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TMI Blog2019 (7) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... inition of an educational institution . VNIT as per the submissions made by the applicant is not engaged in providing preschool education and education up to higher secondary school or equivalent. Since VNIT as a technical institute is engaged in imparting under-graduate courses, post-graduate courses and Ph. D programs in the field of engineering, architecture and science thereby being engaged in imparting education as a part of a curriculum for obtaining a qualification recognised by law for the time being in force, it would get covered under the definition of educational institution vide clause (ii) mentioned above and therefore it is seen that the security services as in the subject case are provided to an educational institution i.e. VNIT. The applicant has been given the status of a Deemed University by the University Grants Commission. The UGC was formally established 1956 as a statutory body of the Government of India through an Act of Parliament for the coordination, determination and maintenance of standards of university education in India. Since the VNIT has been recognized by the UGC, this would imply that the courses conducted by the applicant are recognized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST Act ] by SECURITY AND INTELLIGENCE SERVICES (INDIA) LTD , the applicant, seeking an advance ruling in respect of the following questions. 1. Whether the services provided to Visvesvaraya National Institute of Technology, Nagpur will qualify for exemption under Serial No. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28 th June 2017, considering it to be an educational Institution. 2. Whether rate of tax on services provided to Visvesvaraya National Institute of Technology, Nagpur (VNIT) is nil as per Serial no 3 of Notification No 12/2011-Central Tax (Rate) dated 28th June 2017. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression GST Act would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Government, State Government or Union territory; (iii) security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; up to higher secondary: Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of preschool education and education up to higher secondary school or equivalent . Nil Nil The term educational institution is defined under clause (y) of Part 2 of the notification to mean an institution providing services by way of,- (i) pre-school education and education up to higher secondary school or equivalent, (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course In terms of the aforesaid entry, exemption is only provided inter alia in relation to security services provided by a supplier of service to an educational institution providing ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing inter alia economic development and social justice, implementation of schemes for economic development and social justice including matters listed in the Eleventh Schedule to the Constitution, The Eleventh Schedule to the Constitution inter alia covers (a) poverty alleviation programme, (b) education, including primary and secondary schools, (c) family welfare, (d) women and child development, (e) public distribution system, (f) maintenance of community assets, etc. Article 243W, on the other hand provides for powers, authority and responsibilities of Municipalities. The said article is reproduced hereunder for ready reference: Art. 243W. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow- (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to- (i) the preparation of plans for economic development and social justice; (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exemption thereunder would not apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. VNIT as an institute would get covered under the definition of educational institution , since it is engaged in imparting education as a part of a curriculum for obtaining a qualification recognized by law for the time being in force. However, VNIT as an educational institution is not engaged in providing pre-school education education up to higher secondary school or equivalent (i.e. junior college). Since VNIT, as a technical institute is engaged in imparting under-graduate courses, post-graduate courses Ph. D programs in the field of engineering, architecture and science, it would not be entitled to exemption provided under Sr. No. 66 of the exemption notfn. hence, it would be liable to pay applicable GST. LEGAL OPINION 1.1 Security and Intelligence Services (India) Ltd. (hereinafter the querist ) is a company having its office at A - 28 29, Okhla Industrial Area, Phase - I, New Delhi, and is engaged in the business of providing security related services. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to intra-State supply of services with respect to specified description of supply of services mentioned thereunder. Serial No. 3 of the Table appended to the exemption notification provides as under: (Intentionally left blank) Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition 3. Chapter 99 Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority 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 243 W of the Constitution. Nil Nil 3.2 Clause (zf) appended to Part 2 of the aforesaid notification provides for the definition of governmental authority to have the same meaning as assigned to it in the Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) by an educational institution to its I students, faculty and staff; (b) to an educational institution. by way of, (i) transportation of students, faculty and staff, (ii) catering, including any mid-day meals Corporate, Tax and Business Advisory Law Firm New Delhi scheme sponsored by the Central Government, State Government or Union territory; (iii) security or cleaning or housekeeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution; up to higher secondary: Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. Nil Nil The term educational institution is defined under clause (y) of Part 2 of the notification to mean an institution providing services by way of, (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paration of plans for economic development and social justice; (b) 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 . 