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2019 (10) TMI 944 - AAR - GSTLevy of GST - pure supply - Government entity - service of providing Hydraulic excavator and ten wheeler tippers to transport RDF (inerts) from KCDC processing plant Bommanahalli to Bellahalli Land fill site near Yelahanka) done to government organization - rate of tax - exemption by way of Entry No.3 of the Notification No 12/2017 - Government organisation or not - composite supply of goods and services - HELD THAT - The entire work involves only labour and services and does not involve any goods. It is a composite supply under the meaning of composite supply as defined in section 2(30) of the CGST Act involving only services. It is not a works contract as there is no supply of goods but only a supply of services, even if it is considered as leasing of machineries and vehicles or transportation of goods - Eligibility for exemption by way of Entry No.3 of the Notification No 12/2017 - HELD THAT - It is clear from the nature of work that the activity does not involve any supply of goods but only services - M/s KRIDL is established as a Company by the Government of Karnataka and is entrusted the work of creating assets in the State of Karnataka and hence is not a Governmental Authority as per the definition of the term - also the acivity is an activity related to the solid waste management which is a function entrusted to a Municipality under Article 243W of the Constitution - All the three conditions of notification satisfied - the services provided by the applicant to KRIDL are covered under the entry no.3 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 w.e.f. 25.01.2018. It can be seen from the nature of activity of the applicant that there is no involvement of goods and only services are provided. Further the supply is not a composite supply of goods and services . Hence the activity of the applicant is not covered under entry 3A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 2/2018 - Central Tax (Rate) dated 25.01.2018.
Issues:
1. Whether GST is applicable for providing services to a government organization and at what rate? 2. Whether the service provided to government organizations is exempt under specific notifications? 3. Whether the activity is related to functions entrusted to a municipality and if any GST exemption applies? 4. Determining if the recipient of services is a Governmental Authority or Government Entity for GST exemption. Analysis: Issue 1: The applicant sought clarification on charging GST for providing services to a government organization. The nature of the work involved only labor and services without any goods, constituting a composite supply as per CGST Act. The service provided involved the transportation of waste, and the applicant received payment based on the number of loads transported. Issue 2: The applicant inquired about exemptions under specific notifications for services provided to government organizations. The ruling authority analyzed the conditions under Entry No. 3 of Notification No. 12/2017, which exempts pure services provided to certain entities as specified. The ruling authority concluded that the services provided to KRIDL, a government entity, are covered under this exemption. Issue 3: The applicant questioned if the activity is related to functions entrusted to a municipality and if any GST exemption applies. The ruling authority examined the functions listed under Article 243W of the Constitution, determining that the activity related to solid waste management falls under the functions of a municipality, satisfying the conditions for exemption. Issue 4: The ruling authority evaluated whether the recipient of services, KRIDL, qualifies as a Governmental Authority or Government Entity for GST exemption. KRIDL, being a government undertaking with full control by the State Government, was classified as a Government Entity, meeting the criteria for exemption under the relevant notification. The ruling authority consolidated the applicant's questions into one, addressing the tax rate and exemption eligibility comprehensively. By analyzing the specific notifications and legal definitions, the ruling concluded that the services provided by the applicant to KRIDL are exempt from GST as per Entry No. 3 of the relevant notification. The ruling clarified the applicability of GST exemptions based on the nature of services, recipient classification, and functions related to government entities and municipalities.
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