2022 (8) TMI 44 - AAR - GST

Levy of GST - Pure services provided by the applicant in the manner of Implementation Support Agency (ISA) Services under JAL JEEVAN MISSION (JJM) for PHE Department in Kargil District under the Administration of Union Territory of Ladakh on behalf of State Water and Sanitation Mission (SWSM) - such activity is covered under SI.No.3, Chapter 99 of Notification No. 12/2017-Central Tax(Rate) dated 28.06.2017 and such services are thus NIL rated without applicability of GST being by way of activity in relation to any function entrusted to a Panchayat under article 243 G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution, or not? HELD THAT - The first condition or the entry given in column 3 is that the services provided should be pure services (Excluding work contract service or other composite supplies involving supply of any goods). On carefully going through the notice issued by the recipient for expression of interest (EOI) and the agreement signed between applicant and recipient of the service. The introductory part of EOI and Para 5.0 of EOI and also Para 5.3 of the agreement. From plain reading of these clauses reflects that the supplier has to supply pure services like manpower, technical experts etc and no supply of goods is involved in the said work. The second condition of the said entry is that the pure services(Excluding work contract service or other composite supplies involving supply of any goods) provided to the central government, state government or union territory or local authority or government entity. The copy of EOI and the agreement provided by the applicant along with the application indicates that the recipient of the supply is Public Health Engineering (PHE) department of the Administration of Union Tertiary of Ladakh which is a department of Union Tertiary. The third condition of the said entry is 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 EOI and agreement provided along with the application shows that the supplier has to perform their activities in 15 administrative blocks (names are given in the EOI and the agreement). The work entrusted to the supplier is covered under in relation to entry number 11 of article 243G and entry number 5 of article 243W of the constitution. Thus, the supply being provided by the supplier from its principle business place i.e. Bhopal to Union Territory of Ladakh is covered under under S.No. 3 of notification 12/2017-Central Tax Rate 28.06.17 and hence it is NIL rated.

Summary

Issues:
- Whether pure services provided by the applicant under JAL JEEVAN MISSION for PHE Department in Kargil District are covered under Notification No. 12/2017-Central Tax(Rate) dated 28.06.2017 and are thus NIL rated without applicability of GST.

Analysis:
1. Background and Submission by Applicant: The applicant, registered in Bhopal, provided consultancy services for Implementation Support Agency (ISA) under JAL JEEVAN MISSION in Ladakh without supplying goods. The applicant sought an Advance Ruling on the applicability of GST on these services.

2. Department's View: The jurisdictional officer viewed the services as taxable under SI.No. 3 of Notification No. 9/2017 Integrated Tax (Rate) dated 28/06/2017.

3. Discussions and Findings: The Authority considered the applicant's submissions and the Department's view. The applicant claimed that their services fall under S.No. 3 of Notification 12/2017-Central Tax Rate 28.06.17.

4. Legal Provisions: Entry 3 of Notification No.12/2017-Central Tax (Rate) exempts pure services provided to Central/State/Union Territory/local authorities by way of activities related to functions entrusted to Panchayats or Municipalities under the Constitution.

5. Interpretation of Legal Provisions: The Authority analyzed the functions entrusted to Panchayats and Municipalities under the Constitution, specifically focusing on the Eleventh and Twelfth Schedules detailing various functions.

6. Decision and Ruling: The Authority ruled that services provided by the applicant from Bhopal to Ladakh fall under S.No. 3 of the notification, making them NIL rated for GST purposes. The ruling is valid unless declared void under relevant sections of the GST Act.