4.3 On perusal of the aforesaid article, it would be seen that the same provides for powers, authority responsibilities of Panchayats. The said powers, it would be seen, are endowed with respect to matters concerning inter alia economic development and social justice, implementation of schemes for economic development social justice including matters listed in the Eleventh Schedule to the Constitution. The Eleventh Schedule to the Constitution inter alia covers (a) poverty alleviation program, (b) education, including primary and secondary schools, (c) family welfare, (d) women and child development, (e) public distribution system, (f) maintenance of community assets, etc. 4.4 Article 243W, on the other hand provides for powers, authority and responsibilities of Municipalities. The said article is reproduced hereunder for ready reference: Art. 243W. Subject 10 the provisions of this Constitution, the Legislature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstitution upon the Panchayat or Municipality. Therefore, even if VNIT may qualify as a Governmental authority, the security services supplied by the querist in relation to the property belonging to VNIT would not be entitled to exemption in terms of the Sr. No. 3 of the exemption notification. 4.8 Whereas, Sr. No. 66 of the exemption notification specifically provides that the exemption thereunder would not apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. VNIT as an institute would get covered under the definition of educational institution , since it is engaged in imparting education as a part of a curriculum for obtaining a qualification recognised by law for the time being in force. However, VNIT as an educational institution is not engaged in providing pre school education and education up to higher secondary school or equivalent (i.e. junior college). Since VNIT as a technical institute is engaged in imparting under-graduate courses, post-graduate courses and Ph. D programs in the field of engineering, architecture science, it would not be entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 2(53) of the CGST Act, 2017, Government means the Central Government. B.2. As per section 3(23) of the General Clauses Act, 1897 the Government includes both the Central Government and any State Government. B.3. As per section 3(8) of the General Clauses Act, 1897, the Central Government, in relation to anything done or to be done after the commencement of the Constitution, means the President. B.4. As per Article 53 of the Constitution, the executive power of the Union shall be vested in the President and shall be exercised by him either directly or indirectly through officers subordinate to him in accordance with the Constitution, B.5. Further, in terms of Article 77 of the Constitution, all executive actions of the Government of India shall be expressed to be taken in the name of the President. Therefore, the Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President. B.6. Similarly, as per section 3(60) of the General Clauses Act, 1897, the State Government , as respects anything done after the commencement of the Constitution, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bilities of Municipalities, etc Subject to the provisions of this. Constitution, the Legislature of a State may, by law, endow (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government such law may contain provisions for the devolution of powers and responsibilities upon Municipalities; subject to such conditions as may be specified therein, with respect to (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule E2. The functions entrusted to a municipality under the Twelfth Schedule to Article 243W of the Constitution are as under: (a) Urban planning including town planning. (b) Regulation of land-use and construction of buildings. (c) Planning for economic and social de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) Fisheries (vi) Social forestry and farm forestry. (vii) Minor forest produce, (viii) Small scale industries, including food processing industries. (ix) Khadi, village and cottage industries. (x) Rural housing (xi) Drinking water. (xii) Fuel and fodder. (xiii) Roads, culverts, bridges, ferries, waterways and other means of communication. (xiv) Rural electrification, including distribution of electricity. (xv) Non-conventional energy sources. (xvi) Poverty alleviation programme, (xvii) Education, including primary and secondary schools. (xviii) Technical training and vocational education. (xix) Adult and non-formal education. (xx). Libraries. (xxi) Cultural activities. (xxii) Markets and fairs. (xxii) Health and sanitation, including hospitals, primary health centres and dispensaries. (xxiv) Family welfare. (xxv) Women and child development. (xxvi) Social welfare, including welfare of the handicapped and mentally retarded: (xxvii) Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes. (xxviii) Public distribution syst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rification plants run by PCMC for supply to city, Hospitals Dispensaries, run by PCMC, solid waste management, slum improvement undertaken by PCMC, which is for public at large. Hon ble Maharashtra Authority of Advance Ruling found that the said services are in relation to any functions entrusted to a Municipality under article 243 W of the Constitution. The agreement between the applicant and PCMC very clearly states that the applicant shall provide assistants to the security guards of PCMC. Hence, Hon ble Maharashtra Authority of Advance Ruling find that the applicant is entitled to the benefit of Notification no. dated 28.06.2017 Para I: Assessee contention 1.1. The Applicant is providing Security Services to VNIT. 1.2. VNIT has been conferred the Deemed university status and declared as an institute of National importance by an Act of Parliament, it would not be qualified as a Governmental authority as mentioned in Para G supra. 1.3. Pure service is not defined in the GST Act. However, it appears from the context that services involving no supply of goods are considered as pure service. 1.4. Serial no. 3 of Notification No. 12/2017, exempts only pure serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, exemption has been provided for intra-State supply of security or cleaning or housekeeping services, performed in such educational institution subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table (c) however, as per the proviso to Sr. No.66 of Notification No. 12/2017 C.T.(Rate) dated 28-6-2017 Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of preschool education education up to higher secondary school or equivalent. In view of the above, since VNIT is an educational institution, other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent, the contention of the applicant, that VNIT Nagpur, would not be entitled to the exemption provided under Sr.No. 66 of the exemption notification, appears to be correct. Para 15:- Statement of Relevant facts having bearing on the questions raised, as submitted by the applicant:- (i) In respect of 2nd Question Raised (in Para 14): Whether rate of tax on services provided to Visvesvaraya National Institu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as per details in their application. Jurisdictional Officer Sh. Deepak Kumar, Inspector, Mumbai West Commissionerate, also appeared. The application was admitted and called for final hearing on 02.05.2019. Sh. Rastogi, C.A. appeared made oral and written submissions. Jurisdictional Officer Sh. Mahale Suptt., Mumbai West Commissionerate, appeared and made written submissions. 05. OBSERVATIONS We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional office. The applicant has submitted that they are providing security services to Visvesvarayya National Institute of Technology, Nagpur (VNIT), an institute established under the scheme sponsored by Govt. of India and Govt. of Maharashtra and is one of the thirty National Institutes of Technology (NIT) in the country. VNIT has Deemed University status (under University Grants Commission Act, 1956). VNIT awards bachelors, masters and doctoral degrees in engineering, technology and architecture and runs nine Under-graduate and twenty one Post-graduate courses apart from Ph. D programs in the field of engineering, architecture and science. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btaining a qualification recognised by any law for the time being in force. GST on services being a legacy carried forward from the Service Tax regime, the explanation given in the Education guide of 2012 can be referred to understand the meaning of the term which reads as under; What it is the meaning of education as a part of curriculum for obtaining a qualification recognized by law ? It means that only such educational services are in the negative list as are related to delivery of education as a part of the curriculum that has been prescribed for obtaining a qualification prescribed by law. It is important to understand that to be in the negative list the service should be delivered as part of curriculum. Conduct of degree courses by colleges, universities or institutions which lead grant of qualifications recognized by law would be covered. Training given by private coaching institutes would not be covered as such training does not lead to grant of a recognized qualification. We find that the applicant has been given the status of a Deemed University by the University Grants Commission. The UGC was formally established 1956 as a statutory body of the Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ya National Institute of Technology, Nagpur (VNIT) is nil as per Serial no 3 of Notification No 12/2017-Central Tax (Rate) dated 28th June 2017. Sr. No. 3 of Notification No. 12/2017, exempts pure services provided to a Governmental authority 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 243 W of the Constitution. Thus it is seen that not all services supplied to Governmental authority are exempt from the provisions of goods and services tax. The services supplied should be in nature of, or conform to the function entrusted to them under the Constitution. Clause (zo to Part 2 of the above mentioned Notfn. defines governmental authority as : Governmental Authority 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 ninety per cent. 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 243G of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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