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TMI Blog2019 (12) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case at hand, the applicant is an Apex co-operative society, applicant registered as Apex Society under the Tamil Nadu Co-operative Societies Act 1983. It is not a Society under the Societies Registration Act 1860. It was established by the Industries Department of Government of Tamil Nadu based on the G.O. of State Government of Tamilnadu to develop Co-operative silk twisters, reelers, etc. The G.O. specifies that the Government s share contribution will constitute 51% of the total share capital of the Federation - Section 33 of Tamil Nadu Co-operative Societies Act 1983 stipulates that the elected members have voting rights while the functional directors and the Co-Opted member do not have any voting right though they may participate in meetings. Therefore, it is seen that though the Managing Director is appointed by Government of Tamil Nadu and a few of the other Functional Directors are also employees of Government of Tamil Nadu, the control of the Board or management vests with elected members who are elected by the member silk cooperative societies. Hence, the Government of Tamil Nadu does not control the applicant. It is seen that the applicant was established b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istration Act 1983 and they are also filing Income Tax returns claiming deduction under Section 80P of IT Act. They stated that it is not a statutory corporation and not state government undertaking. The Director of Sericulture is the Functional Register. 2.1 The applicant has stated that the objective of their Society is to support the development of Sericulture activities in Tami Nadu by supplying good quality silk in sufficient quantity at reasonable price to the Silk Handloom Weavers Cooperative Societies, Khadi and village Industries Board, Sarvodaya Sanghs etc. Raw silk is purchased from silk reelers through Government Anna Silk Exchange, Kancheepuram and the same is sold to twister members of TANSILK for twisting the silk yarn. Then the twisted silk yarn, purchased from the twisters is sold to Silk Handloom Weavers Cooperative Societies as per their requirement. Here, the transaction of twisted silk yarn attracts 5% GST. Sufficient stock of raw silk and ready silk is kept in the TANSILK godowns to fulfill the needs of consumers. 2.2 The applicant has stated that as per the notification No. 50/2018 Central Tax dated 13.09.2018 the provisions relating to TDS under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ask about applicability of Notification no.33/2017 (C.T) dated 15/09/2017 as amended by Notification No. 50/2018 dated 13.09.2018. They stated that they are Co-operative Society registered by registrar of industrial cooperative societies. They have members who are around 240 Co-operative societies of various silk owners. The equity of State Government is 0.43% and Government of India is 29.8% apart from Co-operative Society 69.77%. They stated that they will submit Registration Certificate RC No. mentioned in their Bye laws. They also stated that they will give details of the management of the applicant, appointment of the same, details of the GO s for formation, details of Board meeting of the same. 5.2 In the written submission furnished by the applicant during the PH held on 23.07.2019, they have stated that the application has been made seeking clarification in respect of applicability of TDS in respect of Cooperative Societies effective from 01.10.2018. They have approached the authority for advance ruling to seek clarification on whether the Notification 33/2017 CT dated 15.09.2017 is applicable to them since, they are not registered under the Societies Registration Act 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the applicant is to be raised from (1) members share capital contribution (2) Government Share Particulars and (3) loan from National Corporation of Development of Co-operative and the Governments Share Contribution will constitute 51% of the total share capital of the Federation. The applicant has sought advance ruling on the applicability of Notification No.33/2017(CT) dated 15.09.2017 relating to the Provisions of Tax Deduction at Source (TDS). 7.2 From the various submissions of the applicant, the following are observed: The applicant is a Co-operative Apex Body controlled by the Tamilnadu Cooperatives Societies Act 1983(herein after referred as Societies Act) The administrator is the Joint Director of Sericulture and The director of Sericulture, Salem is the Functional Registrar of this Co-Operative Organisation The applicant By-Laws Registered by the Director of Industries and Commerce and the Registrar of Industrial Co-operatives effective from 17.04.1978 and is in Operation from 09.09.1978 It was constituted by Government of Tamil Nadu through Industries department vide G.O. Ms. No. 832 of the Government of Tamilnadu dated 31st May 1979, stipul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative of the Director of Handlooms and Textiles, Chennai; One representative of the Tamilnadu Khadi and Village Industries Board, Chennai; the Joint Director of Sericulture, Office of the Director of Sericulture, Salem; and the Managing Director of the Federation, appointed by the Government. The elected members have voting rights while the functional directors and the Co-Opted member do not have any voting right. AS per Section 33 of Tamil Nadu Co-operative Societies Act 1983, the management of the registered society vests with the board, The functional director is a paid officer of the society or an officer of the Government or representative of apex society or RBI or NABARD there are three varieties of societies of which apex society like the applicant should not have more than 29 members. The co-opted members and functional directors shall have the right to participate at the meetings of the board but shall not be entitled to vote at or contest for any election in the registered society in their capacity as such members. The Government shall appoint a managing director to the apex society As per Section 80(9) of the societies Act, the Audit Report of the Ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are made liable to deduct TDS: 1. an authority /board/any body set up by an Act of Parliament/State Legislature with fifty-one percent or more participation by way of equity or control to carry out any function; 2. an authority /board/any body established by any Government with fifty-one percent or more participation by way of equity or control to carry out any function; 3. Society under the Societies Registration Act, 1860 established by the Central/State Government or a Local Authority; 4. Public sector Undertakings. 7.6 In the case at hand, the applicant is an Apex co-operative society, applicant registered as Apex Society under the Tamil Nadu Co-operative Societies Act 1983. It is not a Society under the Societies Registration Act 1860. It was established by the Industries Department of Government of Tamil Nadu based on the G.O. of State Government of Tamilnadu to develop Co-operative silk twisters, reelers, etc. The G.O. specifies that the Government s share contribution will constitute 51% of the total share capital of the Federation. However, the submissions of the applicant states that the equity share holding of the Government at the maximum had be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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