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2025 (4) TMI 230 - AAR - GSTEligibility for exemption under serial No. 3A of N/N. 9/2017-IT (Rate) dated 28.6.2017 as amended by N/N. 2/2018-IT (Rate) dated 25.1.2018 - supply of services of Dredging Activity undertaken by the applicant given to Government - HELD THAT - The Gujarat Maritime Board is a body corporate. The term government entity stands omitted from the exemption notification. Even otherwise in terms of Section 103 of the CGST Act 2017 the advance ruling pronounced by the Authority is binding only on the applicant. The applicant is not eligible for the benefit of the exemption notification.
ISSUES PRESENTED and CONSIDERED
The core legal question considered in this judgment was whether the supply of dredging services provided by the applicant to the Gujarat Maritime Board is eligible for exemption under serial No. 3A of notification No. 9/2017-IT (Rate) dated 28.6.2017, as amended by notification No. 2/2018-IT (Rate) dated 25.1.2018. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents The legal framework revolves around the Goods and Services Tax (GST) exemption notification No. 9/2017-IT (Rate), specifically serial No. 3A, which provides exemption for composite supplies to government entities related to functions entrusted to a Panchayat or Municipality under Articles 243G and 243W of the Constitution of India. The notification was amended by notification No. 2/2018-IT (Rate). Court's Interpretation and Reasoning The Tribunal examined the conditions under serial No. 3A, which requires that the supply be a composite supply of goods and services where the value of goods does not exceed 25% of the total value, provided to the Central Government, State Government, Union Territory, or local authority, and related to functions entrusted to Panchayats or Municipalities. Key Evidence and Findings The applicant provided dredging services under a contract with the Fisheries Department, which was argued to be a government entity. The applicant submitted certificates from the Chief Engineer of Fisheries, indicating that the dredging work was necessary for maintaining the fishing harbor and did not constitute more than 25% of the value of goods supplied. Application of Law to Facts The Tribunal noted that the dredging services were provided to the Gujarat Maritime Board (GMB), which is a body corporate and not a government entity as per the amended notification. The Tribunal found that GMB is not a local authority under section 2(69) of the CGST Act, 2017. Treatment of Competing Arguments The applicant argued that the dredging services were related to fisheries development, a function under Article 243G. However, the Tribunal did not examine this in detail as the primary condition regarding the recipient being a government entity was not satisfied. Conclusions The Tribunal concluded that the applicant was not eligible for the exemption as the services were provided to GMB, which does not qualify as a government entity or local authority per the notification. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning The Tribunal stated, "GMB does not fall within the ambit of either the Central Government, State Government or Union Territory or local authority. Thus, the third condition that the supply is to be provided to the Central Government, State Government or Union Territory is not satisfied." Core Principles Established The judgment clarified that for an exemption under serial No. 3A, the recipient must be a government entity or local authority as defined in the notification, and the removal of the term "government entity" from the notification is significant in determining eligibility. Final Determinations on Each Issue The Tribunal ruled that the supply of dredging services to the Gujarat Maritime Board is not covered under serial No. 3A of notification No. 9/2017-IT (Rate) as amended, thereby denying the exemption to the applicant.
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