M/S MADHYA PRADESH PASCHIM KSHETRA VIDYUT VITARAN COMPANY LIMITED

The Applicant is engaged in power distribution. For this purpose it also carries supply and erection work.

The Applicant sought Advance Ruling on "Whether clause(vi)(a) of Sr. No. 3 of table of Notification No. 11/2017-Central Tax(Rate) dated the 28th June, 2017 is applicable on the works contract undertaken by it And determination of liability to pay Tax?"

As the Government of Madhya Pradesh is having full control over the applicant M/s M.P. Paschim Kshetra Vidyut Vitran Co. Ltd. and therefore the applicant is covered under the definition of Government Entity.

The Applicant is entrusted for various ambitious projects of DDUGY, IPDS, ADB, SSTD, Saubhagya Yojna, FSP and all other schemes of governments and these projects are carried out for business purpose and therefore the benefit of Concessional Rate of 12% (6% under Central tax and 6% State tax) as per notification is not available to the applicant on works pertaining to construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration as the same is undertaken for the business purpose.

Therefore, the contract entered by the applicant falls under the works contract and as per entry no. (ii) of S. No. 3 of the table of notification no. 11/2017 – Central Tax (Rate), Dated – 28th June 2017 as amended from time to time the applicable rate of tax is 18% (9% under Central tax and 9% State tax).

CRUX: The Applicant is not entitled for the benefit of concessional rate of GST @12% (6% under Central tax and 6% State tax) for the said projects in terms of Notification No.24/2017-Central Tax (Rate) dated 21.09.2017 read with Notification No.31/2017-Central Tax (Rate) dated 13.10.2017.  The applicable rate of tax is 18% (9% under Central tax and 9% State tax).