TMI Blog2023 (1) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... the MOA, one of the Objects incidental to attainment of the main objects, provide NPCIL to acquire apartments as seen expedient, necessary or convenient to the Company for the purposes of its main object/business. The condition that the services so procured by the Government entity, in this case, NPCIL, is in relation to the work entrusted to it and therefore, the appellant are/were eligible for the concessional rate of tax @6% of CGST plus 6%of SGST as per entry 3(vi) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 (as amended) read with the corresponding Notification under TNGSTA for the period upto 31.12.2021. - AAAR/09/2022 (AR) A.R. Appeal No. 03/2022/AAAR - - - Dated:- 15-11-2022 - THIRU. MANDALIKA SRINIVAS, AND THIRU. DHEERAJ KUMAR, MEMBER Represented by : Ms. Natasha Jhaver, CA Tamil Nadu Goods and Services Tax Act, 2017) Preamble 1. In terms of Section 102 of the Central Goods Services Tax Act 2017/Tamil Nadu Goods Services Tax Act 2017 ( the Act , in Short), this Order may be amended by the Appellate authority so as to rectify any error apparent on the face of the record, if such error is noticed by the Appellate authority on its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in execution of civil engineering and other general construction contracts for various Government departments and organizations. The parties SOM Projects private limited and M/s Varindera Constructions Limited had entered into joint venture under the name SOM VCL(JV) solely for carrying out the works contract service for Kudankulam Nuclear Power project, a unit of Nuclear Power Corporation of India Ltd (NPCIL) at their site Anuvijay Township, Kudankulam, Radhapuram Taluk, Tirunelveli, Tamilnadu. The appellant stated that they were awarded a project by NPCIL, a Government entity for carrying construction of 360nos (D-type 240Nos, D-special 80 Nos and E-type 40 Nos) residential quarters (9 blocks of G+10 floors) for residential usage of their employees at Anuvijay Township. The Appellant had filed an application before Hon'ble Authority for Advance Ruling, seeking clarification on the following questions:- 1. Whether the execution of works contract service at Kudankulam Nuclear Power Project would be covered under S.No vi (or) vii of Notification No.24/2017 dated 21.09.2017 attracting GST@12% or 18%; and 2. The assessee had already charged GST @12% on its invoices for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question was on procedural aspects and not within the ambit of AAR. (iii) In para 7.2 to 7.4 of the impugned order, the AAR has framed three issues, which requires to be satisfied, to decide whether the GST rate under S.No. 3 (vi) of Notification 11/2017 C.T. (Rate) could be claimed or not and held that out of the said 3 conditions, first two conditions were satisfied in this case and proceeded to examine the third condition, whether the subject work was in relation to any work entrusted to the government entity, by the Government. (iv) In para 7.5 of the impugned order, the AAR had observed that in the instant case, the work of construction of residential quarters was awarded to the appellant by NPCIL. It was further held that the entity procuring such work is KKNPP and the work of construction of the Residential quarters for the employees of KKNPP was not a work in relation to the work entrusted to KKNPP as envisaged in the proviso to entry 3(vi) of the Notification No. 11/2017 CT (Rate) dated 28.06.2017. The AAR had observed that as the work of the construction of residential quarters was a welfare measure done by KKNPP for their employees, this cannot be construed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power plant, for smooth functioning of the nuclear power plant. Hence, it is clear that the construction of residential quarters by NPCIL is in relation to its main activity of construction of atomic power plants and generation of electricity, a function entrusted to NPCIL by the Government. (ix) The appellant had submitted a copy of the Memorandum of Association of NPCIL, from which the broad objectives of forming NPCIL could be observed. As per Section 3 of the Atomic Energy Act, 1962, the Central Government was having wide powers which could be exercised cither by the Central Government directly or through a corporation, Government Company or authority established by it. It was in pursuance of such powers NPCIL was formed and the activity of construction of residential quarters was directly in relation to fulfilling the obligations entrusted to NPCIL, by the Central Government, under Section 3 of the above said Act. They had stated that the word in relation to had a very wide connotation and would include direct as well as indirect nexus with the subject matter. In the instant case the construction of the residential quarters for the exclusive use of the employees in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to set aside/modify the ruling passed by the AAR and hold that they are entitled to avail the CGST rate of 6% as per Sl.No. 3(vi) of Notification No. ll/2017-C.T.(Rate) dated 28.06.2017 and equivalent SGST rate. Thus, the appellant is before us seeking modification on the ruling pertaining to Q.No. 1 raised by them before the AAR and the same is taken up for consideration. 7. The appellant was awarded the project for construction of 360 nos of (D-type Nos., D-special-80 Nos and E-type-40 nos) residential quarters (9 blocks of G+10 floors) for residential usage at Anuvijay Township, Kudankulam. The appellant has sought clarification on the applicability of the concessional rate of Tax of 12% GST as per the entry si. No. 3(vi) of Notification No. 11/2017-C.T.(Rate) as amended. The relevant entry for ease of reference is as under: [[(vi) [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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal filed before us. The appellant, further had furnished a letter from NPCIL in No. NPCIL/KKNPP/C TS/D/2022 dated July 21, 2022, pursuant to the personal hearing before us. 8. On perusal of the MOA furnished along with the appeal application, it is seen that the Main Objects to be pursued by NPCIL is 'Development of Nuclear Power; Protection of the Environment; Manufacturing, trading and the Objects incidental or ancillary to attainment of the main objects are Coordination and control; As a helper and servicing agency for the subsidiaries; To obtain charters, concessions, etc, Borrowing Powers; To acquire and lease property, To provide for welfare of employees, etc... Under the clause 'To acquire and lease property', it was further mentioned that 'To acquire by purchase, lease, exchange, hire or apartments, plant, machinery and hereditaments of any nature or description situated in India or any other part and turn the same to account in any manner as may seem expedient, necessary or convenient to the Company for tire purposes of its business', further, from the letter furnished by the appellant subsequent to the Personal hearing before this authority, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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