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TMI Blog2021 (1) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... as amended Notification No. 2/2018-CT(R), dated 25.01.2018? HELD THAT:- The applicant has entered into a contract agreement with Public Health Department, Government of Haryana for Water Supply Scheme and Sewarage Scheme at Samalkha Town, Distt. Panipat (Haryana) - The Public Health Department is under the Ministry of Health of the Government of Haryana and hence, it is a State Government within the meaning of and for the purpose of Entry No. 3A of Notification No. 12/2017-CT(Rate), dated 28.06.2017 as amended by Notification No. 2/2018-CT, dated 25.01.2018 [Corresponding State Notification No. 47/ST-2, dated 30.06.2017 as amended by Notification No. 22/ST-2, dt. 25-01-2018]. It is evident that the said work order is in the nature of composite supply of work contract providing both goods and services. Supply of goods includes consumables such as diesel, petrol, grease, transformer oil, copper wires, nut bolts, rubber sheets etc. for repair/maintenance of water supply system. For sewerage system, consumables are kits and masks for sever men, diesel Mobil oil used in engines for cleaning of sever lines, appliances for cleaning of blocked sever lines, dewatering pumps etc. These good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office in the application, Om Parkash Contractor, is registered under the provisions of the Central Goods and Services Tax Act, 2017 read with the provisions of the Haryana State Goods and Services Tax Act 2017 (hereinafter known as the "Assessee/Applicant). 1.2 That the applicant is a civil contractor engaged in executing government works which include construction of civil structure, repair, maintenance and renovation of such works. 1.3 The applicant has applied for seeking advance ruling under section 97 (1) of the CGST Act, 2017 for a Work Contract allotted by Public Health Department, Government of Haryana as per the terms in their tender as annexed with the application. 1.4 That further it has been detailed by the applicant in the contract and appurtenant to other supporting documents that there are 2 contracts: a) Contract for Water Supply Scheme at Samalkha Town, Distt. Panipat (Haryana) • Work has been allotted vide Tender Acceptance Memo No. 6971 dated 24.07.2019 issued by the Executive Engineer, Public Health Engineering Division No. 2, Panipat (Haryana). • The various activities to be undertaken under this work are Operation & Maintenance of stru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of supply of goods and cost towards Establishment is towards supply of service. The cost of supply of goods (Repair of civil structures, pumping machinery and consumables) comes to ₹ 1,35,222/- and the balance amount of ₹ 64,97,308/- lacs is towards supply of services i.e. Establishment expenditures. In % terms, supply of goods accounts for 2.04% of the total cost of the works and supply of services accounts for 97.92%. Thus, the cost of supply of goods (2.04%) is less than 25% of the total cost of composite supply of goods and services. 25% of the total cost of composite supply of goods and services is ₹ 16.59% [66.35 (x) 25%]. 1.5 That the work contract allotted as discussed above is in the nature of 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal cost of the composite supply. In other words, as per the Estimate Sheet, the total cost of supply is ₹ 376.95 lacs out of which the cost of supply of services is ₹ 301.27 lacs (79.93%) and that of goods is ₹ 75.65 lakhs (20.07%). 1.9 That similarly, as per the Estimate Sheet enclosed with the Tender Acceptance Letter No. 6966 dated 24.07.2019, which has also been certified by the Executive Engineer of the concerned Public Health Department of the Government of Haryana, the cost of supply of services accounts for more than 75% of the total cost of the composite supply, and the cost of supply of goods accounts for not more than 25% of the total cost of the composite supply. In other words, as per the Estimate Sheet, the total cost of supply is ₹ 66.35 lacs out of which the cost of supply of services is ₹ 64.97 lacs (97.92%) and that of goods is ₹ 1.35 lakhs (2.04%). 1.10 That indisputably, Public Health Department is under the Ministry of Health of the Government of Haryana and hence, it is a State Government within the meaning of and for the purpose of Entry No. 3A of Notification No. 12/2017-CT(Rate), dated 28.06.2017 as amended by Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinued under GST vide SI. No. 3 and 3A of the Exemption Notification No. 12/2017-CT (R), dated 28.06.2017. SI. No. 25(a) of Notification No. 25/2012-ST exempts "services provided to the Government, a local authority or a governmental authority by way of water supply, public health, sanitation, conservancy, solid waste management or slum improvement and upgradation. The Circular further explains in relation to the specific issue of ambulance service to the Government by a Private Service Provider (PSP) that such service is a function of 'public health' entrusted to municipalities under Art. 243W of the Constitution, and, therefore, eligible for exemption under SI. No. 3 or 3A of the Exemption Notification. 1.15 That as also observed by the Authority for Advance Ruling, under GST West Bengal in Re: Arihant Dredging Developers Pvt. Ltd [2019 (25) G.S.T.L 582 (A.A. R.-GST) = 2019 (6) TMI 550 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL, "3.2 The above Circular leaves no doubt that the phrase 'in relation to any function', as applied to Si. No. 3 or 3A above, makes no substantial difference between Si. No. 25(a) of the ST Notification and SI. No. 3 or 3A of the Exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven the fact that as per applicant's version his aforementioned services are exempt from GST under Notification No. 12/2017-CT(R), dated 28.06.2017 as amended Notification No. 2/2018-CT(R), dated 25.01.2018. 3. Record of Personal Hearing Personal hearing in the case was conducted on 12.06.2020 via video conferencing which was attended by Sh. Ram Kishan, (POA). The applicant had reiterated the submissions made in their application which were taken on record. After detailed discussions, the application was admitted being covered by clause (b) & (e) of section 97(2) of the CGST/HGST Act 2017. As regard merits, the decision was reserved. 4. Discussion and finding of the authority 4.1 As per the documents placed on record it is understood that the applicant has entered into a contract agreement with Public Health Department, Government of Haryana for Water Supply Scheme and Sewarage Scheme at Samalkha Town, Distt. Panipat (Haryana). 4.2 The Public Health Department is under the Ministry of Health of the Government of Haryana and hence, it is a State Government within the meaning of and for the purpose of Entry No. 3A of Notification No. 12/2017-CT(Rate), dated 28.06.2017 as ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2% in second contract. Thus, the major part of the contract involves services i.e. more than 75% of the work involves services which is required for fulfilment of this notification, we hold the same. 4.6 The activities undertaken by the applicant are in relation to management, maintenance and repair of Water Supply Scheme and operation and maintenance of Sewerage Scheme. The said activities are covered under the function listed at SI. No. 11 and 29 of the Eleventh Schedule of Article 243G of the Constitution, i.e. functions entrusted to a Panchayat for making available drinking water to the people at large and maintenance of community assets. Further, the applicant's activities are also covered under the function listed at SI. No. 5 of the Twelfth Schedule of Article 243W and under Article 243W(a)(ii)of the Constitution i.e. functions entrusted to a Municipality for supply of water for domestic purpose and for provision and maintenance of sewerage system in towns and cities respectively. 4.7 Since the major part of the contract, i.e. more than 75% is "Services", we find that the said contract qualifies for the benefit of Serial No. 3A of Notification 12/2017-CT( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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