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TMI Blog2019 (2) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... rusted to a Municipality under article 243 W of the Constitution, then the same is exempted vide SI.No. 3 of the Notification No. 12/2017 Central Tax (Rate) dated 28th June 2017. In the case at hand, M/s. CMWSSB is created vide The Chennai Metropolitan Water Supply and Sewerage Act, 1978 (Tamil Nadu Act 28 of 1978) with 100% contribution by way of Government (i.e. by way of takeover of Assets and Liabilities from Chennai Municipal Corporation and Tamil Nadu Water Supply and Drainage Board) and controlled by the Government by way of appointing Directors of the CMWSS Board, to carry out the functions of supplying water for Domestic, Industrial and Commercial purposes as well as Sanitation Conservancy by way of disposal of Sewerage. M/s. TWAD Board is a Board, constituted by an Act of Tamil Nadu State Legislature called Tamil Nadu Water Supply and Drainage Board Act, 1970 with 100% contribution by way of Government and controlled by Government by way of appointing Directors of the TWAD Board entrusted with the development of Water Supply and Sewerage facilities in Municipalities and Panchayats in the State of Tamil Nadu, except Chennai Metropolitan Development. Thus, in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy Services to others and pay CGST taxes and SGST taxes duly, besides carrying on services to Common Effluent Treatment Plant. They are registered vide GSTIN: 33AAACA3912A1ZM. They have sought Advance Ruling on:- 1. Whether the services rendered by them to CMWSSB and TWAD is exempted under SI.No. 3 of Notification No. 12/201 /-CT (Rate) dated 28th June 2017. 2. As the Notification is effective from 01/07/2017- if Advance Ruling rules that the services are exempt, then for the Invoices already raised on the client with levy of 18% GST can be taken credit of SGST by issuing Credit Note. The Applicant has submitted the Advance Ruling in Form GST ARA - 01 and had enclosed challan for payment of Fees of ₹ 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 2.1 The Applicant has stated that they are a Third Party Inspection Services Agency empanelled with CMWSB and TWAD (Clients). They render Third Party Inspection Services as per the work orders issued to them by their Clients from time to time. The Applicant has stated that, when Goods/ Materials are ordered /procured by TWAD/CMWSSB from various contractors in connection with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WAD are Government Authority and that they supply Services of Quality Inspection based on standards given by M/s. CMWSSB and M/s. TWAD at the premises of the Manufacturer/Contractor, before materials are dispatched and the Applicant is paid percentage of value of materials inspected. The Applicant submitted further information relates to nature of activities and a copy of Agreement dated 02.03.2016, confirming their empanelment with m/s. TWAD, the type of services to be rendered, etc; Agreement dated 05.12.2016 confirming their empanelment with M/s. CMWSSB, the type of services to be rendered, etc; Work Order along with copy of Inspection report Invoice of the work undertaken for M/s. CMWSSB and M/s. TWAD; M/s. CMWSS Act from Official Website link of M/s. CMWSSB and M/s. TWAD Act from the Official M/s. TWAD Website. 4.1 Submissions of the Applicant were verified. On verification of the Agreement, Work Orders with M/s. TWAD, it is seen that the Applicant was empanelled for conducting Third party Inspection for procurements of Pipes, Open Well Submersible Pump sets, Panel Boards, Transformer, Water Meters and other equipment supplied by the L T Ltd., Chennai to M/s. TWAD under C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter by way of Water Tax, and Sewerage Tax, grants from the government etc. 4.4 The Applicant has also submitted TWAD Act, on verification of which it is seen that it is a Board constituted by an act of Tamil Nadu State Legislature called Tamil Nadu Water Supply and Drainage Board Act, 1970 with 100% contribution by way of Government and controlled by Government by way of appointing Directors of the TWAD Board. It is entrusted with the development of Water Supply and Sewerage facilities in Municipalities and Panchayats in the State of . Tamil Nadu, except Chennai Metropolitan Development. It is seen that the Secretary in charge of Municipal Administration and Water Supply are on the Board and on setting up of TWAD, all assets, liabilities, legal proceedings and properties relating to Public Health Engineering and Municipal Works Department were transferred to TWAD. 5. The Advance Ruling is sought on the applicability of exemption under Sl.No. 3 of Notification No. 12/2017 Central Tax (Rate) dated 28th June 2017, to the Third Party Inspection services rendered by the Applicant to M/s. CMWSSB and M/s. TWAD under the two contracts. The facts of the case as stated by the Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority means an authority or a Board or any other body, -(i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90 percent or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution. From the above, it is evident that if any Pure Services are provided to a Governmental Authority by way of any activity in relation to any function entrusted to a Municipality under Article 243 W or a Panchayat under Article 243 G (from 13.102017) of the Constitution and that 'Governmental Authority' is an Authority or a Board set up by an Act of Parliament or a State legislature or established by the Government with 90 percent or more participation by way of equity or control to carry out any function entrusted to a Municipality under article 243 W of the Constitution, then the same is exempted vide SI.No. 3 of the Notification No. 12/2017 Central Tax (Rate) dated 28th June 2017 referred above. 6.2 In the case at hand, M/s. CMWSSB is created vide The Chennai Metropolitan Water Supply and Sew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td., Chennai to M/s. TWAD under CWSIS to Vellore Corporation and various Municipalities and Towns of Vellore district required for implementing Water Supply Schemes and Sewerage Schemes to ensure Quality Assurance. The Applicant will also submit a final report on the quality of the equipment based on their inspections. The Applicant will be paid as a percentage of the value of materials inspected at various slabs. Therefore, the Applicant is rendering pure services to TWAD in respect of its functions with respect to Municipalities. In the other contract with CMWSSB, it is seen that the Applicant was selected was empaneled for conducting Third party Inspection for procurements of Pipes, Pump sets, Electronic Equipment, Chemicals of works involved in extension of Desalination , iron conveying water main from Medavakkam Junction to Alandur Water Distillation Station. The Applicant will also submit a final report on the quality of the equipment based on their inspections. The Applicant will be paid as a percentage of the value of materials inspected. Therefore, the Applicant is rendering Pure Services to M/s. CMWSSB in respect of its functions with respect to Municipalities. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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