AAR RAJASTHAN RULES POWER CABLES NOT ELIGIBLE FOR GST CONCESSION UNDER NOTIFICATION 03/2017

AAR RAJASTHAN RULES POWER CABLES NOT ELIGIBLE FOR GST CONCESSION UNDER NOTIFICATION 03/2017

RAJASTHAN AUTHORITY FOR ADVANCE RULING

GOODS AND SERVICES TAX

Case Title- KEI Industries Limited

(GST AAR RAJASTHAN)

Advance Ruling No.RAJ/AAR/2018-19/09

Date of Judgment/Order- 1st August 2018

IMPORTANT PARAGRAPHS

Para No. 1.1. KEI Industries Ltd. (hereinafter referred to as the “Applicant”) is a public limited company incorporated in India and is engaged in the business of manufacturing and supply of various kinds of Power Cables.
Para No. 1.2. The present application pertains to the supply of Copper XLPE insulated armoured low tension cables(hereinafter referred to as “electric/power cables”) by the Applicant to M/s. Vedanta Ltd.
Para No. 1.3. M/s. Vedanta is undertaking petroleum operations under PRE-New Exploration Licensing PolicyPRE-NELP) granted by the Government of India/State Government to Cairn Energy India Pvt. Ltd. in the State of Rajasthan which was vested in Vedanta after the merger of Cairn India Pvt. Ltd. in Vedanta. For carrying out such petroleum operations, it uses various kinds of machines and equipment. Almost all machines and equipment used by Vedanta for petroleum operations run on electricity and thus, electric cables are required for providing electricity to such machines and equipment.

Para No. 35. He further stated that besides spares, materials, accessories, entry no. 24 of the list to Notification No. 03/2017-CT also covers stores or consumables. In order to decide if the power cables supplied by the Applicant would qualify as stores or consumables, attention is invited to the decision of Hon’ble Ahmedabad Tribunal in Sanghvi Aerospace (P) Ltd. vs. CCE, Ahmedabad/2009 (247) ELT 578/. In the said case, the issue involved was whether or not, the wires and cables supplied for aircrafts, satellite launch vehicles, etc. would be entitled to the benefit under Notification 10/97-C.E.

Para No. 8. Opinion of Jurisdictional Officer:
The jurisdictional Officer in his comments has stated that sub-assemblies, tools, accessories, stores, spares, materials, supplies, consumables for running, repairing or maintenance of the goods relates to the one specified in this list. Which means goods used for running, repairing or maintenance of the goods specified in this list are only eligible for concessional rate. While applicant has not mentioned that in which machine/ machines specified in this list, power cable will be used as sub-assemblies, tools, accessories, stores, spares, materials, supplies, consumables for running, repairing or maintenance of the goods. Further the applicant has stated that he is not aware of the type, nature and functions etc of the machines or equipments for which the cables are required for.

So in his opinion the condition “The goods must be covered under the list annexed to the notification no. 03/2017-CT” which is not fulfilled and hence power cable do not qualify description of goods mentioned in the notification that is to say “Goods specified in the list annexed to this table”.

RULING

Hence under the facts and circumstances of the case discussed above “Electrical Cables” do not fall under Entry no. 24 of list as ‘material’, ‘accessories’, ‘consumables’, and/or ‘stores’ of SI. No. 1 of Notification No. 03/2017-Central Tax (Rate) dated 28.06.2017.