Case Law Details
In re Keshav Projects (GST AAR Andhra Pradesh)
Whether the Supply of Manpower for preparation and serving of spot Electricity Bills’ services provided to Andhra Pradesh Central Power Distribution Corporation Limited for Andhra Pradesh Rural Electrification including distribution of electricity (APCPDCL) can be termed as ‘Pure Services’ as referred in SI.No.3- (Chapter 99) of table mentioned in Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 and accordingly eligible for exemption from Central Goods and Service Tax and SI.No.3 (Chapter 99) of table mentioned in G.O.Ms.No.588 – (Andhra Pradesh) State Tax (Rate) Dated 12/12/2017 and accordingly eligible for exemption from Andhra Pradesh Goods and Service Tax.
As seen from the documents on record, we observe that the applicant is engaged in supply of Manpower for preparation and serving of spot Electricity bills services to APCPDCL. Now we examine
> Whether the services of the applicant are ‘Pure Service’
> Whether APCPDCL is a ‘Local Authority’
> Whether the supply is in relation to functions entrusted to panchayat under
Article 243G of the Constitution.
to seek exemption under (Chapter 99) entry 3 of the notification no 12/2017-Central Tax (Rate) dt:28.06.2017.
8.1 Whether the services,of the applicant are ‘Pure Service’
‘Pure services’ are not defined in the Act, but as per common parlance they cover all the contracts where there is no supply of goods i.e., to say any supply which is either deemed as services under Schedule II of CGST Act or which are not covered under the definition of goods shall be categorized as pure services.
In the instant case, the Scope of the supply as mentioned by the applicant includes supply of both goods and services. The excerpts of the contract as mentioned in 5.4 supra, is reproduced here under for the propose of clarity,
“1. The spot billing agency shall procure adequate number of hand held computers and also stationary and other requirements for issue of spot bill. The bill format shall be as APCPDCL specifications. The agency shall keep adequate no of SBMs to meet contingency like repairs etc.
2. The spot billing agency shall appoint persons able to read different kinds of electrical meters and their status and sufficient knowledge to operate the spot billing machines.”
Thus the transaction covers the procurement of goods as well in addition to the services, disqualifying the present supply to be covered under the concept of ‘pure services’. Hence the exemption clause under entry SI.No.3- (Chapter 99) of table mentioned in Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 is not applicable for the instant case. In view of the above, the rest of the issues like APCPDCL being a ‘Local Authority’ or the supply being one of the functions entrusted to panchayat under Article 243G of the Constitution, find no relevance to take up for further discussion.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, ANDHRA PRADESH
1. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and SGST Act, 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the APGST Act.
2. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s. Keshav Projects (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017.
3. Brief Facts of the case:
3.1 The applicant, M/s Keshav Projects is engaged in ‘supply of manpower’ for preparation and serving of spot electricity Bills to Andhra Pradesh Central Power Distribution Corporation Limited (APCPDCL) with 18% GST (SAC -00440410) as per the terms of the contract.
Scope of work: Preparation and serving of spot electricity bills in consumer premises of LT Cat-I, Cat-II and Cat-IV (D&E) (excluding High Value and Agricultural Services) with GPRS enabled spot billing machines with/without IR/IRDA port readings in specified areas in ( consisting of both urban and rural areas) of state of Andhra Pradesh.
3.2 Andhra Pradesh Central Power Distribution Limited (hereinafter referred to as APCPDCL) is a limited company set up by Government of Andhra Pradesh in which 99% of shares are held by Governor of Andhra Pradesh. The APCPDCL is responsible to engage in the business procurement, supply, and distribution of electricity in specified areas (both rural and urban) of the state of Andhra Pradesh.
The applicant submits that the APCPDCL argues that services provided to them are covered under S.No.3 of Notification No.12/2017 dt: 28.06.2017 and hence stated at ‘Nil’ rate of tax.
4. Questions raised before the authority:
The applicant seeks advance ruling on the following:
1. Whether the “Supply of Manpower for preparation and serving of spot Electricity Bills’ services provided to Andhra Pradesh Central Power Distribution Corporation Limited for Andhra Pradesh Rural Electrification including distribution of electricity (APCPDCL) can be termed as ‘Pure Services’ as referred in SI.No.3- (Chapter 99) of table mentioned in Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 and accordingly eligible for exemption from Central Goods and Service Tax and SI.No.3 (Chapter 99) of table mentioned in G.O. Ms. No. 588 – (Andhra Pradesh) State Tax (Rate) Dated 12/12/2017 and accordingly eligible for exemption from Andhra Pradesh Goods and Service Tax.
