2023 (1) TMI 230 - AAR - GST

Scope of advance ruling - service recipient - Exemption from GST - manpower supply services of (M/s. Call me services) provided to the government entities - Works Contract Service or composite supplies involving supply of goods - Applicability of N/N. 12/2017 Central Tax (Rate) dated 28.06.2017 - HELD THAT - On a harmonious reading of the provisions of law, it gets abundantly clear that any person who is registered under GST or desirous of obtaining a registration under GST may apply for an advance ruling and that the question on which an advance ruling is sought for may be with respect to any of the issues referred to in Section 97(2) ibid which are in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. The advance ruling mechanism under GST does not envisage giving a ruling to a recipient of supply of goods or services or both about the said supply at supplier end. As per Section 103 of the CGST Act. The advance ruling pronounced by the Authority is binding only on the applicant who has sought for the ruling on any matter referred to in Section 97(2) as well as on the concerned officer, or jurisdictional officer of the applicant. The applicant in the Capacity of recipient of service is not eligible under law to seek a ruling on the taxability of a transaction at supplier's end, received by him. In fact, we as AAR does not have the authority to determine the classification or nature of service supplied by the service provider of the applicant at the supplier end who in this case happens to be M/s Call me services, on an application made by the applicant, the recipient of service. The said M/s Call me services, service provider of the applicant is well within its rights to seek an advance ruling from the jurisdictional authority, as to whether the services supplied by them to the applicant is exigible to tax.

Summary

Issues Involved:
1. Classification of services provided by M/s. Call Me Services to Jal Jeevan Mission.
2. Exemption status of these services under Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017.

Issue-wise Detailed Analysis:

1. Classification of Services Provided by M/s. Call Me Services to Jal Jeevan Mission:

The applicant, M/s State Water and Sanitation Mission, Jal Jeevan Mission, sought an advance ruling on whether the manpower supply services provided to them by M/s. Call Me Services are exempted services as per Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017. The Jal Jeevan Mission is a government scheme aimed at providing safe drinking water to rural households by 2024. The services in question involve providing manpower for office work related to the implementation of this mission.

2. Exemption Status Under Notification No. 12/2017 Central Tax (Rate) Dated 28.06.2017:

The applicant contended that pure services (excluding works contract services or composite supplies involving the supply of goods) provided to government entities are exempt from GST under Notification No. 12/2017 Central Tax (Rate). They referenced entries 3 and 3A of this notification, which outline the conditions for exemption. Specifically, pure services provided to government entities in relation to functions entrusted to Panchayats under Article 243G or Municipalities under Article 243W of the Constitution are exempt from GST.

Contentions and Legal Provisions:

The applicant argued that the services provided by M/s. Call Me Services fall under the definition of "pure services" as there is no supply of goods involved. They provided detailed definitions and functions under Articles 243G and 243W, which include activities like water management, sanitation, and public health, aligning with the objectives of the Jal Jeevan Mission.

Authority's Analysis:

The Authority for Advance Ruling (AAR) examined the admissibility of the ruling sought by the applicant. According to Section 95(a) of the CGST Act, 2017, an advance ruling can be provided to an applicant on matters related to the supply of goods or services undertaken or proposed to be undertaken by the applicant. Section 97(2) specifies the issues on which advance rulings can be sought, including the classification of goods or services and the applicability of notifications.

The AAR noted that the applicant, being the recipient of the services, is not eligible to seek an advance ruling on the classification or taxability of services provided by the supplier, M/s. Call Me Services. The advance ruling mechanism is intended for suppliers of goods or services to seek clarification on their transactions. Therefore, the applicant's request for a ruling on the taxability of services received from M/s. Call Me Services is beyond the scope of the advance ruling mechanism.

Conclusion:

The AAR concluded that the applicant, M/s State Water and Sanitation Mission, Jal Jeevan Mission, cannot seek an advance ruling on the taxability of services provided by M/s. Call Me Services as it falls outside the scope of "advance ruling" as defined under Section 95(a) and Section 97(2) of the CGST Act, 2017. The ruling sought by the applicant is not admissible under the law, and M/s. Call Me Services, as the service provider, is the appropriate party to seek an advance ruling on the taxability of their services.

Order:

The ruling sought by M/s State Water and Sanitation Mission, Jal Jeevan Mission, on the issue of taxability of services provided by M/s. Call Me Services cannot be answered as it is outside the scope of "advance ruling" as stipulated under Section 95(a) read with Section 97(2) of the CGST Act, 2017.