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TMI Blog2022 (1) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of the exemption at SI.No. 3 above. 'Pure Service' is not per-se defined under GST, the same can be constituted in general term as any supply which is either deemed as service under schedule II of CGST Act or which are not covered under the definition of Goods shall be categorized as pure services - the activity of supply of various services under the gamut of 'Handling' by the applicant without any involvement of goods either as supply or consumed while undertaking such services are 'Pure Services' even if the supply is a composite supply of such services. It is also seen that the supply is made to the Departments of Tamilnadu, therefore, supply is made to the State Government. Whether the said activity is undertaken by the applicant 'in relation to' any function entrusted to a Panchayat under article 243G of the Constitution or Municipality under article 243W of the Constitution? - HELD THAT:- In the case at hand, the activities of the applicant, i.e., handling of Dhoties and Sarees/ School Uniforms from Co-Operative societies to public distribution system/ Revenue Department are definitely 'in relation to' the functions entrust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed and acting as a Nodal Agency to inspect and procure Cost Free Distribution Sarees Dhothies and Cost Free School Uniform under Government Flagship Schemes. The Cost Free Distribution of Sarees and Dhothies Scheme has been introduced during the year 1983 as one of the flagship schemes by the Government of Tamil Nadu. This scheme has been continued by the Government of Tamil Nadu with the twin objectives of providing continuous employment to 14,000 handloom weavers and 54,000 Power loom weavers in the State and for distribution of Sarees and Dhothies to the poor people living in rural and urban areas in Tamil Nadu. For Pongal 2021, 167.39 lakh Sarees and 167.29 lakh Dhothies were procured from Weavers Co-operative Societies at a cost of ₹ 484.25 crore and dispatched to all the Taluks of Tamil Nadu for onward distribution to the beneficiaries on the eve of Pongal every year. SI. No Variety Quantity (in lakh units) Value (in lakh) Sarees Dhothies Sarees Dhothies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Handloom 2.71 244.18 2. Pedalloom 86.83 5145.07 3. Powerloom 411.58 26188.17 TOTAL 501.12 31577.42 2.2 The Uniform cloth required by Adi Dravidar and Tribal Welfare Department, Backward Classes and Minorities Welfare Department and Most Backward Classes and De-notified Communities Welfare Department are also being supplied by the Department of Handlooms and Textiles. The uniform cloth requirements of various Departments for the academic year 2020 - 2021 are furnished below: Name of the Department Total cloth requirement (in lakh metres) Number of Students Social Welfare Department (I to VIII Std.) 501.12 3924848 Most Backward Classes and De-notified Communities Department (IV to X Std.) 3.51 17517 Backward C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment which are covered under Twelfth Schedule of Article 243W, SI. No.3- planning for social and economic development and SI. No.9- safe guarding the interest of weaker sections. The Eleventh Schedule of article 243 G of the Constitution lists the functions at SI. No. 16 poverty alleviation programme of Handlooms and Power looms weavers living in the village/Town and at SI. No. 28 Public distribution systems - through which Sarees/ Dhothies are distributed to the Ration Card holders and SI. No. 17- Education including primary and Secondary education, the students studying from 1st to 8th standard are given 4 sets Uniform under the Scheme Noon Meal programme every year. By the above schemes, both producer and beneficiaries are poor and their survival is ensured by these schemes. They have contended that As per serial number 3 of the table given in GST Notification No. 12/2017 - Central Tax (Rate) Dated:28.06.2017, Pure Services (excluding working contract services or other composite supplies involving supply of any goods) provided to the state Government were exempted from payment of GST. As per the services rendered by M/s. Co-optex towards Handling of Dhothies and Sare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter RC.No. 821/2021/A4 dated 15.11.2021 has stated that:- In the G.o. (Ms) No. 123 Handlooms, Handicrafts, Textiles and Khadi (D2) Department dated 05.06.2013, the Handling charges of Tamil Nadu Handlooms Weavers Co-operative Society includes following items. 1. To receive proposals for Handling Charges from Tamil Nadu Handloom Weavers Co-operative Society. 2. Examination of the proposals of Handling Charges as to whether the expenditure were actually incurred and claimed. 