On Verification of basic information of the applicant, it is observed that the applicant is under State jurisdiction, i.e. Assistant Commissioner (ST) Steel Plant Circle, Visakhapatnam Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017.
In response, remarks are received from the State jurisdictional officer concerned on the issue, stating that no issues are pending with the subject matter of the Advance Ruling sought by the applicant.
5. Scope of the contract in detail:
5.1 The applicant has agreed to provide supply of manpower for preparation and serving of spot electricity bills services to APCPDCL in consumer Premises of LT cat-I, cat-II & cat IV (D & E) (Excluding High value Agricultural Services) with GPRS enabled spot billing machines with/ without IR/ IRDA port readings in specified areas (consisting of both urban and rural areas) of state of Andhra Pradesh. The applicant has employed appropriate technology and safe and effective equipment, machinery and methodology to perform the services in accordance with the agreement as entered with APCPDCL.
5.2 The scope of supply of manpower for preparation and serving of spot Electricity Bills services under the terms of contract comprises of the spot billing agency shall bill the services as per schedule transformer wise and complete the work well within the schedule dates.
5.3 The applicant rendering supply of manpower for preparation and serving of spot Electricity bills services during implementation will ensure that the contracts are completed with least cost and no time overruns and ensure that quality and sustainable assets are sustained.
5.4 Details of the services rendered under contract agreement:
1. The spot billing agency shall procure adequate number of hand held computers and also stationary and other requirements for issue of spot bill. The bill format shall be as APCPDCL specifications. The agency shall keep adequate no of SBMs to meet contingency like repairs etc.
2. The spot billing agency shall appoint persons able to read different kinds of electrical meters and their status and sufficient knowledge to operate the spot billing machines.
3. The spot billing agency shall bill the services as per Schedule transformer wise and complete the work well within the schedule dates.
4. The spot billing agency has to visit the consumer premises where the service connection is located and metered and take reading with IR/IRDA port/ manually and enter the same in the spot billing machine and generate bill. The bill should be served to the consumer or residents of the premises on the spot.
5. The spot billing work shall be carried out every month without fail. Failure will attract penalty and loss recovery as per the agreement.
6. The spot billing agency shall have to bill the services under category 1, 2 and 7 as per tariff order and furnish manual exceptional reports on day to day basis.
7. The spot billing agency shall have to follow the calendar schedule for billing of services. The calendar schedule will be provided by the AE/Operation concerned.
8. The Spot billing has to be carried out in SINGLE spell on continuous basis from 2nd to 9th as per schedule.
9. Bill preparation and issue shall take place the same day of every month for a given consumer as per calendar schedule.
10. The spot billing agency shall have to record the movements of their meter readers in the movement register kept in section offices/sub-Divisions so that, the daily progress of completion of reading can be monitored by the Deputy Executive Engineer/ Operation/Asst Executive Engineer/ Operation to discharge their legitimate duty of timely completion of the billing as per the schedule. The meter reader of the spot billing agency in the evening shall give manual exceptional report for the following cases.
-
- Struck up
- Burnt
- Progressive reading with DC
- No meter with supply (MNE)
- No seals (TC seal, meter cover seal)
- Meter glass broken
- Reading not furnished
- Door lock
- Defective IRDA meter
- Any other observation, which cause loss of revenue to APCPDCL like malpractices (Purpose of supply misused), theft of Energy etc.
11. The spot billing agency, on day basis, shall have to go to the premises where AAO/ERO specifies for uploads for billing data and download the data from the nearest sub-division/section office/ERO based on convenient after billing at periodical intervals which may be decided from time to time.
12. Meter readings shall have to be taken on fixed dates as per calendar schedule for monthly services every month.
13. The concerned section shall monitor the billing work as per schedule with the Billing agency and Deputy Executive Engineer/operation/Asst executive Engineer/Operation/Executive Engineer/Operation concerned shall also pursue the billing work from time to time. They shall ensure the spot billing is completed in the stipulated period to avoid unnecessary billing grievances and postponement of revenue.
