In re HPL Electric and power limited (GST AAR Chhattisgarh)
GST on installation of highway lighting system
The AAR, Chhattisgarh in the matter of M/s HPL Electric and Power Ltd. [Order No. STC/AAR/02/2022 dated May 2, 2022] has ruled that installation services for highway lighting systems cannot be considered as “Construction services” under SI. No. 3(iv)(a) of Notification No. 11/2017 – Central Tax (Rate) dated June 28, 2017 (“the Services Rate Notification”) thus, ineligible to the benefit of 12% GST.
Facts:
M/s HPL Electric and Power Ltd. (“the Applicant”) is engaged in the business of manufacture, sale and installation of electrical equipments. The Applicant has entered into an agreement with M/s. Adani Infra India Ltd. (“AIIL”) to provide services for design, engineering, supply, installation etc. of Highway Lighting System, which is a part of the project of development and maintenance of a 53km 4-laned highway in Chhattisgarh.
The Applicant had contended that the work carried out is essential for completion of road and hence is classified under SI. No. 3(iv)(a) of the Services Rate Notification and therefore should attract GST rate of 12%. It was contended that the work carried out by the Applicant was a works contract as defined under Section 2(119) of the Central Goods and Services Act, 2017 (“the CGST Act”). The Applicant had further contended that the installation of lighting is a part of the construction of highways as a highway cannot be operational without lighting system.
Issue:
Whether the supply to be made by the Applicant to AIIL can be classified under SI. No. 3(iv)(a) of the Services Rate Notification and the benefit of GST of 12% can be availed in respect of said supply by the Applicant to AIIL?
Held:
The AAR, Chhattisgarh in Order No. STC/AAR/02/2022 held as under:
