2021 (7) TMI 545 - AAR - GST

Levy of GST - landscaping and gardening work provided to government departments like Nagarasabha Karyalaya Chintamani, Nagarasabha Karyalaya Bhadravathi, Tumakuru Mahanagara Palike, Nagarasabha Raichur, Purasabha Karyalaya Devanahalli, Mahanagara Palike Shivamogga etc. - HELD THAT - The transaction in question is examined and it is found that the applicant is executing two types of works, wherein in one set of cases the applicant is making supply of pure services without it being a works contract services or composite supply and in the second category of supply, the applicant is providing composite supply of both goods and services. The first set of activities is covered under entry no.3 of the N/N.12/2017 - Central Tax (Rate) dated 28.06.2017 and the same is clarified as exempt in the advance ruling in IN RE M/S. THE NURSERY MEN CO-OPERATIVE SOCIETY, 2018 (9) TMI 1037 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA . The activity of the applicant in relation to the supplies which are involving goods either as a works contract or as a composite supply involving supplies of goods also, the activity gets exempted as per entry 3A of the N/N.12/2018 -Central Tax (Rate) dated 28.06.2017 as amended by N/N. 02/2018 - Central Tax (Rate) dated 25-01-2018 - Subject to the facts that all the conditions as per entry 3A, are said to be satisfied, the activity of the applicant is exempted under entry 3A of the N/N.12/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No.2/2018 - Central Tax (Rate) dated 25.01.2018. The activity of maintenance of community assets carried out by the applicant is falls under entry no 29 of Schedule eleven of Article 243G of the Constitution; that the provision of urban amenities and facilities such as parks, gardens, playgrounds falls under entry No 12 of Schedule Twelve of Article 243W of the constitution.

Summary

Issues:
1. Admissibility of the application for Advance Ruling.
2. Whether landscaping and gardening work provided to government departments attracts GST.

Admissibility of the application for Advance Ruling:
The applicant filed for Advance Ruling under Section 97 of the CGST Act and KGST Act, discharging the required fee. The question raised pertains to the liability to pay tax on goods or services, making it admissible under Section 97(2)(e) of the CGST Act 2017.

Landscaping and Gardening Work Tax Liability:
The applicant engages in landscaping and gardening work for government departments, seeking clarity on whether GST applies to these services. The applicant detailed the nature of work executed for various government departments, including procurement of plants, maintenance of parks, and installation of children's playing equipment.

Discussion on Exemption Criteria:
The applicant claimed exemption under Notification No. 12/2017 - Central Tax (Rate) for composite supply of goods and services where the value of goods does not exceed 25% of the total supply value. They argued that their services fall under activities entrusted to Panchayats and Municipalities as per the Constitution.

Analysis of Exemption Conditions:
The Authority examined the applicant's activities and differentiated between pure services and composite supply. For the latter, they assessed compliance with entry no. 3A of Notification No. 12/2018 - Central Tax (Rate), emphasizing conditions related to the value of goods supplied, recipient entities, and functions entrusted to Panchayats or Municipalities.

Ruling and Conclusion:
After thorough deliberation, the Authority ruled that the landscaping and gardening work provided to specific government departments is exempted under the mentioned notification, subject to conditions such as the value of goods not exceeding 25% of the total contract value and the recipients being Central or State Government Departments or local authorities. This decision aligns with the exemption criteria outlined in the relevant notifications.