14. Penalties : The APCPDCL reserves the right to levy penalties in the following cases in respect of spot billing activity.
a) If the spot bills are not served to the consumers, penalty of Rs. 5/- for each service to be levied.
b) No payment to spot billing bills served after the grace period of 2 days from the scheduled dates.
c) Exceptional i.e., Door lock and RNF cases should not exceed 5% of the total services to be billed, if exceptional exceeds 5% of the total services to be billed, then the APCPDCL shall recover penalty for an amount equivalent to 5% of total bills of sub division
e) No payment will be made for services with wrong readings, reading not furnished (08) and door lock (05) status in final exceptional given by spot billing agency. If any service continuously under these status for 3 months penalty will be levied @ Rs.10/- per such service.
f) If the bills are prepared on the basis of table readings and if any suppression of readings, revenue loss and other activity which causes loss or damage to the department is notices, the Dept. has right to black list the agencies and communicate to other discoms under intimation to the Central Electricity Authority, EPF commissioner and labour commissioner besides forfeiting the available Bid security amount.
g) In addition to the above, Criminal cases will be lodged against the concerned Agency & Biller/Meter Reader by the competent authority i.e., AAO/EROs concerned in the load police station.
h) The APCPDCL has right to recover penalty amount either from the remuneration payable to the agency or from the bid security amount available with APCPDCL.
i) If manual billing is done against IRDA port meters without proper reason no remuneration shall be paid.
15. Penalty may be imposed if the billing is not completed in time schedule without proper reasons/without permission from concerned officers.
16. Where the IRDA port is not scanned and transferred to Ae login, manual billing for such services shall not be entertained and no remuneration shall be
17. Readings should be taken through IR/IRDA port only for the services to which IR/IRDA port were installed. No remuneration will be allowed for the services for which billing not done through IRDA ports,
18. In case any new services released in the premises of UDC/Bill stopped services against which arrears outstanding, a list of such services is to be communicated to Asst Executive Engineer/ Operation and Dy. Executive Engineer /operation concerned.
19. The bill preparation shall take place on the same day of every month. Remuneration shall not be paid if there is delay or more than 2 days in issuing the bills. Condemnation of delay is at the sole discretion of management.
20. The APCPDCL officers are authorized to random check the bill issued to the consumer under correct status with the actual readings. If it is proved on such verification that spot billing agency meter readers issued intentionally wrong bills with wrong status or false reading the agency is liable penalty deduction as per clause 9
21. The spot billing agency shall have to comply with the orders and instructions of officers of APCPDCL in discharge of the works assigned.
22. The spot billing agency shall ensure that the persons working in the agency shall be very courteous to the consumers and also shall not enter into any arguments with the consumer. He should be able to explain the system of billing in practice to the consumer whenever necessary.
23. If the quality of the service of the spot billing agency is not satisfactory continuously month after month and does not improve to establish the system of continuous spot billing in its real spirit the agreement is liable for termination with one month notice at any time during the subsistence of this agreement.
24. The bills are liable for TDS such as income tax and other taxes at the rates as per the enactments of Govt of India and Govt of Andhra Pradesh from time to time.
25. GST as per rules
26. If, in the view of superintending Engineer/operation /CRDA Circle/Amaravathi the execution of the work is felt to be slow and now not being done satisfactory as per the terms and conditions of the contract the superintending Engineer/Operation/ Circle/Guntur reserves the right to terminate the work temporarily/ permanently and to arrange to carry out the job of spot billing of the sub- division/section/distribution either departmentally or by other agency. The superintending engineer shall determine the agreement in giving notice in writing if the agency fails to execute the works either in full or in part of it. The conduct of the agency or any of those employed by him and working on behalf of the agency or any of those employed by him and working on behalf of the contractor is such that in the opinion of superintending Engineer/Operation/CRDA circle/amaravathi. Shall not be responsive what so ever responsible for any loss/expenditure incurred by the APCPDCL to avoid any inconvenience cause out of such determination of the agreement conditions agreed by agency.
27. The agency shall be responsible for any accident or damage caused to the property or personnel or any other person arising out of carelessness or negligence on the part of himself or his employees or his authorized agents. The agency should completely indemnify the APCPDCL for any accident or damage as per the clause or P.S. of APDS.
5.5 The applicant has raised monthly invoices regularly and has charge 18% GST in the invoices raised and has deposited this GST amount from time to time to the government as the Contract Agreement for consultancy services has provision for the amount of GST over billed amount to be paid by the APCPDCL.
