2022 (6) TMI 1461 - AAR - GST

Scope of Advance Ruling - Service recipient, M/s. Jaipur Vidyut Vitran Nigam Limited is a Government Entity or not - clause (zfa) of para 2 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 32/2017 - Central Tax (Rate) dated 13.10.2017 - Operation and Maintenance of identified 33/11 KV Grid Sub-Stations to Jaipur Vidyut Vitran Nigam Limited are wholly exempt vide serial number 3 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 as amended or not - HELD THAT - The words or a Governmental authority or a Government Entity has been omitted at serial number 3, in column (3), in the heading Description of Services in the said Notification No. 12/2017- Central Tax (Rate) dated the 28th June, 2017 vide aforesaid Notification No. 16/2021-Central Tax (Rate) dated 18.11.2021 which resulted as withdrawn of exemption from tax from 01.01.2022. Thus, as on date there is no exemption is applicable on Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution. Hence, applicant is not eligible to avail the said exemption from tax. The scope of the ruling for Authority for Advance Ruling (AAR) is limited to the transactions being undertaken or proposed to be undertaken. In the instant case, the application seeking advance ruling was filed on 16.11.2021 before the RAAR with respect to supplies undertaken for the period from 01.11.2019 to 30.04.2021. Hence, the case is out of the purview of the Advance Ruling.

Summary

Issues Involved:
1. Whether the service recipient, M/s. Jaipur Vidyut Vitran Nigam Limited (JVVNL), qualifies as a "Government Entity" under the relevant GST notifications.
2. Whether the services provided by the Applicant (M/s. Sai Enterprises) to JVVNL are wholly exempt from tax under Serial Number 3 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017, as amended.

Detailed Analysis:

1. Whether JVVNL qualifies as a "Government Entity":

Applicant's Submission:
- M/s. Sai Enterprises is engaged in the operation and maintenance of electricity Grid Sub-Stations for JVVNL, a government undertaking involved in electricity distribution in Rajasthan.
- The Applicant argues that JVVNL qualifies as a "Government Entity" as defined under Notification No. 12/2017, as amended by Notification No. 32/2017. This is because JVVNL is wholly owned by the Rajasthan government and performs functions entrusted under Article 243G of the Constitution.
- The Applicant relies on the definition of "Government Entity" which includes entities with 90% or more participation by way of equity or control by the government, performing functions entrusted by the government.
- The Applicant also cites a similar ruling in the case of M/s. ARG Electricals Private Limited, where Ajmer Vidyut Vitran Nigam Limited (another Rajasthan government entity) was recognized as a "Government Entity."

Authority's Findings:
- The Authority confirms that JVVNL is a government entity as it is established by the Rajasthan government with 100% equity participation and performs functions under Article 243G of the Constitution.
- The Authority agrees with the jurisdictional officer's comment that JVVNL is considered a "Government Entity."

2. Whether the services provided by the Applicant to JVVNL are exempt from tax:

Applicant's Submission:
- The Applicant contends that the services provided to JVVNL are "pure services" and should be exempt from GST under Serial Number 3 of Notification No. 12/2017, as amended.
- The services include operational and maintenance duties at 33/11 KV Grid Sub-Stations, which the Applicant argues are pure services related to functions entrusted to a Panchayat under Article 243G.

Jurisdictional Officer's Comments:
- The officer notes that the scope of work includes both operational and maintenance services, with the contractor being responsible for any equipment damage or accidents, indicating it could be considered a "works contract service."
- The officer concludes that the services provided are not "pure services" and hence are not exempt under the mentioned notification.

Authority's Findings:
- The Authority reviews the work order and finds that the services include both operational and maintenance aspects, which could be classified as a "works contract service."
- The Authority notes the amendment brought by Notification No. 16/2021, which removes the exemption for services provided to a "Government Entity" from 01.01.2022.
- Since the application for advance ruling was filed after the expiry of the work order (filed on 16.11.2021, while the work order expired on 30.04.2021), the Authority finds that the application pertains to past transactions.

Conclusion:
- The Authority concludes that the application is out of the purview of the Advance Ruling as it pertains to past transactions, which is not within the scope defined under Section 95(a) of the CGST Act, 2017.
- No ruling is pronounced on the questions raised by the applicant due to the retrospective nature of the application.

Ruling:
As the question posed by the applicant relates to supplies undertaken prior to the date of filing the application for advance ruling, no ruling is pronounced under the provisions of the GST Act, 2017.