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TMI Blog2022 (5) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 2017. Whether PCSCL is eligible to take claim benefits of Government or Local Authority of Governmental Authority or Governmental Entity tee. Exemption as per Notification 12/2017-Central Tax (Rate) dated 28/06/2017)? - HELD THAT:- The question pertains to the recipient of the impugned supply and therefore cannot be answered in terms of the provisions of Section 95 of the CGST Act, 2017. Whether Renting of immovable Property Services provided to PCSCL exempt as per GST Law. If taxable then at what rate GST will be applicable? - HELD THAT:- In the instant case, pure services (in the form of Renting of immovable Property services), are supplied by the applicant to PCSCL. Thus, the first part of the conditions mentioned at Sr. No. 3 of the aforesaid 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 or a Governmental authority or a Government Entity. Thus, it is needed to discuss whether PCSCL can be considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f immovable property does not find mention in either Article 243 G or Article 243 W of the Constitution. Thus, Renting of immovable Property Services i.e. 'Pure Service' provided by the applicant to PCSCL, a Government Entity, are not by way of any activity in relation to functions entrusted to a Municipality under article 243W of the Constitution or entrusted to a Panchayat under Article 243 G of the constitution and therefore, the impugned service supplied by the applicant is not exempt under the relevant provisions of Notification No. 12/2017 - CTR dated 28.06.2017 as amended from time to time and therefore the applicant has to discharge GST @ 18%. Whether Utility charges recovered from PCSCL are exempt as per GST Law. If taxable then at what rate GST will be applicable? - HELD THAT:- The applicant has mentioned only a couple of lines in respect of the said matter, namely it has been mentioned that, the applicant collects utility charges (eg. Electricity charges) from PCSCL as Reimbursement and the said Utility charges are reimbursement of cost of actual facility used as per bill issued payable to third party - Other than above the applicant has neither made de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 purpose of this Advance Ruling, the expression GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT 2.1 The applicant, M/s. Auto Cluster Development and Research Institute (Auto Cluster) is a Company Limited by guarantee, formed under section 25 of Company Act 1956. Auto Cluster is Special Purpose Vehicle formed under cluster development scheme of Government of India. It aims to form clusters of enterprises having similar activities. A cluster, according to the programme, would be defined as a group of enterprises situated within an identifiable, contiguous and a practical area which produce similar products or render similar services. The cluster would have similar production process, energy consumption, technology used, pollution control measures, marketing strategies, communication channels and would face similar complications as well as opportunities in area on P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty Services is pure service. Utility charges are reimbursement of cost of actual facility used as per bill issued payable to third party. Considering all facts, Renting of immovable property and Reimbursement of utility charges will be exempted from GST as per Sr. 3, Chapter 99 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017. 03. CONTENTION - AS PER THE CONCERNED OFFICER: OFFICER SUBMISSION 17.12.2020:- 3.1 M/s. Auto Cluster Development and Research Institute, the applicant, headed by the Commissioner of Pimpri Chinchwad Municipal Corporation (PCMC) is a special purpose vehicle formed under cluster development scheme of the Government of India and aims to form clusters of enterprises having similar activities. Whether PCSCL is termed as Government or Local Authority or Government Authority or Government Entity as per GST Law? 3.2 Section (2) of CGST Act, 2017, defines the term Government and the term Local Authority . The terms Government Authority and Government Entity are not separately defined under the CGST Act, 2017. 3.3 It is claimed by the applicant that, PCSCL is a Government Authority by virtue of being jointly o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay GST. Whether Renting of Immovable Property Services provided to PCSCL exempt as Per GST Law. If taxable at what rate GST will be applicable. 3.8 Not exempt, PCSCL has to self-assess the services to GST from time to time by referring to the notifications etc., which are in public domain. Whether utility charges recovered from PCSCL are exempt as per GST Law. If taxable then at what rate GST will be applicable. 