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2025 (2) TMI 298 - AAR - GSTTaxability of supply of man power services to PHE Department in terms of Serial No 3 of Notification no. 12/2017-State Tax (Rate) vide 1136 F.T. dated 28.06.2017 - HELD THAT - The term pure services has not been defined under the GST Act. However a bare reading of the description of services as specified in entry serial number 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended denotes supply of services which does not involve any supply of goods can be regarded as pure services. The applicant has submitted that as per the work order issued to him by PHE he provides manpower services of 583 Junior Engineers for executing JAL JEEVAN MISSION Project. It prima facie appears that the aforesaid supply doesn t involve any transfer of materials in goods. The supply of services as provided by the applicant is pure services. The second condition i.e. whether the applicant provides services to the Central Government State Government or Union Territory or local authority. Both the work order and the letter bearing memo no 1919/RS dated 15.07.2024 submitted by the applicant issued by Directorate of Public Health Engineering Govt of West Bengal. It transpires from above that the applicant provides the aforesaid services to Government of West Bengal. The first and second conditions i.e. the supply of services can be regarded as pure supply of goods and services and having been provided to the State Government get satisfied. Whether the said services are in relation to any functions entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution of India? - HELD THAT - The functions entrusted to a Panchayat or to a municipality as listed in the Eleventh and/or Twelfth Schedule includes the functions like drinking water or water supply for domestic industrial and commercial purposes. Thus the services as provided by the applicant for supply of data entry operator junior engineer (System Administrator Software Support Personnel) throughout the West Bengal in connection with JJM is found to be covered by the subject matter as listed in the Eleventh and/or Twelfth Schedule thereby can be regarded as a supply in relation to functions entrusted to a Panchayat under article 243G and/or to a municipality under article 243W of the Constitution of India. Conclusion - Supplies of data entry operator junior engineer (System Administrator Software Support Personnel) made by the applicant to the Public Health Engineering Department (PHE) Government of West Bengal for executing Jal Jeevan Mission is exempted from payment of tax vide serial number 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 corresponding State Notification No. 1136 F.T. dated 28.06.2017 as amended.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The judgment hinges on the interpretation of Serial No. 3 of Notification No. 12/2017-Central Tax (Rate), which exempts "pure services" provided to government bodies in relation to functions entrusted to Panchayats or Municipalities under Articles 243G and 243W of the Constitution. The relevant functions are listed in the Eleventh and Twelfth Schedules of the Constitution. Court's Interpretation and Reasoning The Tribunal examined whether the applicant's services fall under the category of "pure services" and whether these services are related to functions entrusted to Panchayats or Municipalities. The Tribunal noted that "pure services" are those that do not involve the supply of goods and confirmed that the applicant's services, involving the provision of manpower, qualify as such. Furthermore, the Tribunal considered whether these services relate to functions listed in the Eleventh and Twelfth Schedules, such as water supply and sanitation. Key Evidence and Findings The Tribunal reviewed documents, including a memo from the PHE Department, which indicated that the applicant's services were considered exempt under the relevant notification. The Tribunal also examined the nature of the Jal Jeevan Mission, which aims to provide safe drinking water, a function listed under the Eleventh Schedule. Application of Law to Facts The Tribunal applied the legal framework to determine that the applicant's services are indeed related to functions entrusted to Panchayats or Municipalities. The provision of manpower for the Jal Jeevan Mission was deemed to have a direct nexus with the function of providing drinking water, as outlined in the Eleventh Schedule. Treatment of Competing Arguments The applicant argued that their services did not qualify for exemption, citing various advance rulings where similar services were deemed taxable. However, the Tribunal distinguished these cases based on the specific nature of the services and their direct relation to functions listed in the Schedules. The Tribunal emphasized the importance of establishing a direct and proximate relationship between the services and the constitutional functions. Conclusions The Tribunal concluded that the applicant's services are exempt from GST under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate), as they are pure services provided in relation to functions entrusted to Panchayats or Municipalities. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning "Supplies of data entry operator & junior engineer (System Administrator, Software Support Personnel) made by the applicant to the Public Health Engineering Department (PHE), Government of West Bengal for executing Jal Jeevan Mission is exempted from payment of tax vide serial number 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017." Core Principles Established The Tribunal established that for services to qualify as exempt under the relevant notification, they must be pure services provided to a government body and must directly relate to functions listed in the Eleventh or Twelfth Schedules of the Constitution. Final Determinations on Each Issue The Tribunal determined that the applicant's services are exempt from GST as they meet the criteria outlined in Serial No. 3 of Notification No. 12/2017-Central Tax (Rate), being pure services provided in relation to functions entrusted to Panchayats or Municipalities.
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