3. To find out whether the expenditure claimed as Handling Charges were incurred in connection with implementation of Free Distribution of Sarees and Dhoties Scheme and Free Uniform Scheme. 4. To find out correctness of the claim for Handling Charges with reference to manpower deployed and the salary and wages actually incurred etc., 5. To find out the correctness of usage of manpower as to whether more number of persons were deployed over and above the requirement. 6. To verify the rate of freight, cartage of cooly with reference to the quantum of Sarees and Dhoties and Uniform Materials handled and with reference to the connected vouchers and to find the correctness of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges, if it is considered as Composite supply as per Notification No. 12 /2017- Central Tax (Rate) dated 28.06.2017, exemption is not applicable to the Applicant. 5.1 The Center Jurisdictional Authority, vide their letter C.No. GEXCOM/TECH/MISC/2791/2021-Tech dated 27.12.2021 stated that there is no proceedings in respect of the applicant on the questions raised. They have further opined that the activities of the applicant of procurement, inspection of quality of the goods and distribution to the departmental units in every Taluk of the State is 'Pure Service' and they do not supply goods; these services are provided in relation to functions entrusted to a Panchayat under Article 243 G of the Constitution and functions entrusted to a Municipality under Article 243 W of the Constitution as enumerated in their application; thus, these services are eligible for the benefit of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 and thus no GST is Payable. 6.1 We have considered the application filed by the applicant and various submissions made by them as well as the comments of the State and Central Tax officers. The applicants have stated that they have been appointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and SI. No. 17 Education including Primary and Secondary Education, the students studying from 1st to 8th standard are given 4 sets of uniform under the scheme Noon Meal Programme every year. The applicant claim exemption under SI.No. 3 of Notfn No. 12/2017-C.T.(Rate) dated 28.06.2017 in respect of 'pure services' provided to the Tamil Nadu State Government. 7.2 The aforementioned entry is examined as under: SI. No Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 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 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 From the above, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restricts to 'Pure services' and it does not mean that it is not available to composite supplies of such services as opined by the State Jurisdictional Authority. Therefore, we find that the activity of supply of various services under the gamut of 'Handling' by the applicant without any involvement of goods either as supply or consumed while undertaking such services are 'Pure Services' even if the supply is a composite supply of such services. It is also seen that the supply is made to the Departments of Tamilnadu, therefore, supply is made to the State Government. 8.2 The only limb which is to be examined is whether the said activity is undertaken by the applicant 'in relation to' any function entrusted to a Panchayat under article 243G of the Constitution or Municipality under article 243W of the Constitution. The function entrusted to the Panchayat by Article 243G of the Constitution of India are listed here under:- Eleventh Schedule (Article 243-G) 1. Agriculture, including agricultural extension. 2. Land improvement, implementation of land reforms, land consolidation and soil conservation. 3. Minor irrigation, water ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cruelty to animals. 16. Vital statistics including registration of births and deaths. 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. 18. Regulation of slaughterhouses and tanneries. 8.3 We have gone through the Government orders, minutes of meeting of permanent standing committee and invoices raised as submitted by the applicant and the list of functions entrusted to,- (i) the panchayats under Article 243G of the Constitution of India and (ii) the Municipalities under Article 243 W of the Constitution of India. The applicant has claimed that their activity is 'in relation to' the activities at SI. No. 3 - Planning for social and economic development and sl. No. 9 - safe guarding the interest of weaker sections of Twelfth Schedule of Article 243W and sl.No.16 Poverty Alleviation Programme of eleventh schedule of Article 243G of the constitution in as much as the scheme promotes and provides work to the Handloomers and pedal loomers living in the village/Town and as at SI. No. 28 Public Distribution systems - through which Sarees / Dhothies are distributed to the Ration Card Holders and SI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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