In re Super Wealth Financial Enterprises Private Ltd. (GST AAAR Odisha)
The appellant sought the rulings seeking their eligibility to exemption in terms of entry sl no 3 of Notification no 12/2017-Central Tax (Rate) dated 28-06-2017, which has been extended to Pure services (excluding works contract service or other composite supplies involving supple of of goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority by wau of any activity in relation to any function entrusted to a Panchauat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. The AAR was of the view that the activities undertaken by the applicant do not constitute supply of pure services as it involves significant use of goods/materials.
On the contract, it is clearly specified that all installed equipments constructed or system installed are transferred to BMC in good condition. Therefore, the activities carried out by the appellant in the instant case will be considered as a supply of goods in terms of the provisions of Schedule II, Para 4-A of CGST Act, 2017 / SGST Act, 2017. The appellant under the grounds of appeal has not put forth any arguments or legal provisions to negate the applicability. Therefore, the contention of the appellant that the transaction doesn’t involve any supply of goods is not sustainable.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, ODISHA
M/s Super Wealth Financial Enterprises Private Ltd, Plot No.3198/5183, Gauri Vihar, Lewis Road, Bhubaneswar, Dist.-Khurda-752002, (Appellant) has filed an appeal before AAAR, Odisha on 07.12.2018 aggrieved by advance ruling no. 04/ODISHA-AAR/2018-19 dated 31.10.2018 pronounced by the Odisha Authority for Advance Ruling, Bhubaneswar (AAR) under Section 100 of the Odisha Goods and Service Tax Act, 2017/CGST Act, 2017.
2.0. The Appellant having GSTN 21AAECS9864P1ZN is registered in Bhubaneswar and falls within the jurisdiction of State of Odisha and is being administered by Bhubaneswar – I Circle (State jurisdiction). The Appellant is a company engaged in providing Energy Efficient Street Lighting services and is registered under GST vide registration no. 21AAECS9864P1ZN inter-alia for the nature of business activities such as Works Contract and Recipient of Goods or Services.
2.1. The Appellant sought an advance ruling on applicability of entry no. 3 of Notification No 12/2017-Central Tax to the services provided by the applicant by way of providing energy saving street lighting services including operation and maintenance of the street lighting installations to Bhubanewsar Municipal Corporation (BMC).
2.2. The AAR, Odisha has given the following ruling against which the appellant has preferred the instant appeal.
“The service provided by the applicant by way of providing energy efficient street lighting services including OM of the street lighting infrastructure during the contracted period to Bhubaneswar Municipal Corporation (BMC) do not constitute supply of ‘pure services’ as it involves significant use of goods/materials with stipulation to transfer the total business assets to BMC at the end of the contract period. The benefit of exemption from tax in terms of Sl. No.3 of the notification No.12/2017 – Central Tax (Rate), dated 28.06.2017 is not available to the applicant.
3.0. The appellant is providing street lighting service to Bhubaneswar Municipal Corporation (hereinafter referred to as “BMC”) under an ‘Energy Performance Contract’ dated 05.10.2013. In terms of the aforesaid Energy Performance Contract, the appellant has installed energy saving equipment on existing street light poles in the city of Bhubaneswar and has been operating and maintaining the said infrastructure since 2013. The contract was awarded to the appellant on the basis of their offer of highest energy saving of approx 80% for a period of 10 years. The Street Lighting Services being provided by the appellant to BMC since Oct. 2013 was covered under service tax until introduction of Goods & Services Tax (“GST”) in July-2017.
3.1. Under the GST regime, Notification 12/2017-Central Tax (Rate) dated 28.06.2017 provides exemption from the payment of GST to various services specified therein. Serial no. 3 is reproduced below:
