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TMI Blog2024 (6) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the supervising the whole work. In this case the ownership of the property being dislocated / shifted is vested with MVVNL, the MVVNL receives money in the form of dislocation / shutting charges. The services supplied in such cases is related to an act of tolerance with respect to such immovable property and hence covered under agreeing the obligation to refrain from an act, or to tolerate an act or a situation , or to do an act and are classified under SAC 999794 - The work contract services in the present case is being supplied by an independent contractor and is covered under SAC 9954, it is distinct service which is being supplied by a registered person other than MVVNL. In the facts and circumstances, where the value of materials and cost of execution of work for installation of electric lines are borne by the recipient of service and the applicant charges supervision fees only, the value of materials and cost of installation shall not be included in the value of supply for determination of taxable value under GST and the applicant shall be liable to pay GST only on the supervision charges. - SHRI AMIT KUMAR AND SHRI HARILAL PRAJAPATI, MEMBER Represented by : Shri Mani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Further, as per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant.. 6. The applicant has submitted that 6.1 We are of the opinion that GST would be applicable only on supervision fee charged by MVVNL for reasons as below: Section 7 (1) of the CGST Act, 2017 defines supply as Supply includes all forms of supply of goods or services or both, such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business . Section 2 (31) of CGST Act, 2017 defines 'Consideration' as Consideration means 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 . Section 15 of CGST Act 2017 reads as under: 15. Value of Taxable Supply- (1) The value of a supply of goods or services or both shall be the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a third party works contractor and hence Discom is a stranger to this contract. 6.7 In a case where the third party works contractor remains unpaid for the services supplied by him, he can sue only the customer and not the Discom. So, there is no liability to pay on the part of MVVNL. 6.8 As the construction or dislocation work is not made on the behest of MVVNL and 1 there is only a consent or tolerance for such shifting hence the Discom is not liable to pay for the expenses incurred in such shifting. 6.9 Since there is no obligation to pay on part of Discom hence the provisions of section 15 (2) (b) of CGST Act, 2017 are not applicable in this case. 6.10 Further section 2(52) of CGST Act defines Goods as: Goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply . In the view of the above definition, we are of the opinion that the assets created in this case by the Discom is a Power Line and being an immovable property does not fall under the definition of goods as mentioned in the CGST A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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- There are two methods of installing a line-one in which the entire work with material and installation is arranged by MVVNL on behalf of the customer and is carried under supervision of MVVNL. In such case GST is to be paid on the entire value (including reimbursement) and the same is not disputed by the applicant. In the second mode the entire work with material is arranged by the customers and installation work is done by the contractors hired by the customers. In this case the role of the MVVNL is limited to supervision only for which it charges supervision fee. The supervision fee is charged @15% on the cost of material. The question of the applicant is - (a) GST would be applicable only on supervision fee; or (b) GST would be applicable on entire amount including material and labour. 12. The Applicant is Electricity Distribution Company. Being expert in the area, Electricity Lines are installed in their supervision where electricity lines needs to be installed, to supply the electricity at the designated lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he services supplied by him, he can sue only the customer and not the MVVNL. So, there is no liability to pay on the part of MVVNL. 21. As the construction or dislocation work is not made on the behest of MVVNL and there is only a consent or tolerance for such shifting hence the MVVNL is not liable to pay for the expenses incurred in such shifting. Since there is no obligation to pay on part of MVVNL hence the provisions of section 15 (2) (b) of CGST Act, 2017 are not applicable in this case. 22. In this case the consideration for works contract services is fully paid by concerned party and there is no shared / part payment by the same. In such cases it is not feasible for having two considerations for a single supply. 23. Accordingly, we are of the view that in the facts and circumstances, where the value of materials and cost of execution of work for installation of electric lines are borne by the recipient of service and the applicant charges supervision fees only, the value of materials and cost of installation shall not be included in the value of supply for determination of taxable value under GST and the applicant shall be liable to pay GST only on the supervision charges. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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