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2020 (6) TMI 538 - AAR - GSTManpower Supply Services - pure services or not - applicant is of the view that exemption mentioned in Notification No.12/2017-Central Tax (Rate) and Notification No.12/2017-State Tax (Rate) shall be available to the services provided by the applicant on the following work order and GST shall be leviable at NIL rate of tax on supply of pure service made to State Government, Governmental Authority, Governmental Entity and Local Authority - HELD THAT - Since the applicant, at various stages, enters into different agreements with various authorities for provision of services, it is not practical to examine at this stage, each contract, he has entered into with the recipients of services. Further, during the course of providing services, the applicant would also enter into further agreements with the service recipients. It is not possible to foresee the nature of all these agreements at present. Further, there could also be modifications/ amendments in the existing agreements and the nature of service could be subsequently altered. Therefore, the reply to the query raised by the applicant cannot be answered in plain no or yes . The applicant is eligible to claim exemption benefit under Sr.No.3 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 for pure services (supply of manpower, security service) provided to Central Government, State Government, Local Authorities, Governmental Authorities, Government Entities as detailed above subject to the condition that the services provided to these entities mentioned above are provided by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India.
Issues Involved: Eligibility for GST exemption under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017-State Tax (Rate) dated 30.06.2017 for pure services provided to Central Government, State Government, Local Authorities, Governmental Authorities, and Government Entities.
Issue-wise Detailed Analysis: 1. Definition and Scope of Pure Services: The applicant provides manpower services to various government and non-government entities. The core issue is whether these services qualify as "pure services" under the GST exemption notifications. The term "pure services" is interpreted as any supply for consideration where no goods are supplied along with services, thus excluding works contract services or composite supplies involving goods. The applicant's services, which include manpower supply for housekeeping, cleaning, security, and data entry, are considered pure services since they do not involve the supply of goods. 2. Eligibility of Service Recipients: The services must be provided to entities such as the Central Government, State Government, Local Authorities, Governmental Authorities, or Government Entities. Definitions under the CGST Act, 2017, and related notifications are considered to determine eligibility: - Central Government: Defined under Section 2(53) of the CGST Act. - State Government: Defined under Section 2(53) of the Gujarat GST Act. - Local Authority: Includes Panchayats, Municipalities, and other specified bodies. - Governmental Authority: As per Notification No. 32/2017-Central Tax (Rate), includes bodies set up by an Act of Parliament or State Legislature or established by any Government with 90% or more participation by way of equity or control. - Government Entity: Similar to Governmental Authority but includes additional bodies like societies and trusts. 3. Functions Entrusted to Panchayats and Municipalities: The services must be related to functions entrusted to Panchayats under Article 243G or to Municipalities under Article 243W of the Constitution of India. The applicant provided a detailed list of functions under these Articles, such as agriculture, land improvement, water management, rural housing, public health, and urban planning. 4. Specific Contracts and Nature of Services: The eligibility for exemption depends on the nature of services provided under specific contracts. The applicant submitted various work orders to demonstrate compliance: - Gujarat State Nagarik Purvatha Nigam Limited: Services related to the public distribution system. - PGVCL: Services for rural electrification. - Mehsana Municipality: Services for maintenance of community assets and urban amenities. - Ahmedabad Municipal Corporation: Housekeeping services at Kankaria Lake Front. - Sardar Sarovar Narmada Nigam Limited: Services for water management and irrigation. - Bhavnagar Forest Department: Services related to social forestry and environmental protection. - Bhavnagar Collector Office: Services for fundamental administrative functions. Conclusion: The applicant is eligible for GST exemption under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) and Notification No. 12/2017-State Tax (Rate) for pure services provided to specified entities, provided the services are related to functions entrusted to Panchayats or Municipalities under Articles 243G and 243W of the Constitution of India. The eligibility is subject to the nature of services specified in individual contracts. Ruling: The applicant is eligible to claim the exemption benefit for pure services provided to Central Government, State Government, Local Authorities, Governmental Authorities, and Government Entities, subject to the condition that the services are related to functions entrusted to Panchayats under Article 243G or to Municipalities under Article 243W of the Constitution of India.
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