5.6 The applicant further states that its client, APCPDCL is of the view that the supply of manpower for preparation and serving of spot electricity bills services provided to the extent of such services provided in rural areas to them are exempt from CGST and Andhra Pradesh GST as per of Notification No.12/2017 Central Tax (Rate) dt: 28.06.2017 and G.O.Ms.No.588 (Andhra Pradesh) State Tax (Rate) dt:12.12.2017 respectively.
5.7 Given the above background, the present application is being preferred before the Hon’ble Authority of Advance Ruling to determine whether the supply of manpower for preparation and serving of spot electricity bills services provided to the extent of such services provided in rural areas provided to Andhra Pradesh Central Power Distribution Corporation Limited can be termed as ‘Pure Services’ as referred in SI.No.3 (Chapter 99) of table mentioned in Notification No.12/2017 – Central Tax (Rate) dated 28.06.2017 and accordingly eligible for exemption from Central Goods and Service Tax and sl. No.3 (Chapter 99) of table mentioned in G.O.Ms. No.588 – (Andhra Pradesh) State Tax (Rate) dt: 12.12.2017 and accordingly eligible for exemption from Andhra Pradesh Goods and Service Tax.
The applicant had filed an application in form GST ARA-01 dated 13.07.2021 by paying required amount of fee for seeking Advance Ruling on the following issues, as mentioned below:
6. Applicant’s Interpretation of Law:
6.1 Whether the ‘Supply of Manpower for preparation and serving of spot electricity bills services provided to the extent of such services provided in rural areas’ services provided to Andhra Pradesh Central Power Distribution corporation limited (APCPDCL) can be termed as ‘Pure Services’ as referred in SI.No.3 – (Chapter 99) of table mentioned in Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 and accordingly eligible for exemption from Central Goods and Service Tax and SI.No.3 – (Chapter 99) of Table mentioned in G.O.Ms. No.588 – (Andhra Pradesh) State Tax (Rate) dated 12.12.2017 and accordingly eligible for exemption from Andhra Pradesh Goods and Service Tax.
The relevant portion of the Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017 has been reproduced for interpretation, which is as follows:
“In exercise of 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 intra 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 rate 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 (5) of the said table, namely: –
|
SI.No |
Chapter, Section, Heading, Group or service code (Tariff) | Description of Services | Rate (Percent) | Condition |
| (1) | (2) | (3) | (4) | (5) |
| 3 | Chapter 99 | Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union Territory or local authority or a Government authority by way of any activity in relation to any function entrusted to a panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243w of the Constitution. |
Nil | Nil |
From the above mentioned notification, it can be stated that the services are exempted from the CGST and SGST Tax if the following conditions are satisfied cumulatively:
> They are rending pure services;
> To the Central Government, State Government or Union Territory or local authority or a Government authority; and
> Such services should be in relation to any function entrusted to a panchayat under article 243G of the Constitution or in relation to any function entrusted to Municipality under article 243W of the constitution.
6.2 Interpretation of ‘Pure Services’
The services provided by the applicant, Keshav Projects may be termed as ‘Pure Services’, provided they fulfill the following conditions:
i) It excludes works contract service
ii) It excludes other composite supplies involving supply of any goods
iii) It is supply of services without involving any supply of goods
The word ‘Pure Services’ referred in notification has nowhere been defined in the Act, Rules or notification themselves. The Notification also does not specifically name the services which are eligible for exemption and which are excluded.
However, CBEC vide FAQ on Government Services, has clarified the scope of pure Services as under:
Question 25: what is the scope of ‘pure services’ mentioned in the exemption Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017?
Answer: in the context of the language used in the notification, supply of services without involving any supply of goods would be treated as supply of pure services. For example, Supply of manpower for cleanliness of roads, public places, architect services, Consulting engineer services, advisory services, and like services provided by business entities not involving any supply of goods would be treated as supply of pure services. On the other hand, let us take example of a governmental authority awarding the work of maintenance of street lights in a Municipal area to an agency which involves apart from maintenance, replacement of defunct lights and other spares. In this case, the scope of the service involves maintenance work and supply of goods, which falls under the works contract services. The exemption is provided to services which involves only supply of services and not for works contract services.
