TMI Blog2018 (11) TMI 1895X X X X Extracts X X X X X X X X Extracts X X X X ..... as per their MoA. However, the rate of tax needs to be determined looking at the actual use of structure. They further stressed that the objective of the work done under question is to be looked into and not the objectives of the entity undertaking the work. It is well settled position of law that statue or notification relating to concessional rate of tax should be strictly interpreted i.e. literal rule of interpretation should be followed. In notification no. 24/2017-Central Tax (Rate), dated 21st September, 2017 in clause (a), emphasis has been given on the words meant for use other than for commerce, industry, or any other business . The infrastructure intended to be provided by the Appellant under contract to CSPDCL will ultimately be used for distribution of electricity' and it is undeniable fact that CSPDCL collects charges as per the tariff decided for distribution of electricity which undisputedly falls within the ambit of 'Commerce' or 'business'. Therefore appellant's argument that nobody is bearing the cost of IPDS scheme does not hold water as there is no stipulation to this effect in the notification - It is also no body's case that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght an Advance Ruling for seeking clarification as to which rate of tax should be levied on services rendered by it. 6. The bench of Authority for Advance Ruling vide its order no. STC/AAR/03/2018 dated 19.07.2018 negated the grounds raised by Appellant and held that applicable rate of tax for such supply shall be 9% CGST 9% CGGST. 7. Aggrieved by this ruling of AAR, the appellant has filed an appeal against the said ruling under section 100(1) of the CGST Act 2017. Grounds of Appeal The appellant has stated following grounds of appeal in his application:- (i) It can be seen that only contention of the AAR While holding that 9% tax rate will be applicable is that the activities of the CSPDCL, as per their Memorandum of Association ( MOA ), are commercial in nature but according to the Appellant, the work undertaken by CSPDCL as per IPDS Scheme is non-commercial. (ii) That, it is undisputedly mentioned by the Advance Ruling Authority that CSPDCL is Government Entity (refer Para 6.3 of AAR order dated 19 July 2018). (iii) However, with respect to the condition as per notification 24/2017 dated 21/09/2017, the said work done must be meant predominantly for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis for denying the benefit of reduced rate of tax; what must be looked into is the nature of transaction/activity in question being undertaken by the Appellant. (ix) That, nowhere in the order dated 19 July 2017 AAR has discussed the project allotted to Appellant, to hold the same as commercial except in para(vii) wherein the AAR has merely ruled that such project is commercial without providing any concrete ground s as to why the project of setting up better infrastructure for power in order to provide maximum reach and uninterrupted supply in semi-urban areas amounts to be commercial project in nature. (x) Thus, the ground that CSPDCL undertakes commercial projects as per its MOA on which tax rate of 9% CGST and SGST has been ruled is wrong. Accordingly in the opinion of Appellant, the activity under consideration must be chargeable @ 6% CGST and SGST each. PRAYER In view of the foregoing, the prayer made by the appellant is as under:- a. To set aside the order in the Original Advance Ruling Application; b. Grant an opportunity for a personal hearing and make further submission of documents if any; c. Pass any such further or other order as may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsection (1) of section 11,sub-section (5) of section 15 and sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.11/2017- Central Tax (Rate), dated the 28thJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R. 690(E), dated the 28thJune, 2017, namely;- In the said notification, in the Table, against serial number 3, for item (vi) in column (3) and the entries relating thereto, in columns (3), (4) and (5). the following shall be substituted, namely:- (3) (4) (5) (vi) Services provided to the Central Government, State Government, Union Territory. a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. 12. It is well settled position of law that statue or notification relating to concessional rate of tax should be strictly interpreted i.e. literal rule of interpretation should be followed. In notification no. 24/2017-Central Tax (Rate), dated 21st September, 2017 in clause (a), emphasis has been given on the words meant for use other than for commerce, industry, or any other business . The infrastructure intended to be provided by the Appellant under contract to CSPDCL will ultimately be used for distribution of electricity' and it is undeniable fact that CSPDCL collects charges as per the tariff decided for distribution of electricity which undisputedly falls within the ambit of 'Commerce' or 'business'. Therefore appellant's argument that nobody is bearing the cost of IPDS scheme does not hold water as there is no stipulation to this effect in the notification. It is also no body's case that the cost of IPDS will not be considered while fixing the tariff of electricity to be supplied in future. Hence, this bench founds no anomaly in the decision and grounds relied upon by AAR. Order In the light of above discussion the Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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