2022 (8) TMI 809 - AAR - GST

Levy of GST - Rate of GST - Pure services or not - services proposed to be provided by to the Department of Horticulture for cleaning and sweeping of lawns and garden path areas and segregation and transport of the garbage - to the Department of Horticulture for supply of manpower for garden maintenance on outsource basis to the Department of Horticulture - applicability of entry 3 of Notification No. 12 of 2017 (Central Tax Rate), dated 28.06.2017 - HELD THAT - The applicant is providing manpower services for cleaning and sweeping of lawns and garden path areas, segregation and transport of the garbage in Cubbon Park and for maintenance of garden in Siri Horticulture Garden, Ooty, Tamilnadu. This is in relation to function entrusted to a municipality under article 243W of the constitution which is covered by 12th entry of twelfth schedule which says 'Provision of urban amenities and facilities such as parks, gardens, playgrounds'. This manpower services are provided to Horticulture Department, Government of Karnataka. The Applicant is providing services to the state government which is covered by 12 th entry of twelfth schedule of the constitution which says 'Provision of urban amenities and facilities such as parks, gardens, playgrounds'. Thus the applicant satisfies the above two conditions mentioned supra to claim exemption under Entry No. 3 of Notification No.12 of 2017 (Central Tax Rate), dated 28.06.2017.

Summary

Issues Involved:
1. GST liability on services for cleaning and sweeping of lawns and garden path areas, segregation, and transport of garbage.
2. GST liability on services for the supply of manpower for garden maintenance on an outsourced basis.

Detailed Analysis:

Admissibility of Application:
The application is admissible under Section 97(2)(e) of the CGST Act 2017, which pertains to the determination of the liability to pay tax on any goods or services.

Brief Facts of the Case:
The applicant is a proprietorship concern engaged in providing manpower services and proposes to submit a bid for services to the Department of Horticulture, Government of Karnataka. The services include cleaning and sweeping of lawns and garden path areas, segregation and transport of garbage, and supply of manpower for garden maintenance.

Applicant's Submissions:
1. Nature of Services: The proposed services involve cleaning, sweeping, garbage segregation, and manpower supply for garden maintenance.
2. Pure Services: The applicant contends that these services qualify as "pure services" as they do not involve any transfer of property in goods.
3. Government Definition: The Department of Horticulture is considered a government entity under Section 2(53) of the KGST Act, 2017.
4. Notification 12/2017: The applicant refers to Notification 12/2017 Central Tax (Rate), which exempts pure services provided to the government in relation to functions entrusted to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution.

Personal Hearing:
The authorized representative reiterated the facts during the personal hearing held on 07-07-2022.

Findings & Discussion:
1. Examination of Services: The services proposed include cleaning and sweeping of lawns, segregation and transport of garbage, and supply of manpower for garden maintenance.
2. Notification 12/2017 Analysis: Entry No. 3 of Notification 12/2017 (Central Tax Rate) exempts pure services provided to the government in relation to functions entrusted to Panchayats or Municipalities under Articles 243G and 243W of the Constitution.
3. Conditions for Exemption:
- The services must be pure services (excluding works contract or composite supplies involving goods).
- The services must be provided to the Central Government, State Government, Union territory, local authority, or a Governmental authority.
- The services must relate to functions entrusted to Panchayats under Article 243G or Municipalities under Article 243W.
4. Constitutional Provisions: Article 243W and the Twelfth Schedule list functions such as urban amenities, including parks and gardens, which are relevant to the services provided by the applicant.

Conclusion:
The applicant's services satisfy the conditions for exemption under Entry No. 3 of Notification 12/2017 (Central Tax Rate).

Ruling:
1. Cleaning and Sweeping Services: The services proposed for cleaning and sweeping of lawns, garden path areas, segregation, and transport of garbage are liable for GST at NIL rate as per Entry No. 3 of Notification 12/2017 (Central Tax Rate).
2. Manpower Supply Services: The services proposed for the supply of manpower for garden maintenance on an outsourced basis are liable for GST at NIL rate as per Entry No. 3 of Notification 12/2017 (Central Tax Rate).