The Kerala Appellate Authority of Advance Ruling (AAAR) while affirming the AAR’s ruling held that no concessional rate of 12% GST applicable for work contract services supplied to Kerala State Electricity Board.
The Kerala State Electricity Board has awarded the work of execution of civil works of Pazhassi Sagar Small Hydro electric project to the Appellant, M/s R.S. Development and Construction Pvt. Ltd. as per Work Order.
As per the work order, the work involves construction of intake structure, leading channel, tunnel powerhouse, tailrace, civil works of the switchyard access roads and other allied works, fabrication and erection of Steel liners and specials from tunnel portal to powerhouse trash rack, intake gate, draft tube gate and Hoisting arrangements.
The applicant has sought advance ruling on the issue of whether the execution of Civil works of the Pazhassi Sagar Small Hydro Electric project as per the above Work Order would fall under Sl No. 3(iii)(b) or 3(vi) of Notification No.11/2017-Central Tax (Rate) dated June 28, 2017 attracting 12% GST.
The lower authority ruled that the rate of 6% under Sl. No. 3(111) or Sl. No. 3(vi) of the Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017 is not applicable for Works Contract Services supplied by the Applicant to the KSEB as per Work Order No. 06/CE CCN/2017-18 dated October 6, 2017.
The contention of the appellant that the Advance ruling in question is in violation of the principles laid down by the decision of the 25th GST council meeting.
The Coram consisting of Shyam Raj Prasad and Anand Singh clarified that Kerala State Electricity Board Ltd falls under the category of a Government entity for the purpose of the said exemption.
The Authority further observed that the supply of services in relation to the execution of the civil works of Pazhassi small hydroelectric project covered under Work order No. 06/CEECCN/ 2017-18 dated October 6, 2017, made by the appellant to the Kerala State Electricity Board Ltd are not eligible to concessional rate of 6% CGST provided by the said notification No. 11/2017-Central Tax (Rate) dated June 28, 2017.
Therefore, the services provided by the applicant shall not be eligible for a concessional rate of SGST 6% also in terms of notification No. SRO 370/2017 dated June 30, 2017, since the CGST statutory provisions are pari materia with State GST provisions.
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