2018 (12) TMI 894 - AAR - GST

Levy of GST - consultancy services rendered to Municipal Corporation of Greater Mumbai (MCGM) for an upcoming project of establishment & development of textile museum in Mumbai - functions entrusted to a municipality under Article 243 W - pure services - whether the consultancy services as per details above would be exempt under N/N. 12/2017-Central Tax (Rate) dated 28.06.2018? Held that - The applicant in their ARA have stated that Establishment and Development of a museum and recreation ground is not considered as a function entrusted to a Municipality under Article 243 of the Constitution. Since Establishment and Development of a museum and recreation ground is not a function listed in in the 12th Schedule to be read with Article 243 of the Constitution the applicant has stated that in their view JJ is required to charge GST on consultancy services rendered to MCGM for the above project work under GST laws. The applicant has not provided the copies of contract entered into by them with MCGM which would in detail give the exact nature of activities being done by them and which would be very crucial in deciding whether the services being provided by the applicant are in the nature of Pure Services or Works Contract Services. The services being provided by the applicant to MCGM are in the nature of Works Contract Services and therefore they would in no way be eligible for exemption under Sr. No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2018 in respect of pure services. Ruling - The applicant shall charge GST on the consultancy services rendered to Municipal Corporation of Grater Mumbai (MCGM) for an upcoming project of establishment & development of textile museum in Mumbai.

Summary

Issues Involved:
1. Applicability of GST on consultancy services provided to Municipal Corporation of Greater Mumbai (MCGM) for the establishment and development of a textile museum in Mumbai.

Issue-wise Detailed Analysis:

1. Applicability of GST on Consultancy Services:

Facts and Contentions - As per the Applicant:
- The applicant, J.J. College of Architecture Consultancy Cell, formed under the guidelines of the Council of Architecture and University of Mumbai, provides architectural services exclusively to government bodies, state corporations, and PSUs.
- The applicant entered into an agreement with MCGM for comprehensive architecture and project management services for a textile museum project, involving heritage restoration and adaptive reuse of structures.
- The applicant contends that the services provided should be exempt from GST under Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017, which exempts pure services provided to government bodies in relation to functions entrusted to municipalities under Article 243W of the Constitution.
- However, the agreement between JJ and MCGM is registered as a works contract agreement, and the establishment and development of a museum are not considered functions entrusted to municipalities under Article 243W.

Contention - As per the Concerned Officer:
- The concerned officer agrees that the applicant should charge GST on the consultancy services provided to MCGM.
- The agreement is classified under Article 63/63 as a works contract, making GST applicable.

Hearing:
- Preliminary and final hearings were conducted with representatives from both the applicant and MCGM present. The jurisdictional officer also made submissions.

Observations:
- The Authority examined the agreement and found that it was registered as a works contract agreement.
- The services provided by the applicant include comprehensive architecture and project management, which involve works contract services.
- According to Notification No. 12/2017-Central Tax (Rate), pure services provided to government bodies are exempt from GST, but works contract services are not.
- The functions entrusted to municipalities under Article 243W do not include the establishment and development of museums.
- The Authority concluded that the services provided by the applicant are in the nature of works contract services and are not eligible for exemption under the said notification.

Order:
- The Authority ruled that the applicant must charge GST on the consultancy services rendered to MCGM for the textile museum project.

Conclusion:
The Authority for Advance Ruling concluded that the consultancy services provided by J.J. College of Architecture Consultancy Cell to MCGM for the establishment and development of a textile museum are subject to GST. The services are classified as works contract services and do not qualify for the exemption under Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017.