AAR: 12% GST Ineligible for the Services of Highway Lighting Systems

The Chhattisgarh Authority for Advance Ruling (AAR), stated, Supply for providing services for the design, engineering, supply, and others of the Highway Lighting System are installation services and is not eligible for 12% GST.

Under Section 98 of the Chhattisgarh GST Act, 2017, an advance ruling sought by M/s HPL Electric and Power Limited mentioned that the petitioner asking for the advance ruling that if the supply was made through it to M/s. Adani Infra (India) Ltd (AIIL) for furnishing services for design engineering etc of Highway Lighting Systems for the project of development, maintenance, and management of four laning in the State of Chhattisgarh, could be treated under Entry 3(iv)(a) of GST Notification No. 11/2017-Central Tax (Rate) and the advantage of the concessional rate of 12% GST could be claimed in relation to the mentioned supply via Applicant to AIIL.

In the present instance, the Applicant and M/s. Adani Infra (India) Ltd. has reached an agreement for the provision of services for the design, engineering, supply, testing on-site, freight and transit insurance, erection, installation, and commissioning and trial run of the Highway Lighting System.

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The applicant argued that the work to be done by them is related to the installation of a highway lighting system and is a necessary component of the project to build, maintain, and administer a four-lane road in the State of Chhattisgarh and is vital for the completion of road is subject to the 12% GST rate since it falls within Entry 3(iv)(a) of Not. No. 11/2017-C.I. (Rate).

A two-member Authority panel made up of Sonal K. Mishra, Joint Commissioner, and Rajesh Kumar Singh, Additional Commissioner, found that the applicant’s proposed supply to AIIL qualifies as “Installation services” because it involves electrical installation services for road illumination. The applicant has been determined to be ineligible for the 12% tax rate as stipulated in entry No.3 (iv) (a) of Notification No. 11/2017 Central Tax (Rate).