Page 153 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : KARNATAKA SOLAR POWER DEVELOPMENT CORPORATION LTD. 479
of Notification No. 12/2017-C.T. (Rate) not applicable in the impugned activity,
as it does not qualify to be a pure service provided to any Central Government,
State Government or Union territory or local authority or a Government entity
under Articles 243G or 243W of Constitution of India. [para 10]
Supply - Payments made at the direction of Committee, formed for Lo-
cal Area Development - Collection of amounts towards LAD funds by appli-
cant which form part of value of lease/rental services provided by the appli-
cant to the SPDs - Committee merely decides the usage of said fund for the
specific intended purpose and applicant makes the payments accordingly -
Committee merely gives direction to the applicant which is not a transaction
involving a supply of goods or services or both and not receiving any consid-
eration for the said directions and is not in the course or furtherance of busi-
ness - Therefore activity of giving direction by Committee not amounts to
supply of any service in terms of Section 7(1)(a) of Central Goods and Services
Tax Act, 2017 - Entry No. 5 of Notification No. 13/2017-C.T. (Rate) not applica-
ble. [paras 11.2, 11.3]
Ruling in favour of department
REPRESENTED BY : Shri Ganesh S., Advocate, for the Assessee.
[Order]. - M/s. Karnataka Solar Power Development Corporation Lim-
ited, (called as the ‘Applicant’ hereinafter), South Block, Beeja Raja Seed Com-
plex, II Floor, Bellary Road, Hebbal, Bengaluru-560 024, Karnataka, having
GSTIN Number 29AAFCK7685P1ZF, have filed an application for Advance Rul-
ing under Section 97 of CGST Act, 2017 & KGST Act, 2017 read with Rule 104 of
CGST Rules, 2017 & KGST Rules, 2017, in Form GST ARA-01 discharging the fee
of Rs. 5,000/- each under the CGST Act and the KGST Act.
2. The applicant is a joint venture company of M/s. Solar Energy Cor-
poration of India (SECI), Government of India and Karnataka Renewable Energy
Development Limited (KREDL) of Government of Karnataka, formed, on 12-3-
2015, to establish 2000 MW solar park in Tumkur District of Karnataka. They ob-
tained lands on lease basis from the farmers of 5 villages for a period of 28 years
and sub-let the said lands to the Solar Power Developers (SPD) to install the solar
panels for generation of solar power, for 28 years.
3. The said project is approved by the Ministry of New & Renewable
Energy (MNRE) and as per its guidelines, after commissioning of solar projects
by SPDs, an amount of Rs. 5,00,000/- per MW should be collected in 5 equal
yearly instalments of Rs. 1,00,000/- each by the Applicant, from SPDs, towards
Local Area Development Fund, intended to rehabilitation of the affected area.
The fund is kept in a separate account as Local Area Development Fund by SPPD
i.e. the applicant.
4. A committee under the chairmanship of District Commissioner,
Tumkur, in which the CEO of the applicant is a member convener, carries on the
local area development works of the said 5 villages under village panchayats, as
per the guidelines of MNRE, on utilisation of the said fund. The rehabilitation
work would be in the nature of laying of metal roads, area drainage, schools,
dispensaries, community centre, water supply, education etc.
5. The applicant has to collect the amounts towards the said fund, as
600 MW has been commissioned. The applicant submits that the said fund is not
related to any supply made by the applicant to the SPDs, not an income to the
GST LAW TIMES  23rd April 2020  273