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2024 (4) TMI 842 - AAR - GSTExemption from GST - exempt supplies or not - contract (excluding works contract service or other composite supplies involving supply of any goods) - supply of Teachers and Lecturers to BBMP schools and colleges on outsourcing basis - bills can be raised to BBMP without CGST and SGST - taxability under GST for supply of teachers/Lecturers to the schools of BBMP on outsourced basis - HELD THAT - The impugned services are being supplied to the BBMP, a division in the Bruhat Bengaluru Mahanagara Palike which is Bangalore City Corporation, established under Karnataka Municipal Act 1976 and now working under The Bruhat Bengaluru Mahanagara Palike Act 2020. The constitution of BBMP is a municipality by virtue of Article 243 Q of the Constitution of India and thus to be considered as Municipality as defined under Article 243 P of the Constitution of India. Thus it qualifies to be a Local Authority as defined under Section 2(69) of the CGST Act 2017. The impugned services of supply of teachers/lecturers is meant for imparting education to the students and hence it is part of promotion of educational aspects. Thus the impugned services are provided by way of an activity in relation to the function of promotion of educational aspects entrusted to the Municipality (BBMP) under article 243W of the Constitution. The service of supply of teachers/lecturers to schools/colleges run by BBMP, on outsource basis is covered under pure services being provided to a local authority (BBMP) by way of an activity in relation to a function Promoting educational aspects entrusted to a Municipality under article 243W of the Constitution of India and hence are exempted in terms of entry number 3 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, as amended.
Issues Involved:
1. Exemption of GST on the supply of teachers and lecturers to BBMP. 2. Applicability of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. 3. Classification of services provided by the applicant. 4. Determination of the applicant's tax liability under GST. Summary: Issue 1: Exemption of GST on the supply of teachers and lecturers to BBMP The applicant, M/s. Crystal Infosystems and Services, provides teachers and lecturers to BBMP schools and colleges on an outsourcing basis. The applicant contends that these services are pure services with no associated goods and are exempt from GST under entry No. 3 and 3A of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. BBMP, being a municipality constituted by the Government of Karnataka, claims exemption from GST on these services. Issue 2: Applicability of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 The authority examined whether the services provided by the applicant qualify for exemption under entry No. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. The notification exempts pure services provided to the Central Government, State Government, Union territory, or local authority by way of any activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution. Issue 3: Classification of services provided by the applicant The authority considered whether the services provided by the applicant are pure services and whether BBMP qualifies as a local authority. The services provided by the applicant involve no supply of goods and are neither works contract services nor composite supplies. BBMP qualifies as a local authority under Section 2(69) of the CGST Act 2017, as it is a municipality established under the Karnataka Municipal Act 1976 and working under The Bruhat Bengaluru Mahanagara Palike Act 2020. Issue 4: Determination of the applicant's tax liability under GST The authority examined whether the services provided by the applicant are in relation to any function entrusted to a Municipality under Article 243W of the Constitution. The promotion of educational aspects is listed as a function under the 12th Schedule, Article 243W of the Constitution. The services of supplying teachers and lecturers to BBMP schools and colleges are considered part of promoting educational aspects. Ruling: The service of supplying teachers/lecturers to schools/colleges run by BBMP on an outsourced basis is covered under pure services provided to a local authority (BBMP) by way of an activity in relation to the function of "Promoting educational aspects" entrusted to a Municipality under Article 243W of the Constitution of India. Hence, these services are exempted in terms of entry number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. The remaining questions raised by the applicant do not fall under the issues covered under Section 97(2) of the CGST Act 2017, and thus no rulings are given in respect of those questions.
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