9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (10) TMI 1389 - AAR - GSTServices by way of Independent Consultancy Services provided or to be provided by the Applicant to Public Works Department, Gurgaon as per Request for Proposal (REP) (submitted with this Authority) for design, Engineering, Finance, Construction, Operation and Maintenance of Gurgaon- Faridabad and Ballabhgarh-Sohna Roads on BOT basis - Pure Services or not - Public Works Department (PWD), Haryana - Government Entity or not - Whether the pure services received by the PWD fall under Serial No. 3 of Notification No. 12/2017 Central Tax (rate) dated 28.06.2017? - whether, the Applicant is within its rights under the CGST and HGST Acts for charging GST to the Service Recipient on the service value for the services provided as per RFP or not? HELD THAT - Although Pure services have not been defined under the Goods and Services Tax Act, 2017, but it is meant to mean supply of services without involving any supply of goods. Entry No. 3 of Notification 12/2017- Central Tax (rate) dated 28.06.2017 lends weight to this definition, whereby the works contract services and composite supplies involving supply of any goods are excluded from pure services - The engineering consultancy services which involve preparation of detailed project report, city development plans, designs and drawings and supervision thereof, for projects in different parts of the country for construction of Roads and Bridges, Solid Waste Management, Water Supply and Sanitation, Urban Development, Buildings and Environment offered by the applicant does not involve any supply of goods and such it is a pure service . Government Entity , as per Section 2(zfa) of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, means an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90%. or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a Local Authority. - The Public Works Department, Haryana is a Department of the State Government, established by the State Government, with the state having full control over its functioning and is carrying out functions entrusted by the State Government. Thus, the Public Works Department, Haryana is a Government Entity as per the definition of Government Entity as contained under Section 2(zfa) of the Notification No. 12/2017 Central Tax (Rate), dated 28.06.2017. Both the Municipalities and Panchayats have their territorial jurisdiction. They do not exercise extra-territorial jurisdiction - The engineering services offered/ provided by the applicant to the PWD, a department of the State Government, are with respect to Gurgaon-Faridabad and Ballabhgarh- Sohna roads, which are beyond the territorial limits of a Panchayat or Municipality, as has been admitted by the applicant in its written submission. As such the services of the applicant are not in relation to functions entrusted to the Panchayats or the Municipalities under the XI or the XII Schedule of the Constitution of India, as the case may be.
Issues Involved:
1. Whether the services provided by the Applicant to Public Works Department, Gurgaon are activities in relation to functions entrusted to Panchayat or Municipality under Article 243G or Article 243W of the Constitution of India. 2. Whether the services qualify as Pure Services exempt from CGST and SGST under Notification No. 12 of 2017. 3. If not exempt, whether the Applicant is within its rights to charge GST on the service value. Issue-wise Detailed Analysis: 1. Relation to Functions Entrusted to Panchayat or Municipality: The Applicant, a foreign company, provides independent engineering consultancy services for projects such as roads and bridges, solid waste management, water supply, and urban development. The services in question pertain to the design, engineering, finance, construction, operation, and maintenance of Gurgaon-Faridabad and Ballabhgarh-Sohna Roads on a BOT basis. The Applicant contended that these services are not within the functions of Panchayats or Municipalities as outlined in Articles 243G and 243W of the Constitution. The Authority concluded that the services provided are for district roads beyond the territorial limits of Panchayats and Municipalities. Therefore, these services do not fall under the functions entrusted to Panchayats or Municipalities. 2. Qualification as Pure Services for Exemption: The Applicant argued that their services qualify as "pure services" under Entry No. 3 of Notification No. 12/2017 - Central Tax (Rate), which exempts pure services provided to government entities for functions entrusted to Panchayats or Municipalities. The Authority examined the definition of "pure services" and confirmed that the Applicant's services do not involve the supply of goods, thus qualifying as pure services. However, since the services are not related to functions under Articles 243G and 243W, the exemption does not apply. 3. Charging GST: Given the above findings, the Authority ruled that the Applicant is legally bound to charge GST on the services provided. The services do not meet the criteria for exemption under Notification No. 12/2017 - Central Tax (Rate) as they are not related to the functions of Panchayats or Municipalities. Therefore, the Applicant must charge GST under the CGST and HGST Acts. Ruling: 1. The services provided by the Applicant to the Public Works Department, Gurgaon, for the specified road projects are not activities related to functions entrusted to Panchayats or Municipalities under Articles 243G or 243W of the Constitution of India. 2. The services qualify as pure services but are not exempt from GST under the relevant notification. 3. The Applicant is within its rights and legally obligated to charge GST on the service value under the CGST and HGST Acts. Ordered accordingly. To be communicated.
|
