Applicant Denied NIL GST Benefit; 18% Tax Rate Applicable

The Authority ruled that the applicant is not entitled to the benefit of NIL rate of GST under SI No 10A of Notification No. 12/2017-Central Tax (Rate) for the works executed. The applicable tax rate is 18% for the services provided by the applicant. Queries regarding Input Tax Credit entitlement and refund process were deemed irrelevant due to the exemption's inapplicability.

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Issues Involved:
1. Eligibility for GST exemption for services supplied by the applicant to APSPDCL.
2. Applicability of GST exemption to both supply of material and services.
3. Entitlement to Input Tax Credit (ITC) on inward supplies.
4. Process for refund of ITC if entitled to exemption.

Issue-wise Detailed Analysis:

1. Eligibility for GST Exemption for Services Supplied by the Applicant to APSPDCL:
The applicant sought clarification on whether the benefit of GST exemption under SI.No. 10A of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, as amended by Notification No. 14/2018-Central Tax (Rate), dated 26.07.2018, applies to their works executed for APSPDCL. The Authority examined the nature of the works, which involve the conversion of existing LT Net Work into High Voltage Distribution System under various funding schemes. These works are classified as "works contract" under clause (119) of Section 2 of the CGST Act, 2017 and APGST Act, 2017, and treated as supply of service under Serial No.6, Schedule II of the Acts. The Authority concluded that the exemption under SI.No. 10A, which applies to services supplied by Electricity Distribution Utilities, does not extend to services supplied to these utilities. Therefore, the exemption is not applicable to the applicant's services, and the applicable rate of tax is 18% (9% CGST + 9% SGST).

2. Applicability of GST Exemption to Both Supply of Material and Services:
The applicant queried whether the exemption under SI.No. 10A extends to both supply of material and services or is limited only to services. The Authority clarified that since the works are classified as a "works contract service," segregation or vivisection of material and services does not arise. However, as the exemption is not applicable to the works contract, this query becomes irrelevant.

3. Entitlement to Input Tax Credit (ITC) on Inward Supplies:
The applicant questioned whether they are entitled to claim ITC on inward supplies of material and services used in the execution of works for APSPDCL if they are entitled to the GST exemption. The Authority stated that since the exemption is not applicable, the query about ITC entitlement is irrelevant.

4. Process for Refund of ITC if Entitled to Exemption:
The applicant sought clarification on the process for obtaining a refund of ITC if they are entitled to the GST exemption. The Authority reiterated that since the exemption is not applicable, the query regarding the refund of ITC is also irrelevant.

Ruling:
The Authority ruled that the applicant is not entitled to the benefit of NIL rate of GST under SI No 10A of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017, as amended by Notification No. 14/2018-Central Tax (Rate), dated 26.07.2018, for the stated works executed. The applicable rate of tax is 18% (9% CGST + 9% SGST) for the services referred by the applicant. The supplementary queries on ITC entitlement and refund process are answered as irrelevant due to the inapplicability of the exemption.

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