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TMI Blog2021 (6) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... ng power generation plants at different locations in the State of Chhattisgarh. The applicant is duly registered under GST holding GSTIN 22AADCC5772F1ZW at Circle 1, Raipur (C.G). The main raw material for generation of power is coal. A coal mines was allotted to company by the Ministry of Coal GOI for extraction of coal to be used in generation of power. The production in coal mines was commenced with effect from 01.12.2019. As the coal mines being situated in a forest area, hence as per Forest Act and notification issued in this regard vide No. F06-02/2014/10-2 read with Chhattisgarh Abhivahan (Vanopaj) Niyam, 2001, Rs. 15/- per ton is payable to the Forest Department for issuance of transit pass as clearance of the Coal which is called "Abhivahan Shulk." The amount payable to the Forest department is on per ton basis and transit pass was issued on per vehicle basis. A vehicle normally consists of 12 to 30 tonnes of coal, thus the per vehicle charges i.e. Abhivahan Shulk is normally less than Rs. 5000/- per transit bass. Considering the above CSPGCL is of the opinion that no GST is payable on the "Abhivahan Shulk" collected by the Government of Chhattisgarh, under the provision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e advance ruling is sought under this Act, shall be in respect of- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. Further 103 of CGST Act, 2017 stipulates about the ruling pronounced as under: - The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only - a. On the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling; b. On the concerned officer or the jurisdictional officer in respect of the applicant. Thus in view of the above section 103 of CGST Act, 2017, the ruling so sought by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding, - (1) renting of immovable property, and (2) services verified below- (i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers. Central Government, State Government, Union the territory or local territory. Any business entity located in taxable authority From the above stated provisions of law, it follows that when the services are supplied by the State government, CGST Act, 2017 has cast the onus upon the business entity receiving service / recipient of service as being liable for applicable tax under reverse charge basis. In the present case, as brought about by the applicant, the services are rendered by the Forest Deportment of the Slate of Chhattisgarh. Thus, in view of the above entry in the Notification issued for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intro-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rote as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column f5) of the said Table, namely:- TABLE SL.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 1. Chapter 99 Services by an entity registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) by way of charitable activities. Nil Nil 2. Chapter 99 Services by way of transfer of a going concern, as a whole or an independent part thereof Nil Nil 3. Chapter 99 Pure services (excluding works contract service o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union territory or local authority to another Central Government, State Government, Union territory or local authority ; Provided that nothing contained in this entry shall apply to services- (i) by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory; (ii) in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) of transport of goods or passengers. Nil Nil 9. Chapter 99 Services provided by Central Government, State Government, Union territory or a local authority where the consideration for such services does not exceed five thousand rupees : Provided that nothing contained in this entry shall apply to- (i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than the Central Government, State Government, Union territory; (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers : Provided further th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: Explanation.-For the purposes of this clause, the expression "governmental authority" means an authority or a board or any other body,- (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with ninety per cent, or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution; Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 was further amended by Notification No.32/2017-Central Tax (Rate) dated 13.10.2017 wherein it is mentioned as under: in paragraph 2, for clause (zf) the following shall be substituted, namely: - (zf) ''Governmental Authority" means an authority or a board or any other body, - (i) set up by an Act of Parliament or a State Legislature; or (i) established by any Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution. (v) (zfa) "Government Entity" means an authority or a board or any other body including a society, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for domestic, industrial and commercial purposes. 6. Public health, sanitation conservancy and solid waste- management. 7. Fire services. 8. Urban forestry, protection of the environment and promotion of ecological aspects. 9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. 10. Slum improvement and upgradation. 11. Urban poverty alleviation. 12. Provision of urban amenities and facilities such as parks. gardens, playgrounds. 13. Promotion of cultural, educational and aesthetic aspects. 14. Burials and burial grounds: cremations, cremations grounds: and electric crematoriums. 15. Cattle pounds; prevention of cruelty to animals. 16. Vital statistics including registration of births and deaths. 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. 18. Regulation of slaughter houses and tanneries. 4.8 The applicant is of the view that they are exempt from the liability of GST in terms of clause 4 and 5 of the Notification No. 12/2017 supra being in the nature of pure service and as the same is used for specific purpose of "Urban forestry, protection of the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity in relation to any function entrusted to a municipality under Article 243W of the Constitution. Article 243W of the Constitution reads as under:- "243W. