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2020 (12) TMI 797 - AAR - GSTService of providing providing labour to the Municipal Corporation, Government Offices, Government Ashrams, and Government Medical Collage and hospitals - applicant is mainly supplying manpower and only in the case of Government Ashram school, applicant is providing goods in the form of vegetable and mutton as per the contract executed - Whether the supply of impugned services like; supply of staff for cleaning the District Collector s office premises; providing manpower in the form of skilled assistants and technicians, to Hospitals and Dispensaries run by Government medical college, are covered under clause 1 2 of Twelfth Schedule of Article 243W? - HELD THAT - Applicant, is running a society of labour belonging to the economically weaker sections of society, having certain objectives as cited supra in applicant s submission. As per the submissions, applicant is mainly engaged in providing labour to the Municipal Corporation, Government Offices, Government Ashrams, and Government Medical Collage and hospitals and all the activities carried out by them directly or indirectly, helps the Municipal Corporation to achieve its objective listed in Maharashtra Municipal Corporation Act, 1966 - On the perusal of the work orders, it is seen that applicant is mainly supplying manpower and only in the case of Government Ashram school, applicant is providing goods in the form of vegetable and mutton as per the contract executed. Clause No. 1 and 2 are related to Urban planning including town planning and Planning of land - use and construction of buildings, which are totally different from the applicant s supply of services. The applicant is supplying manpower for specific purposes like computer work, cleaning of office premises, security, skilled and unskilled labour, etc. - such supply of services and goods cannot be said to be related to functions specified under Clause land 2 of the 12th Schedule. Applicant has not provided manpower in relation to any urban planning or planning of land-use and construction of building. Further, the applicant has not brought on record as to how their supply is in furtherance of functions specified in the above mentioned Clause 1 and 2. Hence it is felt that, such subject supply is out of purview of the scope of Clause 1 and 2 of 12th Schedule of Article 243 W of the Constitution, as functions entrusted to Municipality. Whether the meals provided to Government Ashrams for economically weaker class of students fall within Clause 1 2 of the Twelfth Schedule of Article 243W? - HELD THAT - It is seen that Clause 1 2 of the 12th Schedule enumerates certain functions to be undertaken by a Municipality in relation to and including Urban planning including town planning and Planning of land - use and construction of buildings. First of all the applicant is not supplying any meals, in fact their submissions reveal that they are only supplying vegetables and mutton which cannot be considered as meals. Further such supply can in no way be correlated with the functions mentioned under Clause 1 2 of the 12th Schedule and therefore we hold that supply of vegetables and mutton are not covered under the said Clauses 1 2. Whether the services provided by them fall under the Entry No. 3 of Exemption Notification No. 12/2017 dated 28th June, 2017, as amended, since the said services are in the nature of pure labour services? - HELD THAT - To the Residential Deputy Collector and Collector office, Amravati, applicant is providing labour for cleaning of office premises. Applicant is also providing security guard for security purposes. While the services of manpower supply as submitted by the applicant, can be considered as pure services and the Collector office can be considered as State Government office, the applicant has not made submissions to show that the functions being undertaken are activities carried out in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution - Similarly in the case of supply of security guards to the Department of District Mahila and child development, Amravati (State Govt.); supply skilled and unskilled staff to the Divisional Commissioner, for Divisional Krida Sankul Samiti, Amravati (state level) for the samiti office; the applicant has not made submissions to show that the functions being undertaken by them are activities in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution. The applicant also provides manpower for computer working to the Amravati Municipal Corporation (AMC). The AMC is a Municipality and certain functions are entrusted to it under Article 243W of the Constitution. Municipal Corporations undertake a lot of work pertaining to their jurisdiction and are liable to pay GST wherever functions are undertaken which does not find mention under 11th Schedule. Hence in absence of such information we find that the applicant will not be eligible for exemption under Entry No. 3 of Exemption Notification No. 12/2017 dated 28th June, 2017. All the issues are answered in negative.
Issues Involved:
1. Coverage of services under Clause 1 & 2 of Twelfth Schedule of Article 243W. 2. Classification of meals provided to Government Ashrams under Clause 1 & 2 of Twelfth Schedule of Article 243W. 3. Applicability of Exemption Notification No. 12/2017 (Entry No. 3) for pure labour services. Issue-Wise Detailed Analysis: 1. Coverage of Services under Clause 1 & 2 of Twelfth Schedule of Article 243W: The applicant, a cooperative society, provides various services including labour to municipal corporations and government institutions. The primary question was whether these services, such as supplying cleaning staff, data entry operators, and security guards, fall under Clause 1 & 2 of the Twelfth Schedule of Article 243W. Clause 1 pertains to urban planning including town planning, and Clause 2 pertains to planning of land-use and construction of buildings. The Authority found that the services provided by the applicant, such as manpower for cleaning, security, and computer work, do not relate to urban planning or land-use planning. Therefore, these services are not covered under Clause 1 & 2 of the Twelfth Schedule of Article 243W. 2. Classification of Meals Provided to Government Ashrams: The second issue was whether the meals provided to Government Ashrams for economically weaker students fall within Clause 1 & 2 of the Twelfth Schedule of Article 243W. The Authority noted that the applicant was not providing meals but rather supplying vegetables and mutton. These supplies cannot be correlated with urban planning or land-use planning functions under Clause 1 & 2. Therefore, the supply of vegetables and mutton does not fall within these clauses. 3. Applicability of Exemption Notification No. 12/2017 (Entry No. 3) for Pure Labour Services: The third issue was whether the services provided by the applicant qualify for exemption under Notification No. 12/2017 (Entry No. 3), which exempts pure services provided to government entities in relation to functions entrusted to Panchayats under Article 243G or Municipalities under Article 243W. The Authority examined various work orders and found that: - The supply of labour for cleaning and security to the Collector's office and other state government offices does not show a direct relation to functions under Article 243G or 243W. - The supply of staff to Government Medical Colleges and Hospitals is not covered under the 11th or 12th Schedule. - The supply of manpower for computer work to the Amravati Municipal Corporation (AMC) was not clearly shown to be related to functions under Article 243W. Therefore, the services provided by the applicant do not qualify for the exemption under Entry No. 3 of Notification No. 12/2017. Conclusion: The Authority concluded that: - The services provided by the applicant are not covered under Clause 1 & 2 of the Twelfth Schedule of Article 243W. - The supply of vegetables and mutton to Government Ashrams does not fall within Clause 1 & 2 of the Twelfth Schedule of Article 243W. - The services provided by the applicant do not fall under the Exemption Notification No. 12/2017 (Entry No. 3) as they are not in the nature of pure labour services related to functions entrusted under Article 243G or 243W. Order: The questions raised by the applicant were all answered in the negative.
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