2021 (11) TMI 226 - AAR - GST

Exemption from GST or not - services provided to Samaj Kalyan Department, State Government of Maharashtra (Social Welfare Department) for residential accommodation of underprivileged girls - applicability of TDS provisions in case where the supply of services is exempt - Applicant is not registered under GST and provide services to Social Welfare Department (Soma Kalyan Department), a Department of State Government - entitlement to refund if TDS is deducted. Whether the services provided by the applicant to Samaj Kalyan Department, State Government of Maharashtra (Social Welfare Department) for residential accommodation of underprivileged girls is exempt from GST? - HELD THAT - Even though the applicant as per her submission is supplying Pure Services, in light of insufficient material on record, it is not possible to find whether the said services are supplied by the applicant by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution - The renting of immovable property services by the applicant is not liable for exemption under the provisions of Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017. Whether TDS provisions will be applicable in case where the supply of services is exempt? - HELD THAT - The impugned services supplied by the applicant are liable to tax and therefore not exempt. Thus the TDS provisions under the relevant section 51 of the GST Act are applicable in the subject case. As the Applicant is not registered under GST and provide services to Social Welfare Department (Samaj Kalyan Department), a Department of State Government, then whether TDS notification issued under section 51 would be applicable for deduction of TDS? - HELD THAT - TDS notification issued under section 51 would be applicable for deduction of TDS in the subject case. In case TDS is deducted, whether applicant would be entitled for refund of the same? - HELD THAT - The said question pertains to entitlement of refund and is not covered under Section 97 of the CGST Act, 2017 and therefore we refrain from answering this question.

Summary

Issues Involved:
1. GST exemption on services provided for residential accommodation of underprivileged girls.
2. Applicability of TDS provisions on exempt services.
3. Applicability of TDS notification under section 51 for unregistered GST suppliers.
4. Entitlement to refund if TDS is deducted.

Issue-wise Detailed Analysis:

1. GST Exemption on Services Provided for Residential Accommodation of Underprivileged Girls:

The applicant, a co-owner of immovable property, leases the property to the Samaj Kalyan Vibhag (Social Welfare Department) of the State Government of Maharashtra for housing underprivileged girls. The applicant contends that these services are exempt from GST under Notification No. 12/2017- C.T. (R) dated 28.06.2017, which exempts "pure services" provided to the government in relation to functions entrusted to Panchayats or Municipalities under Articles 243G and 243W of the Constitution.

Upon examination, it was found that the applicant's services qualify as "pure services" and are provided to a State Government department. However, the applicant failed to provide sufficient evidence to demonstrate that these services are directly related to functions entrusted under Articles 243G or 243W. Consequently, the services do not qualify for the GST exemption under the cited notification.

2. Applicability of TDS Provisions on Exempt Services:

The applicant queried whether TDS provisions apply if the services provided are exempt from GST. Since the ruling determined that the services are not exempt from GST, the TDS provisions under section 51 of the GST Act are applicable.

3. Applicability of TDS Notification Under Section 51 for Unregistered GST Suppliers:

The applicant, not registered under GST, questioned the applicability of TDS notifications under section 51. The ruling confirmed that TDS notifications under section 51 are applicable, even if the supplier is unregistered, as the services provided are taxable.

4. Entitlement to Refund if TDS is Deducted:

The applicant sought clarity on whether they would be entitled to a refund if TDS is deducted. The ruling refrained from answering this question, as it pertains to entitlement of refund, which is not covered under Section 97 of the CGST Act, 2017.

Order:

1. The services provided to the Samaj Kalyan Department for residential accommodation of underprivileged girls are not exempt from GST.
2. TDS provisions will be applicable in the case where the supply of services is not exempt.
3. TDS notification under section 51 is applicable for deduction of TDS.
4. The question regarding entitlement to a refund of deducted TDS was not answered.