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2021 (11) TMI 225 - AAR - GSTExemption from GST or not - services provided to Samaj Kalyan Department, State Government of Maharashtra (Social Welfare Department) for residential accommodation of underprivileged girls - applicability of TDS provisions in case where the supply of services is exempt - Applicant is not registered under GST and provide services to Social Welfare Department (Soma Kalyan Department), a Department of State Government - entitlement to refund if TDS is deducted. Whether the services provided by the applicant to Samaj Kalyan Department, State Government of Maharashtra (Social Welfare Department) for residential accommodation of underprivileged girls is exempt from GST? - HELD THAT - Even though the applicant as per her submission is supplying Pure Services, in light of insufficient material on record, it is not possible to find whether the said services are supplied by the applicant by way of any activity 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 renting of immovable property services by the applicant is not liable for exemption under the provisions of Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017. Whether TDS provisions will be applicable in case where the supply of services is exempt? - HELD THAT - The impugned services supplied by the applicant are liable to tax and therefore not exempt. Thus the TDS provisions under the relevant section 51 of the GST Act are applicable in the subject case. As the Applicant is not registered under GST and provide services to Social Welfare Department (Samaj Kalyan Department), a Department of State Government, then whether TDS notification issued under section 51 would be applicable for deduction of TDS? - HELD THAT - TDS notification issued under section 51 would be applicable for deduction of TDS in the subject case. In case TDS is deducted, whether applicant would be entitled for refund of the same? - HELD THAT - The said question pertains to entitlement of refund and is not covered under Section 97 of the CGST Act, 2017 and therefore we refrain from answering this question.
Issues Involved:
1. Exemption of services provided to the Social Welfare Department from GST. 2. Applicability of TDS provisions on exempt services. 3. Applicability of TDS notification for an unregistered supplier under GST. 4. Entitlement to refund of TDS deducted. Detailed Analysis: Issue 1: Exemption of Services Provided to the Social Welfare Department from GST The applicant sought clarification on whether the services provided to the Samaj Kalyan Department, State Government of Maharashtra for residential accommodation of underprivileged girls are exempt from GST. The applicant argued that the services fall under "pure services" as defined in Notification No. 12/2017-C.T. (R) dated 28.06.2017, which exempts services provided to the government by way of any activity related to functions entrusted to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution. The authority examined the conditions for exemption under the notification: 1. The service should be a "pure service." 2. The service should be provided to the Central Government, State Government, local authority, or a Governmental authority. 3. The service should be related to functions entrusted to a Panchayat or Municipality under the respective Articles of the Constitution. The authority concluded that while the applicant's service qualifies as a "pure service" and is provided to a State Government department, there was insufficient evidence to establish that the service is related to functions entrusted under Articles 243G or 243W. Consequently, the services provided by the applicant are not exempt from GST. Issue 2: Applicability of TDS Provisions on Exempt Services The applicant questioned whether TDS provisions apply when the supply of services is exempt. Since the authority determined that the services provided by the applicant are not exempt from GST, it held that the TDS provisions under Section 51 of the GST Act are applicable in this case. Issue 3: Applicability of TDS Notification for an Unregistered Supplier under GST The applicant, being unregistered under GST, sought clarity on whether TDS notifications issued under Section 51 would apply. The authority affirmed that TDS provisions are applicable even if the supplier is unregistered, provided the services are taxable. Issue 4: Entitlement to Refund of TDS Deducted The applicant asked if they would be entitled to a refund of TDS deducted. The authority refrained from answering this question, stating that entitlement to a refund is not covered under Section 97 of the CGST Act, 2017. Conclusion: 1. The services provided by the applicant to the Samaj Kalyan Department are not exempt from GST. 2. TDS provisions apply to the services provided by the applicant. 3. TDS notification under Section 51 is applicable for deduction of TDS even if the applicant is not registered under GST. 4. The question regarding the refund of TDS deducted was not addressed.
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