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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 ..... 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 structures/components, Staff Quarters, Pump Chamber, Boundary Wall, Distribution System, Tube wells, Pumping Machinery, OHSR etc. * As per Tender Acceptance Memo No. 6971 dated 24.07.2019, the total cost of the work is 376.95 lacs. Costs allocated under different heads, as shown in the sheet enclosed with the Tender Acceptance Memo, are as under: SI. No. Component establishment Amount 1 Repair of civil structures, Pumping machinery 38,22,690 2 Consumables 37,42,920 3 Establishment 3,01,27,044 Total 3,76,92,654 (Say Rs. 376.95 lass) * Costs towards 'Repair of civil structures, Pumping machinery and Consumables' represent expenses on account of supply of goods and cost towards Establishment is towards supply of service. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to a Municipality under article 243W of the Constitution. Applicant's interpretation of Law/or Facts 1.6 That Sl. 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] exempts from payment of GST any "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 64.97 lacs (97.92%) and that of goods is Rs. 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 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]. 1.11 That it is also not in dispute that the activities undertaken by the applicant under Tender Acceptance Letter No. 6971 dated 24.07.2019 are in relation to management, maintenance and repair of Water Supply 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 watery 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 of the Constitution i.e. functions entrusted to a Municipalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Exemption Notification. Under the previous service tax regime, the exemption was limited to certain functions specified in SI. No. 25(a) of the ST Notification, whereas, under the GST the ambit has been broadened to include any such functions that are performed by a panchayat or a municipality under specific provisions of the Constitution. These functions are in the nature of public welfare service that the governments on their own, and sometimes through governmental authorities/entities, do provide to the citizens. When the activity is in relation to any such function, the supply to the governments or governmental authorities/entities or local authorities is exempt from paying GST under SI. No. 3 or 3A of the Exemption Notification, provided it is a pure service or a composite supply where supply of goods does not constitute more than 25% o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment 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 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]. 4.3 ln order to ascertain the applicability of the notification no. 12/2017 on the present contract of the applicant, the nature of work needs to be examined and for claiming exemption under SI. No. 3A above, following conditions are required to be fulfilled: a) It exempts Composite supply of goods and services; b) The value of supply of goods should not be more than 25 per cent. of the value of the said composite supply; c) Exemption to such composite supply is when it is made to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity; and d) Such composite supply should be by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(R), dated 28.06.2017 as amended by Notification No. 2/2018-CT(R), dated 25.01.2018issued under GST Act, being 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 to a Municipality under article 243W of the Constitution. Therefore, the above supply is exempt from GST. 4.8 As per Section 51 of the CGST Act, 2017, a government entity is entitled to deduct tax at source under GST at the rate of 1% on payments made to the supplier of taxable goods a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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