TaxTMI 
TaxTMI 
2023 (6) TMI 1298
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.... 2. Whether GST is to be paid to MVVNL on the full amount of work done for shifting the transmission lines by NHAI? 3. Without prejudice to the submissions made hereinabove and hereinafter, if the NHAI pays GST on the entire value of work done to its contractors and also to MVVNL, then how will this payment of same amount of GST on the same transaction to two separate entities, not constitute double taxation? 3. 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. The applicant has submitted that- 3.1 That the applicant is currently doing the work of widening of National Highway no. 30 from Sitarganj to Bareilly, for which the existing electric poles are to be shifted from one place to another. These power lines are required to be shifted to keep the electrical clearances safe as per the Indian Electricity Rules 1956. 3.2 That for the purpose of highway modification, the existing transmission lines throughout the highway are required to be shifted/ raised for safe clearances. 3.3 That the shifting/ modificati....
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....de the required purchases and has completed the work according to the specification of MVVNL. The NHAI also deducts and deposits TDS on payments made to contractors. 3.10 That MVVNL is demanding 18% GST on the work done because as per MVVNL, it is an asset transfer from NHAI to MVVNL and in this regard it is submitted that prior to and even after the shifting/modification, the transmission line belongs to MVVNL. That it is pertinent to mention here that the ownership and operational control of the transmission lines remains with MVVNL and are not at all transferred in any form to NHAI. The NHAI is only concerned with the shifting of these transmission lines from one place to another for obtaining safe clearances and that too is done under the expert supervision of MVVNL. The entire shifting work is done by the contractors of NHAI and the NHAI duly deducts and deposits TDS on payments made to contractors. The MVVNL only supervises the shifting work and for this supervision charges are paid to MVVNL along with GST. The only service for which MVVNL is liable to get payment along with GST is supervision charges which have been already paid to MVVNL. 4. Statement of relevant facts....
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.... and shut down charges along with GST to MVVNL. 4.9 That the estimated value (Deposit Work) is for the purpose of calculating the supervision charges which is to be paid by NHAI to MVVNL. 4.10 That MVVNL has issued a demand notice to NHAI asking for 18% of GST on the Deposit work which was solely done by the contractor appointed by NHAI under the supervision of MVVNL according to the cost estimate provided by MVVNL. As stated hereunder,- "It shall be ensured that asset/ infrastructure built by intending agency/ consumer shall have to be transferred to MVVNL. Any expenditure or taxes incurred or to be incurred on such transfers shall be borne by intending agency/ consumer." 4.11 That it is pertinent to mention here that the entire shifting work is done by the contractors of intending agency/ applicant (NHAI), who purchases the material required for shifting/ modification of the transmission lines as per the technical specifications of MVVNL. 4.12 That the contractor who has made purchases of the material for shifting of transmission lines, has claimed I.T.C. on the same, has done the work of shifting I modification which includes cost of dismantling the existing....
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.... MVVNL, which is a supply leviable to GST. 5. The applicant has submitted their interpretation of law as under- 1. That the term, "supply" has been inclusively defined in the Act. The meaning and scope of supply under GST can be understood in terms of following six parameters, which can be adopted to characterize a transaction as supply:- a. Supply of goods or services. Supply of anything other than goods or services does not attract GST b. Supply should be made for a consideration c. Supply should be made in the course or furtherance of business d. Supply should be made by a taxable person e. Supply should be a taxable supply f. Supply should be made within the taxable territory 2. That the main parameter of supply is that there must be some consideration and transfer of ownership involved for a transaction to be treated as a supply. In the instant case, there is no consideration involved regarding the shifting of transmission lines. No amount, whatsoever, is being paid by NHAI to MVVNL for shifting work. The NHAI makes payment for shifting work to its contractors and since the MVVNL only supervises the wor....
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....he contractor justify his supply of service and goods in shifting the transmission lines? If the GST on the work done is paid to MVVNL and contractor both, then there will be double taxation on the same taxable amount which is against the provisions of law and natural justice. 9. That paying GST twice will be a heavy burden on NHAI, which is working in public interest for the betterment of road infrastructure in the country and the double tax will ultimately be a financial burden on the citizens of India. 10. That MVVNL is relying on section 15 (2)(b) of C.G.S.T. which states that-:- "any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not include in the price actually paid or payable for the goods or services or both." 11. That it appears that MVVNL is misinterpreting the section 15(2)(b) and is mixing two separate transactions namely (1) between NHAI and MVVNL and (2) between NHAI and its contractors. The plain and simple interpretation of this section is as follows-: The above provision states that the expenses which ought to be incurred by the supplie....
