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TMI Blog2020 (12) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... l power house, tail race, civil works of the switch yard access roads and other allied works, fabrication and erection of Steel liners and specials from tunnel portal to powerhouse trash rack, intake gate, draft tube gate and Hoisting arrangements. The appellant had filed an application for advance ruling under Section 97(1) of the GST Act, 2017 with regard to:- a. Whether the execution of Civil works of the Pazhassi Sagar Small Hydro Electric project as per the above Work Order would fall under Sl No. 3(iii)(b)or 3(vi) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 attracting GST@12%. b. Since the CGST statutory provisions are pari materia with State GST provisions, whether the rate of SGST is also 6% in terms of Notification SRO 370/2017 dated 30.06.2017 for supplies covered under Work Order 06/CE CCN/2017-18 dated 06.10.2017. 3. The said application was disposed by the Kerala Advance Ruling Authority vide Order No. KER/64/2019 dated 12/10/2019 = 2019 (11) TMI 283 - AUTHORITY FOR ADVANCE RULING, KERALA by pronouncing the Advance Ruling as follows: 1. No, the rate of 6% under S1. No. 3(iii) or S1. No. 3(vi) of the Notification No. 11/2017-Central Tax (Rate) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the GST Act, 2017 with interalia following contentions; 4.1. The supply of service awarded by KSEB attracts tax @12% (6% CGST + 6% SGST). a. Supply must be a works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017; 4.2. Conditions to be fulfilled to. avail the rate of 12% (6% CGST + 6% SGST) in terms of the Sl. No. 3(vi) of the notification no: 11/2017-CT (rate) are as follows; a. Supply must be a works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax Act, 2017; b. Supplies are to be provided to the Central Government, State Government, Union Territory, a local authority, a Governmental Authority or a Government Entity; c. Supply 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. 4.3. The work order established that the supplies are works contract supplies as defined in Section 2(119) of the CGST Act. Therefore above condition (a) is fulfille ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2018. 4.12. Applicant had received the certified impugned order KER/64/2019 dated 12.10.2019 on 29.11.2019 = 2019 (11) TMI 283 - AUTHORITY FOR ADVANCE RULING, KERALA. Before that, they had received the copy through e-Mail on 04.11.2019. 4.13. The appellant has also submitted that -- a. The submissions made on 30.09.2019 were not considered and discussed in the impugned order. Therefore, the impugned order is not a speaking order. b. The submissions made on 30.09.2019 and the evidences relied on would establish that the applicant is entitled for the exemption in Sl.No.3(iii) and 3(vi) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 and SRO.No.370/2017 dated 30.06.2017. c. The impugned order is against the principles laid down in 25th GST Council's decisions. PERSONAL HEARING: 5. Shri. S Durairaj, Advocate, the authorized representative of the appellant was heard by the Appellate authority further on 15.10.2020 via virtual media, at the office of the Chief Commissioner, Central GST, Cochin. During the personal hearing, the authorized representative reiterated the aforesaid contentions made in the grounds of appeal. DISCUSSION & FINDINGS: 6. We have carefully g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); (b) canal, dam or other irrigation works; (c) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal. 6 Provided that where the services are supplied to 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 local authority, as the case may be; 7.2. S1. No. 3(vi) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 reads as follows; Sl.No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition 1 2 3 4 5 Heading 9954 (Construction Service) (vi) Composite supply of works contract as defined in clause (119) of section 2 of the Central Goods and Services Tax 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alteration of a civil structure or any other original works meant pre-dominantly for use other than for commerce. industry, or any other business or profession. 9. There is no dispute that the Contract entered into by the appellant squarely falls under the definition of "Works contract" as provided u/s 2(119) of the SGST/CSGT Act. As per the said sub-section "Works contract" means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property, wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. As per the relevant work order, the work involves construction of intake structure, leading channel, tunnel power house, tail race, civil works of the switch yard access roads and other allied works, fabrication and erection of Steel liners and specials from tunnel portal to powerhouse trash rack, intake gate, draft tube gate and Hoisting arrangements. Accordingly, the works entrusted involves construction and transfer of property in goods and the property in goods c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erala State Electricity Board continued as transmission utility and distribution licensee till 24.09.2008 as per provisions of Section 1 72 (a) of the Electricity Act, 2003. 10.5. Later, the Government of Kerala in exercise of powers conferred under Section 131 of the Electricity Act, 2003 issued Notification GO (Ms).37/2008/PD dated 25.09.2008 vesting all functions, properties, interest, rights, obligations and liabilities of Kerala State Electricity Board with the State Government till re-vested in a corporate entity. 10.6. Consequent to the incorporation of the Kerala State Electricity Board Ltd. under the Companies Act, 1956, the State Government notified the Kerala Electricity Second Transfer Scheme (Re-Vesting),2013 by GO (P)NO.46/2013/PD dated 31.01.2013 re-vesting all the assets, liabilities, rights and obligations of the erstwhile Kerala State Electricity Board, which were vested in the State Government by the first transfer scheme dated 25.05.2008, to Kerala State Electricity Board Ltd. 10.7. From the above discussion, it is evident that the Kerala State Electricity Board Ltd is incorporated under the Companies Act, 1956 with 90 per cent or more participation by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (119) of Section 2 of the GST Act, 2017 supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant pre-dominantly for use other than for commerce, industry, or any other business or profession. 11.2. The Kerala State Electricity Board as authorized by the Government vide the Electricity Act 2003 is involved in the selling of electricity to the consumers and are collecting charges for the same. The predominant activity of the KSEB is to supply electricity and works executed by the appellant is ancillary to this predominant activity. The definition of business provided under sub-clause (17) of section 2 of the SGST/CGST Act, is as follows:- (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance dated 25.09.2017 and the Work Order dated 06.10.2017, it is seen that the work awarded is in respect of civil works of a Small Hydro Electric Project in the existing dam of Pazhassi Irrigation Project and hence the same cannot be considered as civil work for canal, dam or other irrigation works, for to be eligible for concessional rate of tax under the above entry. Thereby, the condition mentioned in para 8.1(c) also is not fulfilled. 13. Having decided that the appellant has not fulfilled the conditions of the said notification No. 11/2017-Central Tax (rate) dated 28.06.2017 for concessional rate of CGST @ 6%, they are also held not eligible for concessional rate of SGST @ 6% in terms of Notification No. SRO 370/2017 dated 30.06.2017 since the State GST provisions are pari materia with CGST statutory provisions. 14. After having discussed the facts and legal position of the case in hand, we would determine the issues as details in para 6 (a), (b) & (c) of this order in seriatim as under. 14.1. The Kerala State Electricity Board Ltd falls under the category of a Government entity for the purpose of the said exemption. 14.2. The supply of services viz. execution of the civ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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