Case Law Details
In re ARG Electricals Pvt. Ltd. (GST AAAR Rajasthan)
The Ajmer Vidyut Vitran Nigam Limited (hereinafter called as AWNL) had invited bids for providing of Rural Electricity Infrastructure for Household electrification in selected blocks of Dungarpur District of Ajmer DISCOM under Rajiv Gandhi Grameen Vidhyutikaran Yojana scheme on turnkey basis for erection of 11KV & LT Single Phase lines, erection of single phase 11KV Sub-station and release of BPL domestic connections under RGGVY/TN-13&TN-14.The appellant being the lowest bidder had been awarded the above work. After accepting the work, the AWNL had distributed the above work in two work orders, one for the “Supply of material/equipment for providing of Rural Electricity Infrastructure” and other for the “Erection, testing and commissioning of the supplied material/equipment”. Further the terms and conditions of the work orders are such that if the supply of material are not erected, tested and commissioned as per the requirement the payment would not be made by the AWNL.
The scheme is aimed at electrifying all villages and habitation as per revised definition; providing access to electricity to all rural households; providing electricity connection to Below Poverty Line (BPL) households free of cost of service connection with single light point. However, from the Evaluation Report on RGGVY of Planning /Commission, we note that only the connection was free and the consumption Of the electricity by the beneficiaries of the Yojna was chargeable.
From the above it emerges that though the beneficiaries of RGGVY are getting free electricity connection but they will have to pay for the consumption of electricity to AVVNL. In other terms, the work being undertaken by the Appellant will ultimately increase the consumer base of AVVNL resulting in more revenue to AVVNL. We find force in the contention of the RAJAAR. that M/s AVVNL is involved in supply of electricity to the consumers and are collecting consideration in lieu of the said supply. The ‘Electricity’ as per GST is classified under the category of ‘goods’ and thus M/s AVVNL is supplying goods to consumers and is receiving consideration against the same, hence they are involved in the business of supplying goods. They also receive consideration for the supply of electricity The predominant activity of M/s AVVNL is to supply electricity and the civil structure or original work being under taken by the Appellant shall be used for transmission of electricity which is predominant activity of AWNL and is chargeable. Hence, we hold that the work undertaken by the applicant in the instant case is an original work which is incidental or meant predominantly for use for commerce, industry, or any other business or profession.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING,RAJASTHAN
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