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TMI Blog2019 (3) TMI 1703X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant in this case are within their right to charge and collect GST from the Service Recipient in this case. The services provided by the applicant in this case are not in relation to any function entrusted to any Panchayat or Municipality under Article 243G and Article 243W of the Constitution respectively. Hence, benefit of exemption from tax in terms of Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 286-2017 and the corresponding notification under MGST Act, 2017 is not available to the applicant - Thus, the applicant is within its rights under the CGST and SGST Acts for charging GST to the Service Recipient on the service value for the services provided under the Contract. - Order No. 01/MIZORAM/AAR/2018-19 - - - Dated:- 8-3-2019 - Shri H.K. Hawngliana, Member (State Tax) and Sanjay Prasad, Member (Central Tax) Shri Rama Mohan Giri, CA, for the Assessee. ORDER Sheladia Associates, Inc. USA (hereinafter referred to as the applicant) have filed an application on 27-12-2018 under Section 97 of the CGST Act, 2017 and MGST Act, 2017 read with Rule 104 of the CGST Rules, 2017 and MGST Rules, 2017 in For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Union Territory or any Local Authority or a Governmental Authority by way of am 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. Entry Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 are as under : Sl. No. Chapter, Section Heading Group or Service Code (Tariff) Description of Service Rate (%) 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 243W of the Constitution. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r improving 81 KM of State Highways and Mizoram District Roads for enhanced connectivity. This brings us to the question of whether Development or Maintenance of State Highways and District Roads is a function of Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India. 4.4.1 Panchayats and Municipalities have clearly demarcated territorial limits. Panchayats and Municipalities are responsible for maintenance of public infrastructure that is located within their limits or boundaries. Functions of a Panchayats and Municipality cannot travel beyond their territorial boundaries. 4.4.2 State Highways and District Roads begin from the end of Panchayat or Municipal limits. Thus, the State Highways and District Roads are not within the boundaries or limits of Panchayats and Municipalities. 4.4.3 Development and maintenance of State highways and District Roads are always the responsibility of State Governments as they are beyond the territorial limits of a Municipality or a Panchayat. 4.4.4 It is an admitted fact that the applicant was awarded the Contract by the Public Works Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -A, Section 7 Terms of Reference, Para 1 are Construction Supervision and Contract Administration Consultancy Services for Works Contract for the upgradation of 81 KM length of State Highways and Major District Roads in the State of Mizoram. The Financial Assistance has been provided by International Development Association (IDA). 6.2 In terms of Para 3, Section 7 Terms of Reference. Appendix A (page No. 36 of the Contract the objectives of the Consultancy Services are :- (a) To review the detailed project reports, design of structures, wayside amenities and debris disposal locations etc. and advise Client of any issue and discrepancies that require correction/ addressing both before commencement of works, during and post-construction. (b) To ensure high quality construction with full compliance to Engineering Designs and Drawings, Technical Specification and other Contract Documents within the specified time schedule. (c) To monitor the pre-construction activities. (d) To assist in taking remedial actions to avoid slippages, cost overruns, delays by the contractor. (e) To demonstrate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Contract as per Section 2(119) of the CGST Act, 2017/MGST Act, 2017 as there is no involvement of supply of goods. It is not a composite supply also as defined under Section 2(30) of the CGST Act, 2017/MGST Act, 2017. Thus, being a Pure Service, it qualifies for notification benefit vide Sl. No. 3. Chapter 99 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 and also in terms of the corresponding notification under MGST Act, 2017. Hence, the first criteria is met for the availability of the notification benefit. 7.1 The Recipient of the service in this case is the State Government of Mizoram, through Public Works Department. Thus, on this account also the service rendered by the Consultant qualifies for the notification benefit. The second criteria for the availability of notification benefit is also met. 7.2 The third criteria for availing notification benefit is that the 'Service' should not be in relation to any function entrusted to any Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution. The applicant is rendering Project M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, including hospitals, primary health centres and dispensaries. (24) Family welfare. (25) Women and child development. (26) Social welfare, including welfare of the handicapped and mentally retarded. (27) Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes. (28) Public distribution system. (29) Maintenance of community assets. 7.3 Similarly, functions entrusted to a Municipality under Article 243W are as under : (1) Urban planning including town planning. (2) Planning of land-use and construction of buildings. (2) Planning for economic and social development. (3) Roads and bridges. (4) Water supply for domestic, industrial and commercial purposes. (5) Public health, sanitation conservancy and solid waste management. (6) Fire services. (7) Urban forestry, protection of the environment and promotion of ecological aspects. (8) Safeguarding the interests of weaker sections of society, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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