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TMI Blog2021 (11) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2017 covers the question on which advance ruling can be sought i.e. "(b) applicability of a notification issued under the provisions of this Act". Further, the issue has been addressed in Dolphin Techno Waste Management Pvt. Ltd. [2020 (35) G.S.T.L. 413 (A.A.R. - GST - W. Mahalakshmi Mahila Sangha [2020 (37) G.S.T.L. 385 (A.A.R. - GST- Kar.)] etc. 3. 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? 4. In case TDS is deducted, whether we would be entitled for refund of the same? The questions raised earlier were as under:- 1. In the instant case, whether the services provided by us to Social Welfare Department (Soma] Kalyan Department) will be liable for TDS under section 51 of CGST Act, 2017? 2. 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? 3. Whether the small busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts 2.3 The case under consideration is covered under section 51 of the CGST Act, 2017 that is Tax Deducted at Source by the Government. 2.4 As per Section 51(1) of the CGST Act, Tax Deducted at Source has been defined to include all services provided to Government under CGST Act, and the gross value to deduct TDS should be relatively more than 2,50,000 in order to be eligible for deduction of Tax deducted at source. 2.5 According to provisions of section 51 of CGST Act, 2017 read with Section 20 of IGST Act, 2017, a deductor is required to deduct TDS at prescribed rates as CGST and SGST/UTGST (in case of intra-state) on the payment made or credited to supplier w.r.t. procurement of 'taxable goods or services'. 2.6 In terms of provisions of section 22 of CGST Act read with notification 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 lacs. In view of the threshold, it can be said that TDS provisions are not applicable in the instant case. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is separately ascertainable and assessed for income tax individually at the hand of each co-owner. Whether the Applicant is required to be registered under section 22(1) of the GST Act will, therefore, depend on his gross turnover, ascertained separately from the other co-owners, exceeding the threshold as provided under the Act." 2.14 Given the aforesaid, TDS is not liable to be deducted in the instant case. ADDITIONAL SUBMISSIONS DATED 08.10.2021:- 2.15 As per the provisions of Notification No 12/2017-Central Tax (Rate) dated 28th June 2017, 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 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. It can be observed that there are three conditions to satisfy for the exemption: a. Service provided should be a 'pure service' b. Service should be provided, inter-alia, 'to' State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule." 2.20 In this regard, Twelfth Schedule of Constitution of India provides as under: "TWELFTH SCHEDULE (Article 243W) "1. ... 3. Planning for economic and social development 9. Safeguarding the interest of weaker sections of society, including handicapped and mentally retarded 10. ..." 2.21 In the instant case the State Government is taking the property of rent for welfare of under-privileged section of the society and in particular, girls. Thus, as the services are provided to 'Samaj Kalyan Vibhag' for "Magasvargiya Mulinche Shashkiya Vastigruha" the services will be covered under the functions entrusted under Article 243W and / or 243G. 2.22 Given the aforesaid, as the services are covered under the Sr. No. 3 of Not. No. 12/2017-CT dated 28.06.2017 (as amended from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeared made oral and written submissions. Jurisdictional Officer appeared and requested for time to make submissions. 4.3 We heard both the sides. 05. OBSERVATIONS AND FINDINGS: 5.1 We have perused the documents on record and gone through the facts of the case and the submissions both oral and written, made by the applicant. The applicant redrafted the questions raised by her vide e-mail dated 27.09.2021. 5.2 The applicant is a co-owner of immovable property situated in Nashik. The details of the plot are mentioned in the subject application. During the course of the hearing the applicant submitted that a building has been constructed on the plots owned by the applicant along with other co-owners and the said building is given on lease to the 'Samaj Kalyan Vibhag' (Department of Social Welfare) of the State Government of Maharashtra for "Magasvargiya Mulinche Shashkiya Vastigruha" (Government Hostel for Girls from the Backward class). Thus, the applicant has submitted that the building constructed on the plots is used as a government residential accommodation for housing girls from the backward class, by the Government of Maharashtra. 5.3.1 The first revised question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Nil Nil 5.3.6 To answer the query of the applicant regarding the admissibility of entry no. (3) of Notification No. 12/2017-CTR in the subject case we need to find a. whether the subject supply is a supply of Pure Services b. provided to the Central Government, State Government or Union territory or local authority or a Governmental authority c. 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. 5.3.7 Schedule II of the CGST Act, 2017 sets out the activities which are to be treated as supply of goods or supply of service wherein "renting of immovable property" is treated as supply of service. 5.3.8 Thus, we find that in the instant case, the supply of leasing of immovable properties by the applicant is a supply of services. The applicant has submitted that there is no supply of goods whatsoever, along with the supply of leasing services in the subject case and therefore we conclude that the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propriate 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 relation to the matters listed in the Eleventh Schedule." Article 243G of the Constitution refers to a list of functions enumerated in the Eleventh schedule. Entries 26 and 27 of the Eleventh schedule which is relevant states the following: 25. Social welfare, including welfare of handicapped and mentally retarded. 27. Welfare of weaker sections, and of scheduled castes and the scheduled tribes. 5.3.13 The applicant has submitted that the Samaj kalyan Vibhag of the Government of Maharashtra has taken the immovable property on rent from the applicant to house the girls from the backward class communities which can be considered as a welfare measure undertaken by the Government for the under-privileged section of the society. Other than making this statement, the applicant has not submitted any evidence or submissions to state as to how her activities are covered under Article 243G/243W of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed in the body of the order, the questions are answered thus - Question 1:- In the instant case, whether the services provided by us to Samaj Kalyan Department, State Government of Maharashtra (Social Welfare Department) for residential accommodation of underprivileged girls is exempt from GST? Answer: Answered in the negative. Question 2:- Whether TDS provisions will be applicable in case where the supply of services is exempt? We also would like to draw attention to the fact that 97 (b) of CGST Act, 2017 covers the question on which advance ruling can be sought i.e. "(b) applicability of a notification issued under the provisions of this Act". Further, the issue has been addressed in Dolphin Techno Waste Management Pvt. Ltd. [2020 (35) G.S.T.L. 413 (A.A.R. - GST - W.B.)], Mahalakshmi Mahila Sangha [2020 (37) G.S.T.L. 385 (A.A.R. - GST - Kar.)] etc. Answer:- TDS provisions will be applicable in the subject case.. Question 3:- 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? ..... X X X X Extracts X X X X X X X X Extracts X X X X
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