2022 (12) TMI 952 - AAR - GST

Benefit of N/N. 12/2017 - KUIFDC, an intermediary agency between ULBs/Town Municipal Councils functioning as Programme Management Unit (PMU) through the divisional offices, implementing agencies of the Local Government Bodies and State Line Departments in the efficient monitoring of sub-programmes - amicable settlement - Government Entity or not - HELD THAT - The applicant provided consultancy services to KUIDFC for the program called NKUSIP, involving supervision and programme management consultancy for the PMC works undertaken in divisions of Bellary and Gulbarga. Accordingly, the applicant entered into an agreement dated 26.07.2017 and completed the project during 2019. The instant application was filed on 08.11.2022, after completion of the said project in 2019, as the applicant intends to seek clarity as to whether services rendered to KUIDFC are exempted from GST or not. In the instant case the maintainability of the application needs to be examined. It is pertinent to mention here that the word being is the present participle of the verb be and used to form tenses in the progressive (or continuous) aspect. A present participle is a verb form (or verbal) made by adding-ing to the base that often functions as an adjective. Use of present participle denotes present and continuing action. Thus the phrase 'being undertaken' refers to an ongoing and continuous supply. In the instant case the questions, on which the applicant seeks advance ruling, are not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the said applicant, but in relation to a completed supply, provided by them. Therefore the instant application is beyond the jurisdiction of this authority and hence is liable for rejection. The application filed by the Applicant for advance ruling is rejected, in terms of Section 98(2) of the CGST Act 2017.

Summary

Issues:
1. Whether KUIFDC is eligible for GST exemption under Notification No.12/2017 for services provided by the applicant from July 2017 to June 2019.
2. Whether the services provided by the applicant as Supervision and Programme Management Consultants for the NKUSIP program of KUIFDC are exempt from GST under pure services category.

Analysis:

Issue 1:
The applicant, a premier society providing consultancy services, sought an advance ruling on the eligibility of KUIFDC for GST exemption under Notification No.12/2017. KUIFDC, a State Level Nodal Agency, acts as a financial intermediary providing funds and technical assistance to Urban Local Bodies. The applicant claimed that KUIFDC qualifies as a "Government Entity" under Notification No.32/2017 due to its shareholding structure and functions. However, there was a contention that KUIFDC, being constituted under the Companies Act, may not be directly exempted as a Government Body. The applicant's interpretation emphasized KUIFDC's role and composition to support their claim for exemption.

Issue 2:
The applicant provided consultancy services to KUIFDC for the NKUSIP program, involving supervision and project management. The applicant entered into an agreement with KUIFDC and completed the project by 2019. The applicant inquired whether the services rendered to KUIFDC are exempt from GST. The Authority examined the maintainability of the application as per Section 95(a) of the CGST Act 2017. It was noted that the questions raised were related to completed supplies, not ongoing transactions. Therefore, the application was deemed beyond the authority's jurisdiction and rejected under Section 98(2) of the CGST Act 2017.

This judgment highlights the importance of the timing of seeking advance rulings in relation to ongoing or completed transactions. The interpretation of legal provisions and notifications played a crucial role in determining the eligibility for GST exemption. The ruling underscores the need for clarity in the application process and aligning the queries with the scope of the authority's jurisdiction.