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TMI Blog2021 (11) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... t present there is no supply of goods. Thus, the applicant is rendering Pure Services to MMRDA. Whether 'MMRDA' would be covered under the definition of 'Government Entity' as given in Notification No. 31/2017 dated 13.10.2017? - HELD THAT:- MMRDA is a body established by the Government of Maharashtra under Mumbai Metropolitan Region Development Authority Act, 1974 ('MMRDA Act'). As per the preamble of the Act, the MMRDA has been established for the purpose of planning, coordinating and supervising the proper, orderly and rapid development of the Mumbai Metropolitan Region (MMR); to formulate and execute plans, projects and schemes for the development of the MMR and to provide for matters connected with the purposes - It is clarified that MMRDA is constituted and established by the State Government of Maharashtra with 100% participation by way of Equity or Control to carry out the function entrusted to it by the State Government viz. Preparation of Regional Development Plans , Providing financial assistance for significant regional projects, Providing help to local authorities and their infrastructure projects, coordinating execution of projects and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. (A) FACTS AND CONTENTION - AS PER THE APPLICANT: The submissions made by MAHA MUMBAI METRO (M3) OPERATION CORPORATION LIMITED, the applicant, are as under- 2.1 The applicant, having their principal place of business at C-14, 15, Ground Floor, MMRDA Office Building, Bandra Kurla Complex, Bandra East, Maharashtra, 400051 is engaged in supply of service with bearing GSTIN-27AAMCM7279C123 . Applicant is engaged in providing Local land Transport services of passengers by railways, metro, monorail, bus, tramway, autos, three wheelers, scooters and other motor vehicles. The SAC for the service is 9964 and GST rate in relation to same is 18%. 2.2 Applicant is wholly owned subsidiary of Mumbai Metropolitan Region Development Authority (herein referred as MMRDA ) whose aim is to integrate the Operation and Maintenance of all Metro corridors under one authority with objectives as follows: (a) To independently carry out business of Operation and Maintenance (O M) related functions of all Metro lines in Mumbai Metropolitan Region. (b) To carry out Planning, Identification, Development and Implementation of all Non-Fare Box Revenue measures. (c) Execute Property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture, sale, service etc. 2.7 As per Section 7 of the CGST Act, the term 'supply' also includes transaction in goods or services between related persons or distinct persons, whether or not for a consideration. It would be relevant to note that the scope of supply includes supply of goods or services in different forms viz; sale, transfer, barter, exchange, license, rental, lease or disposal, made or agreed to be made for a consideration by a person in the course or furtherance of business. While goods have been defined in terms of Section 2 (52) of the CGST Act to mean every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. In terms of Section 2(102) of the CGST Act services is defined to mean anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. Reimbursemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Services by governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution ii) Services by a Governmental Authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution. 2.12 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.] 2.13 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove facts, it is evident that the applicant is a Government authority as per the Notification No. 12/2017-Central Tax dated 28th June 2017. 2.18 Urban Planning is a function entrusted to Municipality under Article 243 W of the Constitution. The applicant has invited our attention to Ministry of Urban Development, Government of India in K-14011/07/2007/Metro/UT dt.29-08-2007, addressed to all the Chief Secretaries of the States and Union Territories, informing the decision that the urban transport and urban planning must go together and that urban transport is an integral part of urban development, which will help in ensuring that urban transport remains an integral part of urban planning at all the times and cities are planned in a wholistic manner - Urban Transportation also is a part of Urban Planning. 2.19 All the activity is in the nature of urban transportation and urban planning and the same is covered under the purview of the functions of Municipality under article 243W read with Twelfth Schedule to the constitution of India, and the same fall within the purview of the aforesaid exemption notification 12/2017-Central Tax (Rate), dated : 28th June 2017. 2.20 The cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considering the Governments to be clients of APITCO. The question now is whether there was service provider-client relationship between the assessee and the governments. Here, again, the nature of the amounts paid by the governments to the assessee is decisive. A client must not only pay the expenses of the service but also the consideration or reward for the service to the service provider. Admittedly, in the present case, there was no payment, by any government to the assessee, of any amount in excess of what is called grant-in-aid . Thus any service provider-client relationship between the assessee and the governments is ruled out. It is true that the assessee had executed the governmental schemes mainly through their engineers (technocrats) but this was not enough for the revenue to bring the assessee within the ambit of scientific or technical consultancy as clearly held by this Bench in the case of Administrative Staff college of India (supra). [An organization rendering scientific or technical consultancy service under Section 65(105) (za) of the Finance Act 1994 must be a science or technology institution. The assessee-company has not been shown to be such an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld on 20.07.2021. Authorized representatives of the Applicant, Shri Vishal Sheth, CA and Shri Rajkumar Kendre, General Manager were present and made submissions with respect to admission of their application. Jurisdictional officer Shri. K. Shrikhande, STO, C-903, Bandra East, Nodal Division 5, Mumbai was also present. 