TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 58
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....ess, for General Civil Work Package of 2*660 MW Shri Singaji Thermal Power Project Stage-II, near village Dongalia, distt. Khandwa (MP) India (Tender Spn. No. MPPGCL/CIVIL ENGINEERING/SSTPP-I/CB/01) (Online Tender Spn. No. 3497). The applicant company filled the tender and the same was allotted to it by MPPGCL, as per the scope of work mentioned below: Scope of Work:- Construction of building and structure for colony at village Siveria on lumpsum turnkey basis, which includes approximately 599 staff quarters for plant personnel, all internal connecting roads and drains, necessary geotechnical investigations, complete site clearance & site developmet work, complete water supply system, overhead tanks & underground sump, complete sanitary & sewage works system including Sewage treatment plant, rain water harvesting system, complete electrification system, etc. The contractor shall carry out all other miscellaneous work that will be necessary for completing this package on turnkey basis. 1.4. That, during the course of carrying out the construction work, the applicant company raised Running Bills (RA bills) for the portion of work completed at a point of time. To MPPGCL by charging ....
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....overnment entity', MPPGCL submitted its nature of constitution as under: a. That, MPPGCL is a wholly owned company of MP Government engaged in generation of electricity in the state of Madhya Pradesh. It is a successor entity of erstwhile Madhya Pradesh State Electricity Board (MPSEB). b. The Company has been incorporated as a part of the implementation of the power sector reform in Madhya Pradesh initiated by the Government of Madhya Pradesh. c. The Company has taken over the Generation activities of MPSEB. d. The Company is a public company fully owned by Govt. of M.P e. The Company was incorporated on 22.11.2001. f. The Company obtained the Certificate of Commencement of Business on 16-07-2002. g. The Registered office of the Company is at Shakti-Bhawan, Rampur, Jabalpur h. The Authorized Capital of the Company at present is Rs. 10,000 Cr. (Ten Thousand Crore) divided into 10,000,00,000 Shares of Rs. 100 each. i. The issued, subscribed and paid up capital is Rs. 5325,54,68,800 (Rs. Five Thousand Three Hundred Twenty Five Crores Fifty Four Lacs Sixty Eight Thousand Eight Hundred only) divided into 5,3255,4,688 shares of Rs. 100 each. j. The Govt. of MP vide Gazett N....
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....he work procured by it from the MP state government, whose work contract for construction was then allotted to the applicant company. 1.11. On the ground as stated supra in para 7, 8 & 9, MPPGCL construed that: That, MPPGCL is a "government entity", And the service supplied to it is a service procured by it from the state government. Therefore, it is squarely covered under entry 3(vi)(c) Chapter 99, heading 9954 of the Notification no. 11/2017 dated 28.06.2017 amended from time to time and the applicable rate of GST for such supply made to it is 12% (6+6), and applicant company is not correct in charging the GST rate at 18% (9+9) 1.12. The applicant company is of the view that, supply in the impugned, is not covered under entry 3(vi)(c) of Notification no.11/2017Central Tax (rate) dated 28.06.2017 Chapter 99 Section 5 Heading 9954, as entry 3(vi)(c) prescribes the applicable rate of GST on construction services at 12%, on fulfilment of the following condition: "Composite supply of works contract as defined in clause(119) of section 2 of the CGST Act, 2017 provided to the Central government, State government; or a local authority or government authority or a government entity b....
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....39;Government Entity'?; 2. If yes, whether the work contract service of construction of 599 residential quarters allotted to the Applicant company under the tender, will be charged under the GST rate of 12% (6+6) [as per entry 3(vi)(c)] or 18% (9+9) [under entry 3(ii)]; 3. Or otherwise if the works contract service is not covered under entry 3(vi)(c), in the facts and circumstances of the Applicant company, then what is the applicable rate of GST? 3. DEAPRTMENT'S VIEW POINT: The CGST & Central Excise Commisionerate, Jabalpur has furnished its opinion vide letter C.No.GST/Party/lsssues/HQRS-JBP/2017-18 dtd. 05.09.2018 of the Joint Commissioner, CGST & Central Excise, Jabalpur. It has been opined that MPPGCL fulfils the conditions laid down in the definition of 'Government Entity' as defined in terms of Notification No.31/20107-Central Tax (Rate) dtd.13.10.2017, and accordingly it would be a 'Government Entity' for the purpose of CGST Act 2017. However, in respect of the service impugned in the Application, it has been opined that '.... Composite work contract service of 599 residential quarters proposed to be provided by the applicant to M....
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....et up by an Act of Parliament or State Legislature; or ii) established by any Government, with 90per cent, or more participation by way of eguity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority." 5.4. We find in the Application itself that MPPGCL has been established by the Government of Madhya Pradesh and the Government of Madhya Pradesh has a 100% shareholding in the company. The State Government is also exercising full control over the activities of the said company. Needless to say that in the given circumstances M/s MPPGCL qualifies to be called and termed as a 'Government Entity' for the purpose of GST law, as it fulfils the necessary and sufficient conditions laid down under notification supra. 5.5. Now, the said Government Entity i.e. MPPGCL has been entrusted with the work of power generation in the State of Madhya Pradesh. Though we do not have details of work entrusted by the State Government to MPPGCL, on the basis of facts brought on record through the present application, we safely conclude that the essential and sole work entrusted to MPPGCL by the Government of Madhya Pradesh i....