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Since the nature of activities are principally and predominantly, commercial in nature, the Appellants are not eligible for the benefit of 12% GST

Classification of service — In the instant case, The issue to be determined is the rate of tax applicable on the composite supply of works contract supplied by the Appellant to the electricity distribution companies like BESCOM, MESCOM and HESCOM. The question raised by the Appellant in their application for advance ruling was whether they are eligible for the GST rate of 12% as per entry Sl. No 3(vi)(a) of Notification No 8/2017 IT (R) dated 28-06-2017 in respect of the supply of works contract to electricity distribution companies. The lower Authority however held that the original works executed by the Appellant for the electricity distribution companies are meant to be used predominantly for the supply of electricity to consumers for a consideration which is in the nature of commerce or business and hence, the Appellant will not be eligible for the tax rate of 12% under entry SL. No 3(vi)(a) of the said Notification. It also held that the Explanation to entry Sl. No 3(vi) will not apply to the Appellant as the electricity distribution companies are not Central Government, State Government or local authority. Held that— Since the nature of activities of BESCOM, MESCOM and HESCOM are principally and predominantly, commercial in nature, we come to the considered conclusion that the Appellants are not eligible for the benefit of 12% GST in terms of entry Sl. No 3(vi)(a) of Notification No 8/2017 IT (R) dated 28-06-2017 as amended. — Manipal Energy & Infratech Ltd., In Re… [2020] 21 TAXLOK.COM 146 (AAAR-Karnataka)

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