2021 (9) TMI 382 - AAR - GST

Exemption form GST - Pure services - supply of Consulting Service for Programme Management and Accompanying Measures for implementation of Integrated Storm Water Drain for M1 M2 components of Kovalam Basin in the extended area of Greater Chennai Corporation - services were supplied to the Superintending Engineer, Storm Water Drain Department, Greater Chennai Corporation, Chennai - applicant is the 'Person' to whom the 'Project' is extended or not - Sl.No.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 - HELD THAT - The applicant, in the case at hand has stated that they require the ruling in their individual capacity of M/s. Mukesh Associates, a Partnership firm and not as a Member of the JV or the 'Consultant' to whom the Project' is awarded. The applicant has stated that they offer services through their experts, raise invoice and receive payments and therefore they are eligible to seek the ruling pertaining to their part. Whether the applicant is the 'Person' to whom the 'Project' is extended and the one providing the service? - HELD THAT - It is very clear that the project is executed by the 'Consultant', which is JV GITEC-NK Buildcon- Mukesh Associates. The applicant in his individual capacity is different from the JV, in which he is a member. The 'project' is awarded to the JV and not to the applicant. It is found that it is the Joint Venture with the Registered seat of the Association at Cologne, Germany is the 'Person' to whom the 'Project' is awarded and not the applicant. As per existing laws of the land, a Joint Venture Company, which is formed by 2 or more entities have a separate existence than that of the said entities. Further, as per the Joint Venture Declaration, it is seen that the Lead Member of the JV is the sole representative of the JV and any restrictions to the Power of attorney extended by the participating Members shall be invalid. Therefore supply of goods or services or both, being undertaken or proposed to be undertaken in respect of the 'Project' will be by the Joint Venture Company, and not the applicant. Thus the person who can make such application is the Joint Venture Company only and not the applicant, hence the application is not admitted for consideration on merits. The application is rejected as not maintainable.

Summary

Issues Involved:
1. Whether the pure services provided by the applicant are exempt from GST as per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Issue-wise Detailed Analysis:

1. Whether the pure services provided by the applicant are exempt from GST as per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017:

The applicant, a registered entity under GST, sought an advance ruling on whether their consulting services for the implementation of Integrated Storm Water Drain for M1 & M2 components of Kovalam Basin in the extended area of Greater Chennai Corporation are exempt from GST under S.No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Applicant's Position:
The applicant argued that their services fall under "pure services" provided to a local authority (Greater Chennai Corporation) and are related to urban planning, which is a function entrusted to municipalities under Article 243W of the Constitution. They cited Sl. No. 3 of the Notification No. 12/2017-Central Tax (Rate), which exempts such services from GST.

Virtual Hearing and Clarifications:
During the virtual hearing, the applicant confirmed that they provide pure services directly to the Greater Chennai Corporation and receive payments directly from them. They submitted various documents, including the contract agreement, invoices, and a detailed synopsis of their duties and payment references.

Jurisdictional Authorities' Comments:
Both the State and Center Jurisdictional Authorities confirmed that there were no pending proceedings on the subject issue and agreed that the services provided by the applicant could be exempt from GST under the mentioned notification.

Authority's Examination:
The Authority examined the contract, which was executed between the Greater Chennai Corporation and an unincorporated Joint Venture (JV) comprising GITEC-IGIP India Pvt. Ltd, GITEC-IGIP GmbH, the applicant, and N K Buildcon Pvt. Ltd. The applicant sought the ruling in their individual capacity, not as a member of the JV.

Legal Interpretation:
The Authority noted that the project was awarded to the JV, not to the applicant individually. As per Section 95(a) of the GST Act, an advance ruling can be provided only to the applicant undertaking or proposing to undertake the supply of goods or services. Since the project was awarded to the JV, the JV is the "person" eligible to seek the ruling, not the applicant in their individual capacity.

Conclusion:
The application was rejected as not admissible because the applicant, in their individual capacity, did not meet the criteria under Section 95(a) of the GST Act. The ruling can only be sought by the JV, which is the entity awarded the project.

Ruling:
The application is rejected as not admissible for the reasons mentioned above.