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2023 (4) TMI 303 - AAAR - GSTLevy of GST - Benefit of exemption from GST - - manpower services provided to the Central Government, State Government, Local authorities, Governmental authorities and Government entities - Entry No.3 to Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT - The words or a Governmental authority or a Government Entity in the heading Description of services against above referred Entry No.3 has been omitted vide Notification No. 16/2021-Central Tax (Rate) dated 18.11.2021 - for claiming benefit of exemption, is that the term 'in relation to' used in the exemption provided at Entry No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2017. as amended, is very much wide enough to cover every kind of services that results in performance of the functions as mentioned in Article 243 W and 243G of the Constitution of India either directly or indirectly. Therefore the supply of manpower services for housekeeping, cleaning, security, data entry operator etc. to the referred service recipients are eligible for exemption under the above said entry. The manpower supply by the appellant for housekeeping, cleaning, security, data entry operators etc. to various Government departments, mentioned in their application, is not eligible for exemption against Entry No. 3 to Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended. Appeal dismissed.
Issues Involved:
1. Eligibility for GST exemption on manpower services provided to various Government entities under Notification No. 12/2017-Central Tax (Rate). 2. Interpretation of the term "in relation to" in the context of Article 243G and 243W of the Constitution of India. Summary: Issue 1: Eligibility for GST exemption on manpower services provided to various Government entities under Notification No. 12/2017-Central Tax (Rate) The appellant, M/s Sankalp Facilities and Management Services Pvt. Ltd., engaged in providing manpower supply services, sought exemption under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) for services provided to Central Government, State Government, Local authorities, Governmental authorities, and Government entities. The Gujarat Authority for Advance Ruling (GAAR) ruled that: 1. Services provided to Government schools are exempt from GST. 2. GST is applicable on services provided to Government Colleges, Government offices, and Government hospitals. The appellant challenged this ruling, arguing that their services should be exempt under Entry No. 3 of the notification, which covers pure services provided to specified government entities in relation to functions entrusted to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution. Issue 2: Interpretation of the term "in relation to" in the context of Article 243G and 243W of the Constitution of India The appellant contended that the term "in relation to" is broad and should cover all services that enable the performance of functions under Article 243G and 243W, either directly or indirectly. They cited the Supreme Court's interpretation in the case of Doypack Systems P. Ltd. vs. UOI, which held that "in relation to" has a wide amplitude. The GAAR examined 155 work orders and categorized the service recipients into Government Schools, Colleges, Offices, and Hospitals. They extended the exemption to Government Schools under Entry No. 66(b) of the notification but denied it for Colleges, Offices, and Hospitals, stating that the services provided did not relate to functions under Article 243G or 243W. The appellant argued that their services to various State Government departments and authorities should be exempt as they are related to functions under Article 243G and 243W. However, the appellate authority found no basis for this contention, stating that the services provided were consumed within the premises of the government offices and were not related to any activity under the specified articles. The authority concluded that the manpower services provided by the appellant for housekeeping, cleaning, security, data entry operators, etc., to various Government departments are not eligible for exemption under Entry No. 3 of Notification No. 12/2017-Central Tax (Rate). Conclusion: The appeal filed by M/s Sankalp Facilities and Management Services Pvt. Ltd. was rejected, and the ruling of the Gujarat Authority for Advance Ruling was upheld, confirming that the services provided to Government Colleges, Offices, and Hospitals are liable for GST.
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