The term ‘Works Contract’ has been defined in Section 2(119) of the CGST Act, 2017 as
“Works contract” means a contract for building, construction, fabrication completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (Whether as goods or in some other form) is involved in the execution of such contract;”
In the Contract between the applicant and APCPDCL, there is no component of transfer of property in goods as evident from the contract agreement and is purely a service contract. As per the scope of work mentioned above in point no.7 of the applicant is mainly engaged in providing supply of manpower for preparation and serving of spot Electricity Bills to the APCPDCL through its staff and employees.
The scope of supply of manpower for preparation and serving of spot electricity bills services under the terms of contract comprises of the spot billing agency shall bill the services as per schedule transformer wise and complete the work well within the schedule dates.
6.3 APCPDCL qualifies to be a Central Government, State Government, Governmental Authority or local authority:
APCPDCL is a company under the Energy Department of the Government of Andhra Pradesh. The Andhra Pradesh Central Power Distribution is headed by the Energy Department of the Government of Andhra Pradesh by way of 99% shareholding on the name of governor of Andhra Pradesh and is responsible for supply and distribution of electricity, purchasing, selling, importing, exporting, wheeling, and trading of electrical energy, operation of distribution system including finalization of tariff, billing and collection thereof and to enter into any agreements for carrying on of such business in specified area of Andhra Pradesh.
The definition of “Governmental Authority” as per the definitions given under Notification no.11/2017– Central Tax (Rate) and Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017:
“Governmental Authority” means an authority or a board or any other body,-
(i) Set up by Act of parliament or a State Legislature; or
(ii) Established by any Government,
With 90 percent or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243W of the Constitution or a Panchayat under article 243G of the Constitution.”
The definition of ‘Local Authority’ as defined in section 2(69) of CGST Act, 2017, is stated as under:
“Local authority” means –
(a) a “Panchayat” as defined in clause (d) of article 243 of the Constitution;
(b) a “Municipality” as defined in clause (e) of article 243P of the Constitution;
(c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to , or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund;
(d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006;
(e) a Regional Council or a District Council constituted under the sixth schedule to the constitution;
(f) a Development Board constituted under article 371 and article 371] of the Constitution; or
(g) a Regional Council constituted under article 371A of the Constitution.
The APCPDCL was formed during the year 2019 by the Government of Andhra Pradesh. It functions directly under the Department of energy of the Government of Andhra Pradesh and in which 99% shareholding are in the hands of Honorable Governor of Andhra Pradesh.
Hence, APCPDCL, which is formulated by the Government of Andhra Pradesh and functions directly under the Ministry of Energy, is responsible for distribution of electricity in specified rural areas of the State of Andhra Pradesh and qualifies to be a ‘Local authority’.
6.4 Services are in relation to any function entrusted to a panchayat under
Article 243G of the Constitution
Article 243G of the Constitution has been briefed for reference:
“243G.Powers, authority and responsibility of Panchayats subject to the provision of this Constitution the Legislature of a State may by law, endow the panchayats with such powers and authority and may be necessary to enable then to function as institutions of self government and such law may contain provisions for the devolution of powers and responsibilities upon panchayats, at the appropriate level, subject to such conditions as may be specified therein, with respect to
(a) The preparation of plans for economic development and social justice;
(B) The implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the eleventh schedule”.
The Eleventh Schedule (Article 243G) of the Constitution list out the matters for economic development and social justice. The relevant extract of the schedule has been stated hereunder:
“14. Rural Electrification, including distribution of electricy”.
The APCPDCL is responsible for distribution of electricity in both specified rural and urban areas of the state of Andhra Pradesh. The main functions of the Department are as follows:
> Supply and distribution of electricity in the specified areas of the state of Andhra Pradesh (including rural electrification and supply of electricity in rural areas). Maintenance of electrical lines in the specified areas of the state of Andhra Pradesh (both rural and urban areas).
> The APCPDCL has been entrusted for supply and distribution of electricity in the specified areas of state of Andhra Pradesh.
Hence, the Supply of Manpower for preparation and serving of spot Electricity bills services provided by the applicant in rural areas of the state of Andhra Pradesh are in relation to function entrusted to a panchayat under Article 243G of the Constitution.
