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TMI Blog2019 (6) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... tate may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government..subject to such conditions as may be specified therein, with respect to..the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule, . It appears from the description of the work that it improves the navigability of the riverbed and channels - an activity toward development of irrigation and waterways. It is, therefore, an activity in relation to the function listed under Sl No. 5 of the Eleventh Schedule, as entrusted to a Panchayat under Article 243G of the Constitution of India. Exemption under Sl No. 3A of the Exemption Notification is, therefore, applicable to the Applicant s supply of the above works contract service. - Case Number 15 of 2019 Order No. 11/WBAAR/2019-20 - - - Dated:- 27-6-2019 - MR. SYDNEY D SILVA, AND MR. PARTHASARATHI DEY, MEMBER Preamble Applicant s representative heard: Sri Sumit Nishania, CA A person within the ambit of Section 100 (1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany, and the State Government owns 99.98 % of the equity shares. 2.2 The Applicant submits a copy of the communication received from the Executive Engineer, Drainage Division, Puri, under his Memo No. 698 dated 16/05/2019, wherein it is stated that the work awarded to the Applicant is part of a project under the Department of Water Resources, Government of Odisha, for increasing the storage capacity of the channel to improve irrigation of the land. 2.3 The Applicant further submits a copy of the communication received from the Executive Engineer, Drainage Division, Puri, under his Memo No. 787 dated 04/06/2019, wherein it is stated cost of material transferred for completion of the dredging work is 5% of the total contract value. 2.4 The Applicant argues that the work undertaken is in relation to a function entrusted to a Panchayat under Article 243G of the Constitution of India. 3. Submission of the concerned officer from the Revenue 3.1 The concerned officer from the Revenue has refrained from offering any comment on the merit of the issue. 4. Observations and findings of the Bench 4.1 It appears from the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods constitutes not more than 25 per cent of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity 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. 4.5 In its Circular No. 51/25/2018-GST dated 31/07/2018 the Central Government clarifies that the service tax exemption at serial No. 25(a) of Notification No. 25/2012 dated 20/06/2012 (hereinafter the ST Notification) has been substantially, although not in the same form, continued under GST vide Sl No. 3 and 3A of the Exemption Notification. Sl No. 25(a) of the ST notification under the service tax exempts services provided to the Government, a local authority or a governmental authority by way of water supply, public health, sanitation, conservancy, solid waste management or slum improvement and up-gradation. The Circular further explains in relation to the specific issue of ambulance service to the Government by a private service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt subject to such conditions as may be specified therein, with respect to ...the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule, which contains the following twenty-nine functional items: 1 Agriculture including agricultural expansion 2 Land improvement, implementation of land reforms, land consolidation and soil conservation 3 Animal Husbandry, Dairying and poultry 4 Fisheries 5 Minor irrigation, water management and watershed development 6 Social forestry and farm forestry 7 Small scale industries in which food processing industry is involved 8 Minor forest produce 9 Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Exemption Notification is, therefore, applicable to the Applicant s supply of the above works contract service. Based on the above discussion, we rule as under. RULING The recipient, namely Orissa Construction Corporation Ltd, is a government entity in terms of clause 2 (zfa) of Notification No 9/2017 - Integrated Tax (Rate) dated 28/06/2017. The Applicant s supply to Orissa Construction Corporation Ltd, as mentioned in para 4.1 above, was taxable @18% under SI No. 3(vii) of Notification No. 8/2017 - Integrated Tax (Rate) dated 28/06/2017 till 12/10/2017 The supply was taxable @ 5% under Sl 3(vii) of Notification No 8/2017 Integrated Tax (Rate) dated 28/06/2017, as amended by Notification No. 39/2017 Integrated Tax (Rate) dated 13/10/2017 with effect from 13/10/2017 till 24/01/2018. It has since been exempted under Sl No. 3A of Notification No. 9/2017 - Integrated Tax (Rate) dated 28/06/2017, as amended by Notification No. 2/2018 Integrated Tax (Rate) dated 25/01/2018 This Ruling is valid subject to the provisions under Section 103 until and unless declared void under Section 104(1) of the GST Act. - - TaxTMI - TMITax ..... 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