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TMI Blog2020 (1) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered as sovereign functions and accordingly the parking fees collected by them through the applicant does not acquire the nature of statutory fee so as to be outside the scope of any tax. Thus, the parking fees collected by the applicant are not in nature of statutory fees - thus, the parking lot services provided by the Contractor appointed by the Market Committee, are not exempt under Notification No. 12/2017 as the Market Committee is not a Government Authority as per the definition provided in the clause 2(zf) of the notes appended to N/N. 12/2017. The parking services provided by the Contractor appointed by the Market Committee, not exempt under Notification No. 12/2017 as the Market Committee is not a Government Authority - Marketing committee (Mandi Board) does not qualify under the definition as provided in clause 2(zf) of the notes appended to N/N. 12/2017 - The activity / services of parking provided by the applicant falls under heading 9967 and attracts GST@ 18%. - AAR/GST/PB/011 - - - Dated:- 6-9-2019 - NAVDEEP BHINDER, AND PARUL GARG Present for the Applicant: Sh. Amit Bajaj, Advocate Sh. Sunil Dutt, CA Sh. Parvinder Kumar Pabbi, Husband of Prop. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under Notification No. 12/2017 , falls under the ambit of Section 97(2) (a) - classification of any goods or services or both and applicability of a notification issued under the provisions of this Act . Hence, the application of the applicant is eligible for a ruling by the Punjab State Advance Ruling Authority. V. SUBMISSIONS BY THE APPLICANT: The applicant has, inter-alia, stated that 1. That they have been appointed as a contractor for providing parking lot services at the place of the market committee (Mandi Board) at Jalandhar; 2. That the Market Committee is a Government Authority as per the definition of Government Authority provided in the clause I(zf) of the notes appended to Notification No. 12/2017 as it is established by the State Government. 3. That the services provided by the Governmental Authority by way of any activity in relation to any function entrusted to a municipality under Article 243W of the Constitution is NIL rated service notified under Notification No. 12/2017 CGST (Rate) Dated 28.06.2017 as amended upto date. Article 243 W of the Constitution read with twelfth schedule covers the parking lot services provided by the Market Committ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Personal Hearing on behalf of the applicant. They submitted their side of the argument in the form of a written submissions relying on Notification No. 12/2017 dated 28.06.2017, copy of tender, copy of Argument (Ikrarnama) and case laws in their favour. They requested to examine and consider their submissions and to pass a suitable ruling. They have nothing more to add. VII. DISCUSSIONS AND FINDINGS: 1. From the analysis of the applicant s submissions and statements, the following issue merit careful consideration for the favour of the final decision : Whether the parking lot services provided by the Contractor appointed by the Market Committee, which is a Government Authority is exempt under Notification No. 12 of 2017 as the parking lot activity is covered under Article 243 of the Constitution. 2. The Applicant is a registered Proprietorship concern registered under the CGST Act, 2017 and Punjab SGST Act, 2017. The applicant has been appointed as a contractor for providing parking lot services at the place of the Market Committee at Jalandhar. As per applicant s contention, the Market Committee is a Government Authority as per the definition of Government Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Panchayat as defined in clause (d) of article 243 of the Constitution; (b) a Municipality as defined in clause (e) of article 243P of the Constitution; (c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund; (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006; (e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; (f) a Development Board constituted under article 371 and article 371J of the Constitution; or (g) a Regional Council constituted under article 371A of the Constitution; ii) The term Government Authority has also been defined in the Notification No. 12/2017-CentraI Tax (Rate) and the same is reproduced below: 2(zf) 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 90 per cent. or more participation by way of equity or control, to carry out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Government. As per Article 154 of the Constitution, the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or indirectly through officers subordinate to him in accordance with the Constitution. Further, as per article 166 of the Constitution, all executive actions of the Government of State shall be expressed to be taken in the name of Governor. Therefore, State Government means the Governor or the officers subordinate to him who exercise the executive powers of the State vested in the Governor and in the name of the Governor. 4. Who is a local authority? Ans : Local authority is defined in clause (69) of section 2 of the CGST Act, 2017 and means the following: a Panchayat as defined in clause (d) of article 243 of the Constitution; a Municipality as defined in clause (e) of article 243P of the Constitution; a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund; a Cantonment Board as defined in sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate from the State and cannot be regarded as the Central or a State Government and also do not fall in the definition of local authority . Thus, regulatory bodies and other autonomous entities would not be regarded as the government or local authorities for the purposes of the GST Acts. 9. Are various corporations formed under the Central Acts or State Acts or various government companies registered under the Companies Act, 1956/2013 or autonomous institutions set up by special Acts covered under the definition of Government ? Ans : No. The corporations formed under the Central or a State Act or various companies registered under the Companies Act, 1956/2013 or autonomous institutions set up by the State Acts will not be covered under the definition of Government and therefore, services provided by them will be tax-able unless exempted by a notification. iv) Article 243Q of the Constitution of India reads as under: 243Q. Constitution of Municipalities (1) There shall be constituted in every State, (a) a Nagar Panchayat (by whatever name called) for a transitional area, that is to say, an area in transition from a rural area to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and to enforce the provisions of the Act, Rules Bye-laws framed there under. It also includes to establish a market therein providing such facilities for persons visiting it in connection with the purchase, sale, storage, weighment and processing of Agricultural produce concerned. The Board may from time to time direct these market committees to control and regulate the admission to the markets. Market Committees are service rendering agencies and their main source of income is market fee. Mandi Board has not been established by the State Government for providing Parking Lot services to the people. It is purely discretionary and optional of the part of Mandi Board depending on their business requirements. It is pertinent to mention that functions entrusted to Mandi Board are not the functions entrusted to a Municipality. The functions entrusted to Municipality are listed in the Twelfth Schedule to Article 243W of the Constitution and the same are as under: 1. Urban planning including town planning. 2. Planning of land- use and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State including welfare activity of State could not be construed as sovereign exercise of power. Hence, every governmental function need not be sovereign . State activities are multifarious. From the primal sovereign power, which exclusively inalienably could be exercised by the Sovereign alone, which is not subject to challenge in any civil court to all the welfare activities, which would be undertaken by any private person. 9. In the present case, although the Punjab State Agricultural Marketing Board was established on 26th May, 1961 under the Punjab Agricultural Produce Markets Act; 1961, its function cannot be considered as sovereign functions and accordingly the parking fees collected by them through the applicant does not acquire the nature of statutory fee so as to be outside the scope of any tax. Thus, the parking fees collected by the applicant are not in nature of statutory fees. 10. In view of above, it is held that the parking lot services provided by the Contractor appointed by the Market Committee, are not exempt under Notification No. 12/2017 as the Market Committee is not a Government Authority as per the definition provided in the clause 2(zf) of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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