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2020 ] IN RE : KARNATAKA STATE ELECTRONICS DEVELOPMENT CORPORATION LTD. 433
hearing proceedings held on 21-11-2019 & reiterated the facts narrated in their
application.
8. Findings & discussion :
8.1 We have considered the submissions made by the Applicant in their
application for advance ruling as well as the submissions made by Sri. Rishabh
Singhvi, Chartered Accountant, M/s. R. Singhvi & Associates, duly authorised
representative of the applicant during the personal hearing. We have also con-
sidered the issues involved, on which advance ruling is sought by the applicant,
and relevant facts.
8.2 At the outset, we would like to state that the provisions of both the
CGST Act and the KGST Act are the same except for certain provisions. There-
fore, unless a mention is specifically made to such dissimilar provisions, a refer-
ence to the CGST Act would also mean a reference to the same provisions under
the KGST Act.
8.3 The applicant, consequent to winning of the bid for implementation
of ESCO (Energy Saving Contract) project i.e. “Design, Supply, Installation, Test-
ing, Commissioning including operation & maintenance of LED street lights”,
has been awarded ESCO with the responsibility of street lighting with LED fit-
tings in Thane Municipal Corporation (TMC) area, for a period of 7 years.
8.4 The applicant’s responsibilities, pursuant to the aforesaid contract,
include installation, operations & maintenance of the street lights; on & off of the
street lights; repair & replacement of the street lights at their own cost; ensuring
of the street lights operating at the required LUX levels, as prescribed. Non-
functioning of any street light & non-maintenance/operational of the street lights
for the minimum uptime would be subjected to penalty.
8.5 The applicant has to remove the existing lights which are under the
ownership of TMC & hand over the same to TMC and also instal the new street
lights. The new street lights would be under the ownership of the applicant, dur-
ing the tenure of the contract.
8.6 The applicant receives consideration in terms of ‘Energy Savings
Fee’, which is equal to 90% of the actual energy saved multiplied by standard
electricity tariff. The increase of the said fee is based on the escalation of 4% over
the fixed energy tariff. If the realized energy savings are less than 60%, then pen-
alty is levied on the applicant.
8.7 The applicant, in view of the above, contends that the dominant in-
tention of the contract is to render a PURE service and there is no supply of any
goods during the tenure of the contract, as all the goods used in the contract are
under the ownership of the applicant. Further, the activity, being pure service
other than works contract, gets covered under Entry No. 3 of Notification
12/2017-Central Tax (Rate), dated 28-6-2017 as amended, the required conditions
are fulfilled and hence is entitled to the benefit of exemption.
8.8 The applicant further contends that if their activity is considered as
a composite supply & the benefit of exemption under Entry No. 3 supra is not
extended to them, then also they would be entitled for exemption under Entry
No. 3A of the notification supra.
8.9 The applicant, with regard to time of supply, contends that their
contract is in the nature of ‘continuous supply of service’, in terms of Section
2(33) of the CGST Act, 2017, as the contract is for a period exceeding 3 months;

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