruling pronounced to another application is infructuous. Thus, ate, first question regarding applicability of the Advance Ruling in the matter of M/s. Kalyan Toll Infrastructure Ltd is infructuous. 7.4.4. Further, an advance ruling is on the combined effects of a set of facts of a transaction and provision of applicable law. The question a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso as per Notification No. 31/2017-C.T. (Rate), dated 13-10-2017. 7.5.3. Entry No. 3(vi) to the Notification No. 11/2017-C.T. (R) refers to different nature and type of Construction Services as composite supply. The provision is as under: (vi) Composite supply of works contract as defined in clause (119) of Section 2 of the Central Goods and Services 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 work meant predominantly for use other than for commerce, industry or any other business or profession; (b) a structure meant predominantly for use as (i) and educational, (ii) 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 Act, 2017. The applicable rate of GST on the supplies covered under thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ascertain whether the contracts are Works Contracts and which Entry of Notification No. 11/2017 - Central Tax (Rate) they fall under. 7.7. The provisions relating to Advance Ruling are to assist the applicants in making compliance under the Act and prevent litigation. This provision is not for the applicant to use as advisory service for GST matters. The applicant has furnished list of 68 contracts and sought the rate of GST applicable on those 68 contracts. From a perusal of the list it appears that the supplies under the contracts are not identical. The application made, in the facts of the matter, is not in keeping with the spirit of the provisions of Advance Ruling. 8. Ruling 8.1. In respect of first question, regarding classification of supply in Entry No. 6 of Schedule II to the GST Act we are unable to answer the question on account of insufficient information provided by the applicant. Further in respect of first question, regarding applicability of the Advance Ruling in the matter of Kalyan Toll Infrastructure Ltd we have to state that the Advance Ruling in the matter of Kalyan Toll Infrastructure Ltd is not applicable to the Applicant on account of the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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