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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 ..... am - 631 501 (hereinafter known as TANSILK or Applicant) is registered under the GST Act 2017 Vide GST No.33AAAAT0361J1ZR. The Applicant has sought Advance Ruling on the following question: Whether TDS provision under GST Act is applicable to the Co-operative Society since it is Registered under Tamil Nadu Cooperative Society Act of 1975 and not under society registration act 1860 (21 of 1860) They have submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and TNSGST Rules 2017. 2. The applicant stated that they are a Co-operative society registered under Tamil Nadu Cooperative Societies Registration 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 rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2019 stated that the their shareholding pater is 'A Class members - Cooperative Societies' -69.77%, Government of Tamil Nadu -0.43% and `Government of India' 29.8%. They are trading in raw silk (exempted from GST) and Ready silk yarn (taxable at 5% GST). They also stated that their question is not about the validity of the TDS provisions of the CGST Act and they had filed the application only with reference to the Notification No. 50/2018 dated 13.09.2018 seeking the applicability of the same since the notification do not cover Cooperative Societies for TDS purpose and requested a ruling. 5.1 The applicant was again heard on 23.07.2019. They gave a written submission and stated that they are seeking to modify the question to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of policy and administration and as such it is not governed by the State and Central Governments. They have also submitted the list of 229 'A' Class Members who are having voting right and another list of 70 Federation Associate members who do not have the voting right. 7.1 We have carefully examined the Oral and written submissions made by the applicant. We find that the applicant is an Apex society registered under Tamil Nadu Co-operative societies Act 1961 with head quarters at Kancheepuram. Director of Industries and Commerce has registered the same with a view to hold the weavers, Reelers and members in Sericulture Industry as provided in G.O.Ms. No 832 dated 31st May 1979. The capital structures 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 Apex Society is to be laid before the Legislative Assembly in the prescribed manner. * As per its bye-laws, its member societies are Silk producer Cooperative Societies engaged in Silk Industry. Its objectives is to procure raw silk from silk reelers through Government Anna Silk E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 been at 38.86% in 1980 and currently at 30%. Therefore, it deduces that the applicant is not a body with 51% or more participation of the Government by way of equity. It is seen from Section 33 of Tamil Nadu Co-operative Societies Act 1983, the management of the registered society vests with the board of Directors. In this case, It is governe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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