4.2 The application was admitted and called for final e-hearing on 12.10.2021. The Authorized representatives of the applicant, Shri. Vishal Sheth, CA and Shri. Rajkumar Kendre, GM (HR) were present. Jurisdictional officer Shri. K.N. Shrikhande, STO, MUM-VAT-C-903, Nodal-5 was absent. The jurisdictional officer wanted a week's time to file written submission, same was granted. The applicant raised new issue by referring to certain exemption under schedule entry of Tax rate. 4.3 Heard the matter. 05. OBSERVATIONS AND FINDINGS: 5.1 We have gone through the facts of the case, documents on record and written/oral contentions made by both, the applicant and as well as the jurisdictional officer at the time of hearings. 5.2 M/s MAHA MUMBAI METRO (M3) OPERATION CORPORATION LIMITED , the applicant, wholly owned subsidiary of Mumbai Metropolitan Regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of DPRs, which comes within the purview of the functions of Municipality under Article 243 read with Twelfth Schedule to the Constitution of India, and accordingly, falls within the purview of Sr. No. 3 of Notification 12/2017- Central Tax (Rate) dated 28.06.2017 which provides exemption to 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. During the course of the final hearing, the applicant reiterated that even though it is providing such consultancy services without any supply of goods, the fact of the matter is that they are not receiving any consideration for the same. All that the applicant is receiving is reimbursement from MMRDA which cannot be treated as consideration received. The authorized representative also stated that assuming without admitting, even if the reim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 12/2017-CT(R) dated 28.06.2017 is as under:- SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) 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 1 [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. Nil Nil 5.12 For any supply to be covered under Sr. No. 3, the supply should be in respect of only Pure Services, secondly such Pure Services must be provided to the Central Government, State Government or Union territory or ..... 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S.R. 690(E), dated the 28` June, 2017, namely:- In the said notification, (i) in the Table, - (a) against serial number 3, - A, in item (iii), in column (3), for the words Government, a local authority or a Governmental authority , the words Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity shall be substituted; B. in item (vi), in column (3), for the words a local authority or a Governmental authority the words a local authority, a Governmental Authority or a Government Entity shall be substituted; C. in items (iii) and (vi), in column (5), for the existing entry, the following entry shall be substituted, namely: - Provided that where the services are supplied to a Government Entity, they should have been procured by the said entity in relation to a work entrusted to it by the Central Government, State Government, Union territory or local authority, as the case may be (iii) in paragraph 4, after clause (viii), the following clause shall be inserted, namely: - (ix) Governmental Authority means an authority or a board or any other body, - (i) set up b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be nominated by the State Government; (xii) the Chief Secretary to the Government of Maharashtra; (xiii) the Municipal Commissioner of the MCGM (xiv) the Secretary to the Government of Maharashtra, Urban Development Department; (xv) the Secretary to the Government of Maharashtra, Housing Department; (xvi) the Managing Director, City and Industrial Development Corporation of Maharashtra; (xvii) the Metropolitan Commissioner; 5.20 Thus from the above, we clearly find that MMRDA is constituted and established by the State Government of Maharashtra with 100% participation by way of Equity or Control to carry out the function entrusted to it by the State Government viz. Preparation of Regional Development Plans , Providing financial assistance for significant regional projects, Providing help to local authorities and their infrastructure projects, coordinating execution of projects and/or schemes in MMR, etc. in the State of Maharashtra and therefore MMRDA is clearly covered under the definition of 'Government Entity' as can be seen from the definition of a 'Government Entity' mentioned above. Further, Section 46A of the MMRDA Act pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has submitted that, its aim is to integrate the Operation and Maintenance of all Metro corridors under one authority by way of : independently carrying out business of Operation and Maintenance (O M) related functions of all Metro lines in Mumbai Metropolitan Region ; carrying out Planning, Identification, Development and Implementation of all Non-Fare Box Revenue measures and executing Property development and construct or maintain or lease out various facilities in relation to rail transport system. 5.25.2 At present none of the said activities mentioned in 5.25.1 is being carried out by the applicant. As per applicant's submissions the only activity being carried out is consultancy services and accordingly it is held that the provisions of Entry No. (3) Of Notification No. 12/2017-CT(R) dated 28.06.2017, is applicable to the present case. 5.25.3 However, as and when the supply as mentioned in para 5.25.1 is undertaken by the applicant, the situation will change and this order will not be applicable in that particular situation/case. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under Section 98 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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