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TMI Blog2021 (11) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... trusted to a Municipality under article 243W of the Constitution - The renting of immovable property services by the applicant is not liable for exemption under the provisions of Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017. Whether TDS provisions will be applicable in case where the supply of services is exempt? - HELD THAT:- The impugned services supplied by the applicant are liable to tax and therefore not exempt. Thus the TDS provisions under the relevant section 51 of the GST Act are applicable in the subject case. As the Applicant is not registered under GST and provide services to Social Welfare Department (Samaj Kalyan Department), a Department of State Government, then whether TDS notification issued under section 51 would be applicable for deduction of TDS? - HELD THAT:- TDS notification issued under section 51 would be applicable for deduction of TDS in the subject case. In case TDS is deducted, whether applicant would be entitled for refund of the same? - HELD THAT:- The said question pertains to entitlement of refund and is not covered under Section 97 of the CGST Act, 2017 and therefore we refrain from answering this question. - GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, made by Shri Borade Tukaram Pundalik, the Applicant are as under:- 2.1 The applicant co-owns immovable property situated at Nashik, which is given on rent to Sahayak Ayukt Samaj Kalyan Vibhag, Public Welfare Department (PWD), Maharashtra Government. All the co-owners, including the Applicant, hold proportionate share in the property in three separate agreements. The rental income and co-owner details as are under: Sr.No. Particulars Agreement 1 Agreement 2 Agreement 3 1. Property name and address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued under IGST Act, the person, who is making intra / inter-state taxable supply and having an aggregate turnover upto prescribed limit computed on PAN India basis, has been exempted from obtaining registration. At present, the threshold for services in Maharashtra is INR 20 lakhs. In view of the threshold, it can be said that TDS provisions are not applicable in the instant case. 2.6 Further as per the provision of subsection (5) of section 51, a deductee can claim credit of TDS deducted in his credit ledger. It is also evident from this provision that the registered person can claim credit. Hence, this provision is applicable only in case of registered supplier. 2.7 Even further, as per GSTR FORM -07 (TDS return), GSTIN of deductee is required to be provided since tax deducted would reflect into the electronic cash ledger of said deductee onto GSTN Portal. Hence, it can be said that in case of unregistered supplier, the said mechanism is not intended to be applicable. 2.8 Even the Law Committee of GST Council clarified in the Standard Operating Procedure (SOP) issued on 28.09.2018 that, tax deduction is not required to be made under GST Tax where the payment is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to any function entrusted to a Municipality under article 243 W of the Constitution'. 2.14 In this regard, applicant submits that the services provided are renting of immovable property services and thus, it's a pure service (as no specific goods are supplied). Further, the services are given to Samaj Kalyan Vibhag (Social Welfare Department) of State Government of Maharashtra. 2.15 Additionally, Article 243G of Constitution of India is reproduced as under 243G. Powers, authority and responsibilities of Panchayats. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self- government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to: (a) the preparation of plans for economic development and social justice; (b) the implementation of schemes for economic development and social justice as may be entrusted to them including those in relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act, 2017 is applicable in case of ... payment made or credited to the supplier (hereafter in this section referred to as the deductee ) of taxable goods or services or both , where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees 2,22. In, view of the aforesaid, unless the supply is taxable , the provisions of Section 51 of CGST Act will not be applicable. Additionally, applicant is not registered for GST purposes (as he has exempt income). Hence, TDS is not liable to be deducted in the instant case. 03. CONTENTION - AS PER THE CONCERNED OFFICER: The Jurisdictional/concerned officer has made submissions citing certain provisions of the CGST and has arrived at the conclusion as under:- a. In the instant case supply of service by applicant is exempted under CGST Act 2017 and applicant is not registered under CGST ACT 2017 / MGST Act 2017. b. Tax deduction is not required in the instant case. Supply of service by applicant is exempted under CGST Act 2017 and not to be treated as liable for deduction under section 51 of CGST Act, 2017. c. Since supply of service by applicant is exempted under CGST Act 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccommodation of underprivileged girls is exempt from GST. 5.3.2 We observe that, the first question pertains to liability of GST on the applicant, i.e. whether the impugned service is taxable or exempt under the GST Laws. 5.3.3 The applicant has submitted that the total amount received by him per annum is ₹ 18.26 lakhs, which is below the threshold amount above which liability to pay GST accrues. It is seen from the submissions that there is an overlapping of Plot Numbers in respect of the co-owners for example applicant has mentioned that Plot nos. 4, 5 6 belongs to him. However it is also seen that Plot No 4 5 belongs to other co-owners. However, the applicant has not made any detailed submissions stating the actual percentage of the owner/co-owners in the said property. We therefore do not address the said submissions made by the applicant in support of being below threshold GST turnover limit and therefore non-taxable, due to non-submission of details 5.3.4 The applicant, vide additional submissions dated 08.10.2021, has also submitted that the impugned supply undertaken, is exempt under the provisions of Notification No. 12/2017- C.T. (R) dt 28.06.2017 becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clude that the subject activity is a supply of pure services (condition 'a' mentioned in para 5.3.6 is satisfied). 5.3.9 Further, we observe that the said pure services are supplied to a department of the State Government and therefore we are of the opinion that the said pure services are rendered to the State Government. Thus condition 'b' mentioned in para 5.3.6 is also satisfied. 5.3.10. Further, the third condition of Entry No. (3) of Notification No. 12/2017-CT(R) dated 28.06.2017 is that pure services should be provided to a Government Entity, etc., 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. 5.3.11 Article 243W of the Indian Constitution states as under: Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow:- The Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Munici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions to state as to how his activities are covered under Article 243G/243W of the Constitution. There are no submissions made to show that the impugned services are supplied by the applicant 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. 5.3.14 Given the aforesaid, we find that even though the applicant as per his submission is supplying Pure Services, in light of insufficient material on record, it is not possible for us to find whether the said services are supplied by the applicant 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. 5.3.15 Hence, in view of the above, the renting of immovable property services by the applicant is not liable for exemption under the provisions of Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017. 5.4.1 The second question raised by the applicant is whether TDS provisions will be applicable in case ..... 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