TaxTMI 
TaxTMI 
2021 (6) TMI 1131
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....ngaged in the generation of electricity having 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 Gover....
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....ion 97(2) of CGST Act, 2017 stipulates that:- The question, on which the 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 ....
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....ed in column (4) of the said Table:- TABLE SI.No. Category of Supply of Services Supplier of service Recipient of Service (1) (2) (3) (4) 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 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....
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....stitutionally valid. 4.3 Now coming to the merits of the case it is seen that the relevant clauses of Notification No. 12/2017-CT(R) dated 28-06-2017, read as under:- In exercise of the powers conferred by sub-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 A....
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....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; and (b) services by way of renting of immovable property. Nil Nil 8. Chapter 99 Services provided by the Central Government, State Government, 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 thi....
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....oard constituted under article 371 of Inc Constitution: or (g) a Regional Council constituted under article 371A of the Constitution: (iv) As per clause (zf) of paragraph-2 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, "governmental authority" has the same meaning as assigned to it in the explanation to clause (16) of section 2 of the Integrated Goods and Services Act, 2017 (13 of 2017). Clause (16) of section 2 of the integrated Goods and Services Act, 2017 (13 of 2017) reads as 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 fol....
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....tural activities. 22. Markets and fairs. 23. Health and sanitation, including hospitals, primary health centres and dispensaries. 24. Family welfare. 25. Women and child development. 26. Social welfare, including welfare of the handicapped and mentally retarded. 27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes. 28. Public distribution system. 29. Maintenance of community assets. 4.7 The functions entrusted to the municipalities under 243W of the Constitution of India are reproduced hereunder: 1. Urban planning including town planning. 2. Regulation of land-use and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply 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 handi....
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....cted forest after having been permitted for the some. Also Forest Act, 1927 is comprehensive statute relating to transit of forest produce and for the duty leviable or timber and other forest produce. 4.10 The applicant is of the opinion that the aforesaid service falls under entry 4 of Notification No. 12/2017-Central/State Tax (Rate), dated 28-6-2017, and the text of the relevant entry is reproduced hereunder - SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Service Rate (per cent.) [CGST + MGST = IGST] Condition 4 Chapter 99 Services by Central Government, State Government, Union territory, local authority or governmental authority by way of any activity in relation to any function entrusted to a municipality under Article 243W of the Constitution Nil Nil The entry covers services provided by State Government, however it has been specifically mentioned that the service has to be by way of any activity 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, t....
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....ens, playgrounds. 13. Promotion of cultural, educational and aesthetic aspects. 14. Burials and burial grounds; cremations, cremation 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. 4.11 It would also be opportune to mention here that as per the National Forest Policy, 1988 issued by the Ministry of Environment & Forest, one of the basic objectives of the State is to "encourage efficient utilization of forest produce and maximizing substitution of wood" and the principal aim of Forest policy must be to ensure environmental stability and maintenance of ecological balance including atmospheric equilibrium, which are vital for sustenance of all life forms, human, animal and plant. It is also noteworthy that Forest land or land with tree cover should not be treated merely as a resource readily available to be utilized for various projects and programmes, but as a state asset which....
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....purpose of utilization at the applicant's end use plant viz. Marwa Thermal Power Plant located at Marwa, Janjgir Champa, Chhattisgarh having configuration / capacity of 2 x 500 MW. Thus, the applicant CSPGCL is inter alia engaged in the business of generation of power whereas Forest department of the State of Chhattisgarh is inter-alia engaged in ensuring the environmental stability and maintenance of ecological balance. For generation of power, the applicant has been allotted coal blocks and consequent to mining / raising of coal at the coal block supra located in the forest, this coal is required to be moved from forest to their place of business viz. Thermal power plant and for this movement of coal from the forest, a permission is granted by the Forest Department of Chhattisgarh and a transit fee is being paid by the applicant for the transit pass issued in this regard by the said Forest Department of Chhattisgarh. Whereas, the functions in relation to "Urban forestry, protection of the environment and promotion of ecological aspects" as entrusted by the Constitution does not entitle the Municipality, as the one performing the function, to receive any charges from anyone....