Concluding the above, the supply of Manpower for preparation and serving of spot Electricity bills services, being a ‘Pure Service’, provided by the Applicant to APCPDCL being a ‘Local Authority’ would be eligible for exemption under entry 3 of the notification no 12/2017- Central Tax (Rate) dt:28.06.2017 as such activity qualify to be in relation to functions entrusted to panchayat under Article 243G of the Constitution.
6.5 Prayer of the Applicant:
> The ‘Supply of Manpower for preparation and Serving of Spot Electricity Bills Services” provided by the Applicant in rural areas has no component of supply of goods and is eligible to be a ‘Pure Service’.
> Considering the definitions of Governmental Authority and Local Authority and the facts of APCPDCL, APCPDCL, qualifies to be a ‘ Local Authority set up and governed by the Energy department of the Government of Andhra Pradesh. The services provided by the Applicant to APCPDCL, is Supply of Manpower for preparation and serving of Spot Electricity Bills Services in Rural areas which is listed in Eleventh Schedule to Article 243G of the Constitution as functions of Panchayat.
> Considering the above mentioned, the Supply of Manpower for Preparation and Serving of Spot Electricity Bills services provided by the applicant to APCPDCL, is a ‘Pure Services’ eligible for exemption under Notification no. 12/2017-Central Tax (rate) dated. 28.06.20.2017.
7. Virtual Hearing:
The proceedings of Hearing were conducted through video conference on 21.10.2021, for which the authorized representative, CA Vijay Bhaskar Ammu attended and reiterated the submissions already made.
8. Discussion and Findings:
We have examined the issues raised in the application in light of the facts submitted by the applicant. The taxability, classification of the services, applicable rate of tax, and eligibility of exemption etc., for the Services supplied or to be supplied, as governed under the provisions of respective GST Acts are examined.
As seen from the documents on record, we observe that the applicant is engaged in supply of Manpower for preparation and serving of spot Electricity bills services to APCPDCL. Now we examine
> Whether the services of the applicant are ‘Pure Service’
> Whether APCPDCL is a ‘Local Authority’
> Whether the supply is in relation to functions entrusted to panchayat under
Article 243G of the Constitution.
to seek exemption under (Chapter 99) entry 3 of the notification no 12/2017-Central Tax (Rate) dt:28.06.2017.
8.1 Whether the services,of the applicant are ‘Pure Service’
‘Pure services’ are not defined in the Act, but as per common parlance they cover all the contracts where there is no supply of goods i.e., to say any supply which is either deemed as services under Schedule II of CGST Act or which are not covered under the definition of goods shall be categorized as pure services.
In the instant case, the Scope of the supply as mentioned by the applicant includes supply of both goods and services. The excerpts of the contract as mentioned in 5.4 supra, is reproduced here under for the propose of clarity,
“1. The spot billing agency shall procure adequate number of hand held computers and also stationary and other requirements for issue of spot bill. The bill format shall be as APCPDCL specifications. The agency shall keep adequate no of SBMs to meet contingency like repairs etc.
2. The spot billing agency shall appoint persons able to read different kinds of electrical meters and their status and sufficient knowledge to operate the spot billing machines.”
Thus the transaction covers the procurement of goods as well in addition to the services, disqualifying the present supply to be covered under the concept of ‘pure services’. Hence the exemption clause under entry SI.No.3- (Chapter 99) of table mentioned in Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 is not applicable for the instant case. In view of the above, the rest of the issues like APCPDCL being a ‘Local Authority’ or the supply being one of the functions entrusted to panchayat under Article 243G of the Constitution, find no relevance to take up for further discussion.
In view of the foregoing, we pass the following order.
RULING
(Under Section 98 of Central Goods and Services Tax Act, 2017 and the Andhra Pradesh Goods and Services Tax Act, 2017)
Question: 1. Whether the “Supply of Manpower for preparation and serving of spot Electricity Bills’ services provided to Andhra Pradesh Central Power Distribution Corporation Limited for Andhra Pradesh Rural Electrification including distribution of electricity (APCPDCL) can be termed as ‘Pure Services’ as referred in SI.No.3- (Chapter 99) of table mentioned in Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 and accordingly eligible for exemption from Central Goods and Service Tax and SI.No.3 (Chapter 99) of table mentioned in G.O.Ms.No.588 – (Andhra Pradesh) State Tax (Rate) Dated 12/12/2017 and accordingly eligible for exemption from Andhra Pradesh Goods and Service Tax.
Answer: Negative
