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TMI Blog2021 (8) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... are registered under GST with GSTIN. 33AAAA15004R1ZO. The applicant has sought Advance Ruling on: 1. Whether Indian Institute of Management, Tiruchirapalli, Tiruchirappalli (IIM) is a Government Entity under GST Law. 2. If the answer to question is in the affirmative, whether 2.1 The applicant is liable to deduct tax at source (TDS) under Section 51 of the CGST Act, 2017. 2.2. Whether the applicant is required to discharge Liability on reverse charge basis on supply of services as per Section 9 (3) and 9 (4) of the CGST Act, 2017. 2.3 Whether the entry provided as under is applicable A) Serial No.3 of Notification 12/2017 is available to IIMT. 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 (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. 3A - Chapter 99 - Composite supply of goods and serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he functions as per the IIMT Act 2017, the applicant engages certain suppliers to provide certain services like pure labour services and supply of composite services. 2.2 On the Interpretation of Law the applicant has stated that they are a Government entity in view of the following: "Government Entity" means an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority." The applicant has stated that the initial corpus fund of the institute is provided by the Government of India by way of Grants. Thus, it can be seen 100% of the initial corpus (akin to share capital in case of the body corporate) is fully provided by the Government of India. They have submitted few relevant extracts of IIM Act 2017 as under: "9. (1) Every Institute shall be a not-for-profit legal entity and no part of the surplus, if any, in revenue of such Institute, after meeting all expenditure in regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CT (Rate) dated 28.06.2017. 3.1 Due to the prevailing pandemic situation and in order not to delay the proceedings, the applicant was addressed through the email address mentioned in their application to seek their willingness to participate in the digital hearing vide email dated 06.07.2020. The applicant consented and the hearing for the admission of application was held on 06.08.2020. The authorized representative, Shri. V. Ramkumar, appeared for the hearing. He reiterated their written submissions and they were asked to furnish the following: 1. Gazette Notification notifying IIMT as corporate body. 2. Details of Board of Governors with equity on control and finance 3. Write up on the goods/ services envisaged for which applicability under Section 9(3)/9(4) and applicability of SI.No.3/3A. It was also recorded that on receipt of above another hearing may be extended for deciding on the admission of the application. 3.2 In furtherance to the above hearing, the applicant vide their letter dated 13.09.2020 submitted the Copy of Indian Institute of Management Act, 2017. They also stated the following: i. In respect of works contract service the tenders for construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services and paying GST on them. In respect of certain security agencies which are not Body Corporate, they are liable to pay GST under reverse charge mechanism via S.No. 14 of Notification No. 29/2019, this is covered u/s.9(3) 4. In respect of legal fees paid to advocates they are liable to pay GST under reverse charge mechanism via S.NO. 2 of Notification No. 13/2017. This is covered U/s.9(3) 5. In respect of online education journals and periodicals provided to educational institution by the person located in non-taxable territory, they are exempted from payment of IGST for this imports in terms of SL. No. 10 of the Notification No; 09/2017IT(R) dated 28/06/2017. Hence they are liable to pay IGST on online non education journals and periodicals imported under reverse charge mechanism. This is covered under Notification 10/2017. 6. Section 9(4) is not applicable to them 3.4 The write up submitted by the applicant was found lacking in stating the scope of work, terms and conditions of work, payment and the sample invoices/contract. A letter dt. 10.12.2020 was sent to them asking them to furnish the said details. In reply the applicant subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any function entrusted to a Municipality under article 243W of the Constitution is to be decided by the Advance Ruling Authority ; * the AAR may decide on the applicability of the notification No.11/2007 dated 28.06.2017. 5.1 The center jurisdictional authority, has concurred with the submissions of the applicant and has stated that they have no other comments to offer. They have also stated that no proceeding is pending against the applicant. 6. We have carefully examined the statement of facts, supporting documents filed by the Applicant, all the additional submissions made during the hearing and thereafter and the submissions of the Jurisdictional authorities. The applicant is an educational institution established with the objective of imparting high-quality management education and training. They have been established under the Indian Institute of Management Act, 2017 and in the course of discharging functions entrusted, they have been engaging suppliers to provide certain services like pure labour services and supply of composite services. They have sought ruling on the following questions: 1. Whether Indian Institute of Management, Tiruchirappalli (IIM) is a Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of advance ruling.- (1) The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only- (a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the applicant. (2) The advance ruling referred to in sub-section (1) shall be binding unless the law, facts or circumstances supporting the original advance ruling have changed. From the above provisions, it is found that * as per Section 9(3) of the ACT, the provisions of this Act shall apply to such recipient as if he is the person ' liable 'for paying the tax in relation to supply of such goods or services or both; * chapter dealing with the provisions of Advance Ruling, starts with the wordings 'unless the context otherwise requires' * definition of 'Advance ruling' means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in relation to any function entrusted to a Municipality under article 243W of the Constitution. 3A - Chapter 99 - Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 percent 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." and Whether Composite supply of works contract provided to the applicant is covered by Serial No.3 (vi) of Notification 11/2017 dated 28th June 2017. The applicant has contended that they are entitled for exemption under S1.No.3 & 3A of Notification 12/2017 as they are rendering educational services which is covered under Twelfth Schedule under Article 243W as well as in Eleventh Schedule under Article 243 G of Constitution of India; and that the exemption is claimed in respect of pure services such as security services, man power services, etc/composite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is noted that the applicant institute was originally established in the year 2011 as a society registered with the Registrar of Societies, Tamilnadu under the auspices of the Ministry of Human Resources Development with the Chairman to be appointed by the Central Government, two representatives including a financial advisor nominated by the Department of Higher Education, Ministry of HRD, Four representatives from Industry, commerce, labour and thrust areas nominated by the Central Government, Two representatives nominated by the State Government from departments concerned including Chief Secretary of Tamilnadu etc.. The IIM Act 2017 was enacted wherefrom the applicant becomes an entity set up by an Act of Parliament in as much as the said Act in S.3 defines 'existing institute' as that specified in Column 3 of the schedule i.e., Indian Institute of Mnagement, Tiruchirappalli, a society registered under the Tamilnadu Societies Registration Act,1975 and 'Institute' under the Act specified in Column 5 of the Schedule i.e, Indian Institute of Management, Tiruchirapalli. Further the institute was initially and also after the enactment of the IIM Act, has been receiving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3). In this regard, Notification no.13/2017 dt. 28.06.2017 is examined in respect of services received by the applicant namely, security and Legal services. The said notification provides as follows in respect of security services:- Sl.No. Category of Supply of Services Supplier of service Recipient of Service 14 Security Services (Services provided by way of supply of security personnel) provided to a registered person: Provided that nothing contained in this entry shall apply to,- (i)(a) a Department or Establishment of the Central Government or State Government or Union Territory: or (b) local authority; or (c) Governmental agencies; Which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 of the said Act and not for making a taxable supply of goods or services; or (ii) a registered person paying tax under section 10 of the said Act. Any person other than a body corporate A registered person, located in the taxable territory. From the above provisions, it is found that the security services provided by any person other than a body corporate, received by a registered per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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