2018 (11) TMI 712 - AAR - GST

Classification of Services - services provided by them under the ICT @ School Project - Applicability of Entry No. 72 of Notification No. 12/2017-Cantral Tax read with Entry No. 72 of Notification bearing SRO No. 306/2017 -Finance Department, Government of Odisha - services provided by them under the ICT @ School Project. Held that - The Contract is only for supply, installation, maintenance and commissioning of projection system, interactive white board, computer hardware, connected accessories, installation of software and other allied accessories, site preparation, maintenance of equipment and provision of computer education services for 5 years in 591 Govt. and non-Govt. aided high schools of Odisha under ICT @ school project in the state of Odisha - the contract is clearly for supply of goods and services including training - it is a composite supply having distinctly identifiable components. There is no supply of goods either during or after contract period - it is also not a case of transfer of goods without consideration rather a case of supply of goods on consideration payable in instalments agreed between the contracting parties. Ruling - Recipient of the service OKCL is a body corporate which cannot be regarded as Government. The supply undertaken by the applicant is in the nature of composite supply. It includes supply of goods and services which are not naturally bundled. Each of the components of composite supply are distinctly identifiable both in terms of quantity and value. The service provided or to be provided is not exclusively in the nature of training programme. Though the source of funding for the service is the state government and central government, yet as per the contract the payment responsibility is vested on OKCL. Thus, the activities of the applicant by way of supply of goods and services under the ICT Project are not covered under Entry 72 of the N/N. 12/2017 dated 28-06-2017 to be entitled to the benefit of exemption from GST.

Summary

Issues: Applicability of Entry No. 72 of Notification No. 12/2017-central Tax to services provided under the ICT @ School Project.

Analysis:
1. Nature of Applicant's Supply: The applicant, a body corporate, sought an Advance Ruling on the applicability of Entry No. 72 of Notification No. 12/2017-central Tax to services provided under the ICT @ School Project. The ruling clarified that the supply by the applicant is a composite supply, including goods and services not naturally bundled. Each component is distinctly identifiable in terms of quantity and value. The service is not solely a training program, indicating a composite nature of the supply.

2. Funding Source and Payment Responsibility: Although the funding for the service originates from the State and Central Governments, the payment responsibility lies with the recipient, OKCL, a body corporate. Despite the governmental funding source, the contractual arrangement designates OKCL as the payment entity. This distinction is crucial in determining the tax implications of the supply.

3. Exemption from GST: The ruling concluded that the activities of the applicant under the ICT project do not fall within the purview of Entry 72 of Notification No. 12/2017 dated 28.06.2017 for exemption from GST. Therefore, the applicant is not entitled to the benefit of exemption under the said notification for the supply of goods and services in the ICT @ School Project.

4. Appeal Process: The ruling provided the applicant and the jurisdictional officer with the option to appeal the decision. If aggrieved by the ruling, the applicant or the officer can appeal to the Odisha State Appellate Authority for Advance Ruling under Section 100 of the OGST/CGST Act, 2017 within 30 days from the date of receiving the Advance Ruling. This ensures a mechanism for review and redressal in case of dissatisfaction with the initial ruling.