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2023 (1) TMI 287 - AAR - GSTRate of GST - requirement of defining the terms Central Government , State Government'', Union Territory and Local Authority - N/N. 11/2017 Central Tax (Rate), on 28 th June 2017 - service recipient - Classification of the Agencies listed out being Corporation or Government Organizations into Central Government, State Government, Union Territory, local authority, Government Authority or a Government Entity - HELD THAT - For availing the benefit as stipulated supra at S.no. 3(iii)(b), S.no. 3 (vi)(b) and S.no. 3 (vi)(c) ibid of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended, all the conditions mentioned therein has to be necessarily fulfilled. As regards the request of seeking clarification as to whether corporations and departments working under various Ministries of Central Government, State Governments and Union Territory would form part of Central Government/ State Government/ Union territory or Local Authority, it is quite evident that various departments functioning directly under the Central / State Government /Union territory in their own capacity would form part of the respective Governments whereas corporations per se cannot be generalized as being Central / State Government, and they can be treated as other entities viz. Governmental authority, Government Entity etc. as defined in the statute, subject to fulfillment of conditions as mentioned in the definitions / statute. Service recipient - If an organization has awarded their company a contract but the said organization is entrusted by a Ministry/ Department of Government to float the tender and award the work to the eligible Contractor, then who will be deemed to be the services recipient, Government or the organization? - HELD THAT - The definition under Section-2(93) of the CGST Act, 2017 stipulates regarding the service recipient viz. recipient of the supply of goods or services is someone who is liable for payment of consideration for the supply of goods or services. If no consideration is payable, the person to whom the goods are delivered or made available, or uses the goods or services shall qualify as the recipient. Classification of the Agencies listed out being Corporation or Government Organizations into Central Government, State Government, Union Territory, local authority, Government Authority or a Government Entity - HELD THAT - As classification of entities, that too functional at a place outside the jurisdiction of the State of Chhattisgarh is not within the scope and purview of advance rulings under Section 98 ibid read with Section 97(2), this authority is not in a position to pass any ruling regarding the status of the said entities as being a Corporation or Government Organizations into Central Government, State Government, Union Territory, local authority, Government Authority or a Government Entity. Even otherwise, this authority is of the view that without having the incorporation details / certificate of incorporation and their financial / commercial and business details, it would not be possible to arrive at a conclusive decision regarding their status.
Issues Involved:
1. Definition of "Central Government," "State Government," "Union Territory," and "Local Authority." 2. Identification of the service recipient when a contract is awarded by an organization instructed by a government ministry. 3. Classification of specific agencies as Central Government, State Government, Union Territory, local authority, Government Authority, or Government Entity. Detailed Analysis: 1. Definition of "Central Government," "State Government," "Union Territory," and "Local Authority": The applicant sought clarification on the definitions of these terms as they are not explicitly defined in the CGST Act, 2017. The ruling clarified that: - As per Section 2(53) of the CGST Act, "Government" means the Central Government. - As per Section 2(53) of the CGGST Act, "Government" means the Government of Chhattisgarh. - As per Section 2(114), "Union territory" includes specified territories such as Andaman and Nicobar Islands, Lakshadweep, etc. - As per Section 2(69), "local authority" includes a Panchayat, Municipality, Municipal Committee, Zilla Parishad, District Board, Cantonment Board, Regional Council, Development Board, or a Regional Council constituted under article 371A of the Constitution. - "Governmental Authority" and "Government Entity" are defined under Notification No. 12/2017-Central Tax (Rate) and subsequent amendments, specifying entities set up by an Act of Parliament or State Legislature with 90% or more participation by way of equity or control. The ruling concluded that departments directly under the Central/State Government/Union Territory form part of the respective governments, while corporations cannot be generalized as being part of the Central/State Government and can be treated as other entities like Governmental Authority or Government Entity subject to fulfilling specific conditions. 2. Identification of the Service Recipient: The applicant sought clarification on who would be deemed the service recipient when a contract is awarded by an organization instructed by a government ministry. The ruling referred to Section 2(93) of the CGST Act, 2017, which defines the recipient of supply as: - The person liable to pay consideration for the supply of goods or services. - If no consideration is payable, the person to whom the goods are delivered or made available, or to whom the service is rendered. Thus, the service recipient is the entity liable to pay the consideration for the supply of goods or services. 3. Classification of Specific Agencies: The applicant requested the classification of specific agencies into Central Government, State Government, Union Territory, local authority, Government Authority, or Government Entity. The ruling emphasized that: - Classification of entities outside the jurisdiction of Chhattisgarh is beyond the scope of advance rulings under Section 98 read with Section 97(2) of the CGST Act. - Without incorporation details, certificates of incorporation, and financial/commercial/business details, it is not possible to determine their status. Order: The ruling concluded: 1. Definitions of "Central Government," "State Government," "Union Territory," and "Local Authority" are provided under Section 2 of the CGST Act, 2017. Departments under various ministries form part of the respective governments, while corporations are treated as other entities subject to specific conditions. 2. The service recipient is defined as the entity liable to pay consideration for the supply of goods or services as per Section 2(93) of the CGST Act, 2017. 3. Classification of entities outside Chhattisgarh's jurisdiction is beyond the scope of advance rulings, and without necessary details, no ruling can be provided on their status.
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