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TMI Blog2022 (2) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... quity or control, to carry out a function entrusted by the State Government. There is also nothing on record that MPMKVVCL is set up by an Act of Parliament or State Legislature. As such, we hold that MPMKVVCL is not a Govt. entity - although there is no such mention on the website of MPPKVVCL it is all likelihood that the same is also presently not an establishment with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the State Government like MPMKVVCL. There is also nothing on record that MPPKVVCL is set up by an Act of Parliament or State Legislature. Further, the Chief Financial Officer, MPPKVVCL, Indore in his GST Circular-11 issued under F.No. MD/WZ/02/Tax/259/9425 dated 10.05.2018 has only given the definition of Government Entity and declared the Company as Government Entity without giving any criterion of the applicability of the said definition on the Company. As such, we hold that MPPKVVCL also is not a Govt. entity. Although it is accepted that rural electrification including distribution of electricity is covered in function entrusted to a Panchayat but we are of the view that the invoices issued to the Executive Engin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Constitution? And, whether this services i.e. taking reimbursement of expenses for deployed Manpower is NIL rated supply in GST? 3. The applicant have submitted statement of facts in Form GST ARA-01 as under- (i) the applicant is a Central Public Sector Enterprise under Ministry of Information Broadcasting and was established on 24th March, 1995 under the Companies Act, 2013 with 100% equity share capital held by Govt. of India. (ii) the applicant was awarded contract from Madhya Pradesh Paschim Keshetra Vidyut Vitaran Company Limited (Govt. Entity) for providing "skilled, semi-skilled and Unskilled" manpower for miscellaneous work under the three circles, AGAR, JHABUA & SHIVPURI. (iii) the applicant are deploying manpower to the government entity as under- SI.No. Name of party Division Constitution of party 1 Madhya Pradesh Paschim Keshetra Vidyut Vitaran Company Limited-O&M Circle-Agar Agar and Susner Rural Electrification or Distribution of Electricity 2 Madhya Pradesh Paschim Keshetra Vidyut Vitaran Company Limited-O&M Circle-Jhabua Jhabua, Alirajpur & STM Jhabua Rural Electrification or Distribution of Electricity 3 Madhya Pradesh Madhya Keshetra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployees (Rural) and BECIL Commission 3 Ex. En., MPPKVV Co Ltd, Susner BE/MP/18/21-22 19.06.2021 Cost of Skilled, Semi-skilled, unskilled employees (Urban) and BECIL Commission 4 Ex. En., MPPKVV Co Ltd, Jhabua BE/MP/23/21-22 19.06.2021 Cost of Skilled, Semi-skilled, unskilled employees (Rural) and BECIL Commission 5 Ex. En., MPPKVV Co Ltd, Jhabua BE/MP/24/21-22 19.06.2021 Cost of Skilled, Semi-skilled, unskilled employees (Urban) and BECIL Commission 6 Ex. En., MPPKVV Co Ltd, Alirajpur BE/MP/22/21-22 19.06.2021 Cost of Skilled, Semi-skilled, unskilled employees (Urban) and BECIL Commission 7 Ex. En., MPPKVV Co Ltd. Alirajpur BE/MP/21/21-22 19.06.2021 Cost of Skilled, Semi-skilled, unskilled employees (Rural) and BECIL Commission 8 Ex. En., MPPKVV Co Ltd, Jhabua BE/MP/25/21-22 19.06.2021 Cost of Semi-skilled, unskilled employees and BECIL Commission 9 GM (O&M), MPMKVV Co BE/MP/27/21-22 19.06.2021 Cost of Skilled, unskilled Ltd, Shivpuri employees (Urban) and BECIL Commission 10 GM (O&M), MPMKVV Co BE/MP/27/21-22 19.06.2021 Cost of Skilled, unskilled Ltd, Shivpuri employees (Rural) and BECIL Commission 5. As per declaratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant and observed that the applicant has ticked following issues on which advance ruling required- (ii) applicability of a notification issued under the provisions of the Act. As such, we find that the issue raised in the application is squarely covered under Section 97(2) of the CGST Act 2017. We therefore, admit the application for consideration on merits. 10. We have gone through the submissions made by the applicant and have examined the same. We observe that the applicant has sought advance ruling on the following questions- Whether we should charge GST @18% for taking reimbursement of expenses i.e., Basic Salary, ESIC, EPF, Bonus with service charge or only on service charge for providing pure service by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution? And, whether this services i.e., taking reimbursement of expenses for deployed Manpower is NIL rated supply in GST? 11. We find that Work Orders produced by the applicant is for supply of skilled, semi-skilled and unskilled manpower and the applicant is pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government, State Government, Union Territory or a local authority." 13.4 As per the website of MP Paschim Kshetra Vidyut Vitran Co. Ltd. (http://www.mpwz.co.in/#/about), the Government of Madhya Pradesh vide order dated July, 2002 has incorporated Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited as a wholly owned Government of Madhya Pradesh Corporations under the Companies Act, 1956 to undertake activities of distribution and retail supply for and on behalf of Madhya Pradesh State Electricity Board in the areas covered by the Commissioners of Indore and Ujjain. 13.5 As per the website of MP Madhya Kshetra Vidyut Vitran Co. Ltd (https://portal.mpcz.in/web/about-us/company-profile/), Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited (MPMKVVCL) was incorporated as a wholly owned Government Company on 31st May 2002, under the Companies Act 1956, the same has been notified vide order No. 5555/RS/4/13/2001 dated 1st July 2002 of the Government of Madhya Pradesh. The Company undertakes the activities of distribution and retail supply in the areas covered by the Commissioners of Bhopal, Hoshangabad, Gwalior, and Chambal. The Company obtained a certificate of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment of the rural area constituted under article 243B. As per Article 243B, there shall be constituted in every state, Panchayats at the village, intermediate and district levels. Article 243G of the Constitution of India entrusts powers, authority and responsibilities to the Panchayat. The Constitution of India endows the Panchayat with such powers and authority to enable them to function as institution of self-government. Also, it allows enactment of laws for the devolution of powers and responsibilities upon Panchayat subject to certain conditions with respect to the following: (a) the preparation of plans for economic development and social justice (b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule- The activities specified within the Eleventh Schedule are Agriculture, including agricultural extension; Land improvement, implementation of land reforms, land consolidation and soil conservation; Minor irrigation, water management and watershed development; Animal husbandry, dairying and poultry; Fisheries; Social forestry and farm forestry; Minor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply" 14.2 Thus, the above definition of 'consideration' includes any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government. It also includes the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government. As such, the consideration would include the entire payment received by the applicant against manpower supply and GST would be payable on the entire amount collected by the applicant from the service recipients which includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplier has been reversed by the recipient of the supply." 15.2 On going through the above, it can be seen that Section 15(1) clearly stipulates that the value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. Further, sub-section (2) of Section 15 elaborates in detail, the items that are required to be included in the value of supply, whereas sub-section (3) of Section 15 specifically elaborates the items that are not to be included in the value of supply. 15.3 As per Section 15 of the CGST Act, 2017, there is intent to include even all taxes, duties, cesses, fees and all charges in the value of supply and there can be no exception for ESI and EPF amount. Therefore, taking into the view the definition of 'consideration' and the aspect of 'valuation of supply' as discussed above, it is apparent that the GST is chargeable on the entire amount received by the applicant against supply of manpower. 16. In view of the above discussions, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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