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TMI Blog2022 (2) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... under article 243W of the Constitution. In the instant case, pure services are supplied by the applicant to MCGM. This is because the applicant during the course of the personal hearing, stated that no goods are supplied by them at all, under the impugned agreement. Thus, the first part of the conditions mentioned at Sr. No. 3 of the aforesaid amended Notification is satisfied in the subject case - the second condition to be satisfied for availing exemption under the above referred Notification is that such pure services, as are being rendered in the subject case, should be supplied to the Central Government, State Government or Union territory or local authority. The applicant is supplying pure services to MCGM which is a local authority under the GST Laws. Thus, the second condition mentioned at Sr. No. 3 of the aforesaid Notification is also satisfied in the subject case. From a reading of the Section 63 of the Brihan Mumbai Municipal Corporation Act, 1888, it is crystal clear that the impugned activities, even though at the discretion of MCGM, are entrusted to MCGM by the State Government and such activities can be considered to be in the nature of functions or schemes en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of GST exemption on Comprehensive architectural services that includes architectural design, structural design, MEP design, HVAC services design, preparation of drawings etc for repairs/ restoration, reconstruction for development of recreation ground cum textile museum at United India Mills 2 3 at Kola chowky provided by the Applicant to Municipal Corporation of Greater Mumbai ('MCGM'). 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 FACTS: 2.1 Sir JJ College of Architecture Consultancy Cell, the 'Applicant', was formed as per the guidelines of the Council of Architecture, a statutory body under the Act of Parliament and University of Mumbai. The Government of Maharashtra has permitted the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that the supply of services under consideration are exempt by relying on the below mentioned interpretation of law and/or facts; a. The provision of service under consideration qualifies as 'supply' within the purview of GST b. The aforesaid supply is exempt under the provisions of GST law 2.7 In view of the provisions of Section 7 of the Central Goods and Services Tax Act, 2017, supply includes all forms of supply of services made or agreed to be made for a consideration in the course or furtherance of business. In the instant case, Applicant is providing comprehensive architectural services involving all the services as enlisted and summarized in Para 4 of Annexure 1, which are in the course and furtherance of business of the Applicant. Therefore, the aforesaid services qualify as supply within the purview of GST. The supply under consideration is exempt under the provisions of GST law 2.8 As per Sr. No. 3 of Notification no. 12/2017 - Central Tax (Rate) ('exemption notification') dated 28th June 2017 (as amended from time to time) Pure services (excluding works contract service or other composite supplies involving supply of any go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he state legislature to interpret the functions entrusted to the Municipality. The services provided by the applicant to MCGM are in line with the functions in S.63(c) and (d) of the Brihan Mumbai Municipal Corporation Act, 1888, which is part of state legislature governing the state. 2.14 Further, the service recipient is MCGM is a local authority and has legal recognition vide the Brihan Mumbai Municipal Corporation Act, 1888. 2.15 Given the above, it is evident that the Applicant is fulfilling all three conditions for the services being provided to fall within the ambit of the exemption notification as under: a. The supply by the applicant i.e. provision of comprehensive architectural services is in the nature of pure services b. The activity by MCGM for which pure services is rendered i.e. Repairs /restoration, reconstruction for development of recreation ground cum textile museum falls within the purview of the functions entrusted to municipality under article 243W of the Constitution of India c. Service recipient i.e. MCGM is a local authority 2.16 Hence, the supply under consideration is covered within the ambit of exemption notification and consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration may, in their discretion, provide from time to time, either wholly or partly, for all or any of the following matters, namely: (a) ; (c) the establishment, aiding or maintaining libraries, museums, art galleries, botanical or zoological collections ; Thus, the Discretionary function of the Municipality also includes 'aiding or maintaining museums'. The Comprehensive architectural services that includes architectural design, structural design, MEP design, HVAC services design, preparation of drawings etc for repairs/restoration, reconstruction for development of textile museum cum recreation ground is within the purview of the functions entrusted to the Municipality as per Article 243W. 2.17.6 Without prejudice to the above, it is iterated that in accordance with the general rules of interpretation and the principle of natural justice, any exemption notification should be construed liberally with the intent to benefit the applicant. Hence applicant requests that applicant may be allowed exemption from GST in respect of the impugned supply. 03. CONTENTION - AS PER THE CONCERNED OFFICER: OFFICER SUBMISSION DATED 21.06.2021:- 3.1 As per the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaken by the applicant are mentioned in para no. 4 of applicant's original submissions. The said agreement provides for supply of comprehensive architectural services by the Applicant to MCGM, professional fees for the provision of services, rights and obligations of the applicant, roles and responsibilities of MCGM, etc. 5.3 It is the contention of the applicant that, the impugned supply is exempt under Sr. No. 3 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017, as amended from time to time, in as much as the applicant is supplying pure services to MCGM, a local authority by way of an activity in relation to any function entrusted to a Municipality under article 243W of the Constitution. 5.4.1 The relevant Sr. No. 3 of Notification No. 12/2017 - Central Tax (Rate) dated 28 th June 2017 as amended by Notification No. 16/2021 - Central Tax (Rate) New Delhi, 18th November, 2021, with effect from 01.01.2022, is reproduced as under:- SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to a Municipality under article 243W of the Constitution is also satisfied or not. 5.5.4 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:- (a) 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 Municipalities, subject to such conditions as maybe specified herein, with respect to- i. The preparation of plans for economic development and social justice; ii. The performance of functions and the implementation of schemes as may be entrusted to them including those in relation to 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 responsibility conferred upon them including those in relation to the matters listed in the Twelfth Schedule. 5.5.5 Twelfth Schedule of the Indian Constitution provides for the following functions as under: 1. Regulation of land use and construction of land bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, botanical or zoological collections ; (d) the laying out or the maintenance of public parks, gardens or recreation grounds ; (e) .; ; (m) .; 5.5.8 Section 63 of the Brihan Mumbai Municipal Corporation Act, 1888 states that, the corporation may, in their discretion, provide from time to time, either wholly or partly, (c) for the establishment, aiding or maintaining libraries, museums, art galleries, botanical or zoological collections ; (d) the laying out or the maintenance of public parks, gardens or recreation grounds. 5.5.9 From a reading of the said Section 63, it is crystal clear that the impugned activities, even though at the discretion of MCGM, are entrusted to MCGM by the State Government and such activities can be considered to be in the nature of functions or schemes entrusted to the municipality by the State Government. Thus, we find that, the impugned activities are entrusted to the MCGM by the State Government and therefore the same are covered under clause (a) (ii) of Article 243W of the Constitution. 5.5.10 Further, we also reproduce Section 63A of the MCGM Act as under:- 63A. Where any duty has been imposed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity which it is not empowered to do so by the Mumbai Municipal Corporation Act 1888, an Act which has been promulgated by the State Government. Thus all activities, obligatory or voluntary, which are required to be performed by MCGM under the Mumbai Municipal Corporation Act 1888 will be considered as activities performed by MCGM as entrusted to it, by the State Government under the Mumbai Municipal Corporation Act 1888. 5.5.13 In view of the above, and in view of the oral submissions made by the authorized representatives of the applicant, during the course of the Final Hearing that, there is no supply of goods in the instant case, we find that that the third condition of Sr. No. 3 of the above referred Notification, viz. such pure services should be provided by way of any activity in relation to any function entrusted to a Municipality under article 243W of the Constitution is also satisfied in the subject case. 5.5.14 Therefore we hold that, the applicant is entitled for exemption under Sr. No. 3 of Notification No. 12/2017 - CTR dated 28.06.2017 as amended. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X
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