2019 (4) TMI 112 - AAR - GST

Appointment as an administrative agency - composite supply of services - pure services - whether the execution of Livelihood for Artists and Local Art Hubs as an administrative agency fall under taxable service as per the provision of the GST Act? - Held that - The activities performed by the petitioner falls under the category of pure services as per St. No.3 of Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017. As per the notification, Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Govt., State Govt. or Union territory or local authority or a Govt. Authority by way of any activity In relation to any function entrusted to a Panchayat under Article 243G bf the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution. Safeguarding the interests of the weaker sections of society, 'Promotion of cultural, educational and aesthetic aspects' etc. are the items coming under 12th Schedule of the Constitution of India. The activities performed by the petitioner being a pure service, comes under the Sl. No.3 of Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017 and is exempted from GST.

Summary

Issues:
1. Whether the execution of "Livelihood for Artists and Local Art Hubs" as an administrative agency falls under taxable services?

Analysis:
The case involved a labor contract cooperative society registered under the Kerala Co-operative Societies Act, primarily engaged in construction activities for the government and other institutions. The society was appointed by the Department of Cultural Affairs, Government of Kerala, as an administrative agency for a project aimed at empowering rural artists and artisans. The society sought an advance ruling on whether their services provided for this project would be taxable under the GST Act.

During the hearing, it was revealed that the society was tasked with organizing skill exhibitions, creating sustainable livelihood opportunities, establishing market connections for rural artists, and collecting data for various government programs. The society argued that their activities, including improving the skills of rural artists, conducting art product exhibitions, and facilitating market access without involving middlemen, constituted pure services.

The ruling authority examined Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017, which exempts "pure services" provided to government authorities from GST. The notification specifies that services related to functions entrusted to Panchayats or Municipalities under the Constitution, such as safeguarding the interests of weaker sections and promoting cultural aspects, fall under this exemption. Considering these provisions, the authority concluded that the activities performed by the society as an administrative agency for the project were indeed pure services exempted from GST under the specified notification.

Therefore, the ruling issued confirmed that the execution of "Livelihood for Artists and Local Art Hubs" by the society as an administrative agency fell under pure services exempted from GST as per Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017.