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TMI Blog2019 (11) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant and the contract is between the applicant and the corporation and there is no privity of contract between the applicant and the ultimate beneficiary. Further, the consideration for this contract is paid by the Corporation in full. Hence the service is provided by the applicant to the Corporation. In the instant case, the corporation is liable to pay the consideration for the composite supply of services of providing an energized bore well and hence the corporation would be deemed to be the recipient of supply of goods or services or both as per clause (93) of section 2 of the CGST Act and the supplier of this service is the applicant. Whether the corporations, which are receiving the service from the applicant, are Government entities within the meaning of the GST Act? - HELD THAT:- It is very clear that the corporations, Dr. B.R. Amedkar Development Corporation and Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited are both entities, established by the Government of Karnataka with 100% share capital and control to carry out the function entrusted by the Government of Karnataka. Hence they are clearly covered under the definition of Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing question: Applicability of Notification No. 2/2018 - Central Tax (Rate) dated 25/01/2018 with respect to SI No.3A of the notification in the Table, to the applicant. The contents of the Table are reproduced below. (1) (2) (3) (4) (5) 3A Chapter 99 Composite supply of goods and services in which the value of supply of goods 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. NIL NIL 3. The applicant concern furnishes some facts relevant to the stated activity: a. The applicant is engaged in drilling of Bore wells, in pursuance or work orders issued by some of the agencies under Social ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountant and authorised representative of the applicant appeared for personal hearing proceedings held on 31.12.2018, reiterated the facts narrated in their application. Further the authorized representative furnished additional written submissions after the hearing vide their letter dated 30.01.2019, inter alia stating as under: 5.1. The applicant, with regard to the issue that whether drilling of bore well is one of the objectives of minor irrigation, submitted that the Minor Irrigation Department is under Ministry of Minor Irrigation, Government of Karnataka and the Ground Water Wing of the said Department has the following functions : Groundwater resource estimation Groundwater Level monitoring Select sites for drilling borewell for domestic, agriculture and industrial purpose The above functions establish that one of the functions of Minor Irrigation Department is to identify the sites for drilling bore wells for agricultural purpose. 5.2 The applicant, with regard to the issue that whether Dr. B.R. Ambedkar Development Corporation Limited and Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited are Government Entities, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Charted Accountant during the personal hearing. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts. 7.2 At the outset, we would like to state that the provisions of both the CGST Act and the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the KGST Act. 7.2 The applicant has been awarded of contract works by the corporations of Karnataka Government such as M/s Dr. B.R. Ambedkar Development Corporation Limited, Schedule Tribes Welfare Department, Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited and other implementing agencies under Social Welfare Department, Government of Karnataka for providing the composite supply of drilling of bore wells for Irrigation purpose to small and marginal land owners of Schedule Caste/Schedule tribe/Other backward class farmers of economic weaker section, for agriculture purpose. 7.3 The applicant contends that the supplies are made to the Government entities and the said supply of provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recipient of supply of goods or services or both, means - a) Where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; b) Where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and c) Where no consideration is payable for the supply of service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting on behalf of the recipient in relation to the goods or services or both supplied; 7.8 In the instant case, the corporation is liable to pay the consideration for the composite supply of services of providing an energized bore well and hence the corporation would be deemed to be the recipient of supply of goods or services or both as per clause (93) of section 2 of the CGST Act and the supplier of this service is the applicant. 8. Regarding the question as to whether the corporations, which are receiving the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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. NIL NIL It is clear from the above entry that for any supply of service to be covered under the above entry, the following conditions are to be satisfied: (a) It should be a composite supply of goods and services in which the value of the supply of goods constitutes not more than 25% of the value of the said composite supply (b) The supply should be made to the Central Government, State Government or Union territory or local authority or a Governmental Authority or a Government Entity (c) The supply should be 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. In the instant case the supply is made by the applicant to the corporations, as described earlier and the value of the goods involved in the composite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Gram Panchayat, Taluk Panchayat and Zilla Panchayat respectively under Schedules I, II III of the said Act. The Taluk Panchayats, under Section 145, in Schedule II have been entrusted with the following activities under the major function IV, which reads as under: IV. Minor irrigation, water management and watershed development: (1) Assisting the Government and Zilla Panchayat in the construction and maintenance of minor irrigation works. (2) Implementation of community and individual irrigation works . It could be seen from the above that the function of implementation of individual irrigation works has been entrusted to the Taluk Panchayat. The activity of drilling bore wells and their energisation , involved in the supply of the applicant is clearly in relation to the said function entrusted to the panchayat by Government of Karnataka, stipulated under Article 243 G of the Constitution of India. Thus the third condition is also satisfied. 8.4 The service, being provided by the applicant, satisfies all the three required conditions and hence qualifies to be covered under entry No.3A to the Notification No. 12/2017 - Central Tax (Rate) dated 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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