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.