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.... precincts of a port or an airport: (c) transport of goods or passengers; or (d) any service, other than services covered under entries (a) to (c) above, provided to business entities. Nil Nil There is no ambiguity as regards the fact that CSPGCL, the applicant is definitely a business entity. Thus from the above entry at sr. no. 6 of Notification no. 12/2017-Central/State Tax (Rate), dated 28-6-2017, it becomes very evident that if any services, including the three services excluded in clauses (a) to (c) above, are provided by the Central Government, State Government or local authority to any business entity, they would not be eligible for Nil rate of GST provided above. 4.15 It is also seen that the Constitution Bench of the Hon'ble Supreme Court in the case of Commissioner of Customs (Import) Mumbai v. M/s. Dilip Kumar And Co. & Others in C.A. No. 3327 of 2007 [ 2018 (361) E.L.T. 577 (S.C.)), has dealt with the question - What is the interpretative rule to be applied while interpreting a tax exemption provision/notification, when there is an ambiguity as to its applicability with reference to the entitlement of the assessee or the rate of tax to be app....
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.... the Notification No 12/2017 supra. 5.1 Before addressing the aforesaid contention of the applicant, it is seen that the instant Coal block at Gore Pelema Sector-I (Chhattisgarh) was allocated to an initial allottee by the Ministry of Coal, Government of India. Hon'ble Supreme Court vide ii order dated 24.9.2014 read with its Judgment dated 25.8.2014 cancelled the allocation of all the coal blocks allocated for captive use to different parties including the said initial allottee, ordering therein that all the prior allottees be allowed to carry out mining only till 31st March 2015 and thereafter to handover the coal block to Ministry of Coal / to the successful bidder, if any. The old allocates were also asked to pay Rs. 295/- per ton as penalty / levy on the whole quantity of coal mined out since the commencement of coal till 31st March 2015. In compliance to the above said judgment by Hon'ble Apex court, the initial allottee handed over the mine to the new allottee viz. the CSPGCL, the applicant, who was the successful bidder of the de-allocated Coal block. It is in this backdrop that the applicant was issued allotment order no. 103/23/2015/NA dated 14.9.2015, ref....
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....list of exempted services, therefore the applicant is liable to pay GST at the applicable rate, to be treated as "other services". The applicant's contention that each transaction is a separate transaction and Abhivahan Shulk charged is always less than Rs 5000/- per transaction and is not covered by the definition of continuous supply of service u/s 2(33) of the CGST Act 2017, hence exempt under sl.No. No 9 of the Notification No 12/2017 is not tenable, in as much as, the coal block has been allocated by virtue of the above cited allotment order dated 14.9.2015 for generation of power at their Marwa Thermal power plant and consequent to mining of coal from the coal blocks supra, this coal mined are moved from Forest to their place of business and for this movement of coal a permission is granted by the Forest department of the Chhattisgarh Government and a transit fee is being paid by the applicant for the transit pass issued in this regard by the said Forest department of Chhattisgarh. This is not a one of transaction as misconstrued by the applicant; rather it's a supply of the entire coal mined at the allotted said coal block regularly to their power plants from the sai....
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....28-6-2017, states that Services by the Central Government, State Government, Union territory or local authority excluding the following services - (a)....... (b)...... (c)....... (d)....... any service, other than services covered under entries (a) to (c) above, provided to business entities are to be taxed al 'NIL' rates Abhivahan permission shulk does not fall under exclusion clauses (a) to (c) and hence they are to be treated as any service other than (a) to (c) provided to a business entity as per clause (d) mentioned therein. There is no doubt as regards the fact that CSPGCL, the applicant is a business entity and from the said entry at sr. no. 6 of Notification no. 12/2017-Central/State Tax (Rate), dated 28-6-2017, it becomes very evident that if any services, including the three services excluded in clauses (a) to (c), are provided by the Central Government, State Government or local authority to any business entity, they would not be eligible for Nil rate of GST provided therein. Accordingly, the Heading Number 9997 at Entry Serial No. 35 of Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 reads - Other services (washing, cleaning and dyeing services:....