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow - (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to - (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule." The word "Municipality" is defined in the Constitution in the definitions in Article 243P(e)A as "Municipality" means an institution of self-governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate asset which requires to be properly safeguarded for providing sustained benefits to the entire community. Diversion of forest land for any non-forest purpose should be subjected to the most careful examination by specialists from the standpoint of ecological, environmental and social costs and benefits. Projects, which involve diversion, should provide in their investment budgets, funds not only for prior regeneration/compensatory afforestation, but also for the development of social infrastructure in the area. Beneficiaries who are allowed mining and quarrying in forest land and in land covered by trees should be required to adopt cluster approach in mining and to repair and re-vegetate the area, after having used it, in accordance with the Government of India guidelines and established forestry practices. Rehabilitation of the mined areas should be done to ensure ecological restoration of the affected site. 4.12 As can be seen, 'Urban forestry, protection of the environment and promotion of ecological aspects' is a matter listed in the Twelfth Schedule supra and thus there exists a function of a Municipality in relation to the same. We have seen above that the Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om anyone for doing the said work. The said function of "Urban forestry, protection of the environment and promotion of ecological aspects" is by nature a sovereign function done for the general public /community at large. These are functions which are legislated to be performed by the state Government / Municipalities. Such functions are in the nature of performing works for the welfare of public at l9rge. 4.13 In the present case CSPGCL the applicant, a business entity while performing its business activity of mining of coal at an allotted coal mine situated in a Forest and subsequently while the said coal is moved from the Forest area to their place of business for the intended purpose of generation of power, it is mandated to obtain a permission for transit of the same in the form of a transit pass on payment of a scheduled fees. Such granting / obtaining of permission for movement of said Forest produce viz. coal from the Forest of Chhattisgarh, granted by the Forest Department of Chhattisgarh would not result in performing of the sovereign function discussed above. The sovereign function of 'Urban forestry, protection of the environment and promotion of ecological aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after a detailed analysis of various decisions of the Apex Court in the context of interpretation of exemption has held that - (I) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (ii) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the Revenue. In Commissioner of Central Excise, Trichy v. Rukmani Pakkwell Traders [(2004) 11 SCC 801 = 2004 (165) E.L.T. 481 (S.C.)], the Apex Court held : "It is settled law that exemption notifications have to be strictly construed. They must be interpreted on their own wording. Wordings of some other notification are of no benefit in construing a particular notification" In Hari Khemu Gawali v. Deputy Commissioner of Police, Bombay and Another [AIR 1956 SC 559], a Constitution Bench of the Apex Court observed as under: "It has been repeatedly said by this Court that it is not safe to pronounce on the provisions of one Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ministry of Coal, Government of India under clause (c) of sub-rule (2) of rule 7 and sub-rule (1) of rule 13 of Coal Mines (Special Provisions) Act, 2015, vide which Gore Palma Sector -11 Coal Mines located at Raigarh (Chhattisgarh) was allotted to the applicant M/s Chhattisgarh State Power Generation Company Limited (CSPGCL) along with the mining lease to be granted by the State Government of Chhattisgarh. The applicant was also given / transferred the statutory clearance/licenses, permits, permission, approvals or consents, relating to environment avearance, Forest Clearance issued by the Ministry of Environment and Forests. Government of India. The coal mined / raised in the said allotted mine located at Gore Palma, Raigarh was for the intended purpose of utilization at the End Use Plant viz. Marwa Thermal Power Plant located at Marwa, Janjgir Champa, Chhattisgarh having configuration / capacity of 2 x 500 MW. It is further evident from the letter no. 04-02/Coal Block/GP-111/221 dated 22.5.2020 by the applicant, available in public domain, addressed inter-alia to the Department of Forest, Government of Chhattisgarh citing reference to F.No. 8-91/2010-FC dated 18.4.2017 vide wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted by the Forest department. It is just for administrative convenience that vehicle wise Abhivahan permission shulk or transit fees are being paid by the applicant. Without prejudice to above, it is also observed on going through the contents at Sl.No. 9 of Notification no. 12/2017-Central/State Tax (Rate), dated 28-6-2017 claimed by the applicant, that the exclusion clause mentions that nothing contained in this entry shall be applicable for "transport of goods". It is worth notable that the said entry does not refer to "any service relating to transport of goods", rather it simply specifies only about non applicability of the said exemption in respect of "transport of goods". In the case in hand it is ultimately for the movement / transport of coal from the allotted coal block located in a Forest place to the Thermal Power Plant, permission is granted by the Forest Department of Chhattisgarh and for which the impugned "Abhivahan permission shulk" or transit fees is being paid by the applicant, as elaborately discussed in the preceding para. Thus in view of the above discussions, we come to the considered view that the applicant is not eligible for exemption as provided under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding services nowhere else classified) with the CGST rate of 9% [The corresponding entry in Notification No. 08/2017-Integrated Tax (Rates), dated 28-6-2017 having IGST rate of 18%]. This entry is the residuary entry which covers all other services which are not elsewhere specified. As discussed above, the Abhivahan permission shulk is not covered under Notification relating to "NIL" rate. Further, for ready reference the extract of Notification no. 13/2017-Central Tax (Rate) dated 28.6.2017 already discussed in the preceding para is once again reproduced below. Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017 Sl.No. Category of Supply of Services Supplier of service Recipient of Service 5 Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding, - (1) renting of immovable property, and (2) services specified below- (i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Government, State Government or Union territory or local authority; (ii) services in relation to an air ..... X X X X Extracts X X X X X X X X Extracts X X X X
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