2024 (8) TMI 63 - AAR - GST

Governmental Authority or not - serial number 3 of notification Number 12/2017-Central Tax (Rate) dated 28/06/2017 - Rate of tax - work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced before 01.01.2022 - work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India which is performed invoiced after 01.01.2022 but which is allotted before 01.01.2022 - work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced after 01.01.2022 - service receiver within the meaning of Sec. 2 (93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided before 01.01.2022 and after 01.01.2022 - appointment of MJP as an agency to implement water supply schemes - delegation of sovereign function enumerated in Sch. XI XII within the framework of Constitution of India so as to hold that MJP has performed the function entrusted under Article 243G 243W of the Constitution of India. Whether Services provided to MJP for the Constitutional function of State Central Governments, for which these Governments are liable to pay the consideration of contract, and as payment is made through PFMS, supplies are in fact made to the Central State Government? - HELD THAT - The Jal Jeevan Mission is implemented through SWSM, which is Society and has authority to undertake work, as per guidelines of the Jal Jeevan Mission. Authority and responsibility to Open Bank account. Both the Governments will transfer funds as grants in this account. Money is not directly going to be paid to the vendors/ contractors of SWSM, directly by respective Governments. Use of PFMS is binding. Hence it can not be said that the respective Governments are liable to pay to the vendors/contractors making supply to SWSM or MJP, as the case may be. Payment received through PFMS, proves that both the Central Governments have paid to applicant for the services supplied by them, hence are services provided to the Governments and not MJP. Whether the MJP is Governmental Authority - HELD THAT - As the MJP is set up by an Act of Legislature of Maharashtra State, it is Governmental Authority , for the purpose of exemption entry at Sr No 3, before the omission of the words from the entry by Notification No. 16/2021-Central Tax (Rate) dated 18-11-2021 (W.e.f. 01 January 2022). Supply of services where Time of supply is on or before 31-12-2021. After Considering all the aforesaid facts, provisions of Law, issues and decision therein, we have no hesitation in holding the Technical Consultancy for Project Development and Management support services , provided by the applicant to the MJP for its Water supply schemes where time of supply is on or before 31-12-2021, are covered by the exemption entry at Sr No. 3 of the exemption notification No 12/2017-Central Tax (Rate), dated 28th June 2017.

Issues Involved:
1. Rate of tax for work allotted by Maharashtra Jeevan Pradhikaran (MJP) before 01.01.2022.
2. Rate of tax for work allotted by MJP before 01.01.2022 but invoiced after 01.01.2022.
3. Rate of tax for work allotted, performed, and invoiced by MJP after 01.01.2022.
4. Identification of the service receiver for services provided before 01.01.2022.
5. Identification of the service receiver for services provided after 01.01.2022.
6. Whether MJP's appointment as an agency to implement water supply schemes amounts to delegation of sovereign function under Articles 243G and 243W of the Constitution of India.

Detailed Analysis:

1. Rate of Tax for Work Allotted by MJP Before 01.01.2022:
The applicant provided technical consultancy services to MJP for water supply schemes under the Jal Jeevan Mission. The services were classified under SAC code 998399 and were considered "pure services."

Decision:
For services provided before 01.01.2022, the rate of tax is Nil, being exempt under Entry at Sr No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017.

2. Rate of Tax for Work Allotted by MJP Before 01.01.2022 but Invoiced After 01.01.2022:
The applicant argued that the rate of tax should remain Nil even if the invoicing was done after 01.01.2022, as the work was allotted before this date. However, the tax rate depends on the "time of supply" as per Section 13 of the CGST Act, which considers the earliest of the date of issue of invoice, date of provision of service, or the date on which the recipient shows receipt of services in their books.

Decision:
For services performed and invoiced after 01.01.2022 but allotted before 01.01.2022, the rate of tax is 18% (9% CGST and 9% SGST) under Entry at Sr. No. 21 Heading 9983(ii) of Notification No. 11/2017-Central Tax (Rate).

3. Rate of Tax for Work Allotted, Performed, and Invoiced by MJP After 01.01.2022:
The deletion of the words "Government Authority or Government Entity" from Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) effective from 01.01.2022 implies that services provided to MJP no longer qualify for the exemption.

Decision:
For services allotted, performed, and invoiced after 01.01.2022, the rate of tax is 18% (9% CGST and 9% SGST) under Entry at Sr. No. 21 Heading 9983(ii) of Notification No. 11/2017-Central Tax (Rate).

4. Identification of the Service Receiver for Services Provided Before 01.01.2022:
The applicant contended that the service receiver should be the Central or State Government due to the nature of the Jal Jeevan Mission. However, the agreement and payment terms indicated that MJP was the entity responsible for making payments.

Decision:
The service receiver for services provided before 01.01.2022 is the Maharashtra Jeevan Authority (erstwhile Maharashtra Jeevan Pradhikaran).

5. Identification of the Service Receiver for Services Provided After 01.01.2022:
Similar to the argument for services provided before 01.01.2022, the applicant argued that the Central or State Government should be considered the service receiver due to the funding mechanism. However, the contractual terms and the nature of PFMS (Public Financial Management System) indicated that MJP was responsible for payments.

Decision:
The service receiver for services provided after 01.01.2022 is the Maharashtra Jeevan Authority (erstwhile Maharashtra Jeevan Pradhikaran).

6. Delegation of Sovereign Function:
The applicant questioned whether MJP's role in implementing water supply schemes constitutes a delegation of sovereign functions under Articles 243G and 243W of the Constitution. This issue was deemed outside the purview of the provisions of Section 97(2) of the GST Act, 2017.

Decision:
This question was not answered as it falls outside the jurisdiction of the provisions of Section 97(2) of the GST Act, 2017.

Final Order:
1. Question 1: Nil rate of tax for work allotted, performed, and invoiced before 01.01.2022.
2. Question 2: 18% tax for work performed and invoiced after 01.01.2022 but allotted before 01.01.2022.
3. Question 3: 18% tax for work allotted, performed, and invoiced after 01.01.2022.
4. Question 4: Service receiver is the Maharashtra Jeevan Authority for services provided before 01.01.2022.
5. Question 5: Service receiver is the Maharashtra Jeevan Authority for services provided after 01.01.2022.
6. Question 6: Not answered, being outside the purview of Section 97(2) of the GST Act, 2017.

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