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....sion lines, for which the NHAI is already paying supervision charges along with GST, the MVVNL is not justified in demanding GST on the full value of work of shifting of the transmission lines and as such, this demand is arbitrary and illegal. 15. That as a general principle, indirect tax is always levied on the basic value of any goods sold/transferred or service provided. The MVVNL has not sold/transferred anything to NHAI and as such no consideration is being paid by NHAI to MVVVNL in respect of value of goods on which NHAI is liable to pay GST to MVVNL. The NHAI is already paying the value of the work of shifting of the transmission lines to its contractor along with GST. The only service which MVVNL is providing to NHAI is supervision over the work of shifting of the transmission lines, for which the NHAI is already paying supervision charges along with GST. The demand of only GST by MVVNL, without any basic value of goods, is totally false and misconceived and against the provisions of CGST Act and UPGST Act. 16. That if MVVNL was itself performing the work of shifting the transmission lines and had raised running bills for the same, then it would have been ....
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....ffer their comments/views/verification report on the matter. No views/comments has been offered from the concerned officer on the ground that MVVNL does not fall under the jurisdiction of his formation as communicated vide letter dated 28.11.2022. 8. The applicant was granted a personal hearing on 30.11.2022 which was attended by Shri Kartikaya Singh, the authorized representative of the applicant during which they reiterated the submissions made in the application of advance ruling. DISCUSSION AND FINDING 9. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the 'CGST Act'. 10. We have gone through the Form GST ARA-01 filed by the applicant and observed that the applicant has ticked following issues on which advance ruling required- (1....
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....and in accordance with applicable standards and specifications of concerned utility owning entity. The cost of shifting of such utilities indicated in Schedule B is payable to the Contractor as per Schedule H. Cost of shifting utilities not included in the Schedule B, if any, shall be treated as Change of Scope. The Authority will provide assistance to the Contractor for obtaining the estimates for shifting of such utilities from the entity owning such electric lines, water pipes or telephone cables, as the case may be. The Contractor shall execute such utility shifting works under the supervision of utility owning agency and Authority Engineer (AE) in accordance with the provision of agreement. The supervision charges only shall be paid by the Authority to the Utility Owning Entity. In the event of any delay in shifting thereof the Contractor shall be responsible for failure to perform any of its obligations here under if such failure is not as a direct consequence of delay on the part of the entity owning such electric lines, water pipes or telephone cables, as the case may be. The dismantled material/scrap of existing Utility to be shifted dismantled shall belong to the Contract....
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....g or modification of transmission lines. Every material and labour involved in the work is being purchased by the NHAI or its contractors and ITC is claimed against this transaction and TDS is being deducted by the NHAI on payments made to their contractors. The MVVNL is only supplying the services of supervision and shutdown to the NHAI. 16.3 It is pertinent to examine what does a Supplier mean in GST. Section 2(105) of the CGST Act defines the word supplier as such: In this Act unless the context otherwise requires:- "Supplier in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services both supplied." In view of the above, it is observed that MVVNL is not a supplier of goods or services in relation to shifting of transmission lines and other assets which are required to be shifted during construction or widening of roads, the work being undertaken by NHAI itself. Hence, there is no relationship between NHAI and MVVNL which can be categorized as that of supplier and recipient except for the services of the ....
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.... fall under the definition of goods as mentioned in the GST Act, 2017. 18.1 The definition of consideration in Section 2 (31) of the GST Act, 2017 is reproduced below:- "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. It is observed that in the instant case no consideration whatsoever whether in money or otherwise is being paid to MVVNL by the NHAI so far as the task of shifting of transmission lines is concerned. Because the NHAI is making payment to its contactors for shifting of transmission lines in relation to widening of roads. No payment is made to MVVNL except supervision charges for the entire operation. If there is any consideration being paid, it is only to the contractors of the NHAI who are engaged in the shifting of transmission lines and NHAI is paying GST on the payment made to their contractors apart from deducting TDS thereon. The consideration involved between NHAI and MVVNL is confined....