Rate of tax (service)- The present appeal has been filed against the Advance Ruling order.
Appellant is fully integrated Electrical Business Group in India engaged in providing maintenance and engineering services.
Chhattisgarh State Power Distribution Company Limited have been entrusted to execute the project i.e. implementation of IPDS Scheme of Government of India for:-
(i) Strengthening and augmentation for Sub-transmission & Distribution Infrastructure and
(ii) Electrification Work in 15 Circles (through eight packages) in Chhattisgarh State on behalf of Government of Chhattisgarh.
CSPDCL had floated a tender to award the aforesaid specified work and after successful bidding, the Appellant has been awarded the works contract service by CSPDCL. The appellant believes that its supply should be treated as supply of services which attracts Notification No. 11/2017 dated 28.06.2017 as amended by 24/2017 dated 21.09.2017 State Tax(Rate) as a result of which the rate of tax on its supply to (CSPDCL) would be 6% CGST and 6% CGGST.
The moot issue before us is to decide whether the activities undertaken or proposed to be undertaken of the appellant by way of supply of goods and services fall "within the scope and limits of Notification no. 24/2017 Central Tax (Rate) Dated 21 Sep 2017" and consequently determine the rate of tax of such supply.
It is well settled position of law that statue or notification relating to concessional rate of tax should be strictly interpreted i.e. literal rule of interpretation should be followed. In notification no. 24/2017-Central Tax (Rate), dated 21st September, 2017 in clause (a), emphasis has been given on the words " meant for use other than for commerce, industry, or any other business". The infrastructure intended to be provided by the Appellant under contract to CSPDCL will ultimately be used for distribution of electricity' and it is undeniable fact that CSPDCL collects charges as per the tariff decided for distribution of electricity which undisputedly falls within the ambit of 'Commerce' or 'business'. Therefore appellant's argument that nobody is bearing the cost of IPDS scheme does not hold water as there is no stipulation to this effect in the notification. It is also no body's case that the cost of IPDS will not be considered while fixing the tariff of electricity to be supplied in future.
Held that- this bench founds no anomaly in the decision and grounds relied upon by AAR.