3.9 Not exempt, PCSCL has to self-assess the services to GST from time to time by referring to the notifications etc which are in public domain. Whether PCSCL liable to deduct tax at source (GST TDS) as per provisions of GST Act. 3.10 This is out of the purview of the Goods and Service Tax Act, 2017. Officer Submission 29.01.2021 (Via email) 3.11 Auto Cluster provides 'Renting of Immovable Property Services to Pimpri Chinchwad Smart City Limited (PCSCL), PCSCL is engaged in providing infrastructural facilities under the Constitution of India. Auto Cluster also collects utility charges (eg electricity charges) from PCSCL. 3.12 It is contended by applicant that, both the companies, Auto Cluster Development Research Institute a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions made by the applicant, we now take up their questions as under:- Q. 1 Whether PCSCL is termed as Government or Local Authority of Government Authority or Governmental Entity as per GST Law? 5.3.1 Section 95 of the CGST Act, 2017 states that, advance ruling means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 5.3.2 As per the submissions made, it is seen that the subject question raised is pertaining to the recipient of the impugned supply and is not 'in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant' and therefore cannot be answered in terms of the provisions of Section 95 of the CGST Act, 2017. Q.2. Whether PCSCL is eligible to take claim benefits of Government or Local Authority of Governmental Authority or Governmental Entity tee. Exemption as per Notification 12/2017-Central Tax (Rate) dated 28/06/2017)? 5.4 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 28.06.2017 as amended by Notification No. 02/2018-CTR dated 25.01.2018, is as under:- Sl.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 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 5.5.6 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal Authority means on authority or a board or any other body, - (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90 per cent. or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution. (zfa) 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. 5.5.10 In view of the above, we are required to ascertain whether PCSCL' would be covered under the definition of 'Government Entity'/Governmental Authority as given in Notification No. 32/2017 dated 13.10.2017 referred above. 5.5.11 As seen from para 5.5.9 above, a 'Government Entity' must be either set up by an Act of Parliament or State Legislatur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule of the Indian Constitution provides for the following functions (relevant) as under: 1. Regulation of land use and construction of land buildings. 2. Urban planning including the town planning. 3. Planiling for economic and social development 4. Urban poverty alleviation 5. Water supply for domestic, industrial and commercial purposes services 6. Fire Services. 7. Public health sanitation, conservancy and solid waste management 8. Slum improvement and up-gradation 9 10 11. Construction of roads and bridges 12. Provision of urban amenities and facilities such as parks, gardens and playgrounds 13. Promotion of cultural, educational and aesthetic aspects 14 . . 15 .. 16 17. Public amenities including street lighting, parking spaces, bus stops and public conveniences 18 5.5.17 Article 243G of the Indian Constitution states as under: Subject to the provisions of this Constitution the Legislature of a State may, by law, endow the Panchayats with such powers and authority and may be necessary to enable them to function as institutions of self-gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereby improving liveability of the whole City. In some cases, new areas to be developed around cities in order to accommodate the expanding population in urban areas. To fulfill the vision of the Government of India, Smart Cities are coming up in various States and the Pimpri Chinchwad Smart City is one such project for which PCSCL has been formed with the support of the Government of Maharashtra also. 5.5.20 However, in the instant case, it is clearly seen that even though the pure service (renting of immovable property services) is provided to PCSCL, a Government Entity, the said service, per se, cannot be considered as an activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution, or entrusted to a Panchayat under Article 243 G of the Constitution because the activity of renting of immovable property does not find mention in either Article 243 G or Article 243 W of the Constitution. 5.5.21 In view of the above discussions, we are of the opinion that, Renting of immovable Property Services i.e. 'Pure Service' provided by the applicant to PCSCL, a Government Entity, are not by way of any activity in relation to functi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liberations as held hereinabove, we pass an order as follows: ORDER (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the questions are answered thus - Question 1:- Whether PCSCL is termed as Government or Local Authority of Government Authority or Governmental Entity as per GST Law? Answer: - Not answered in view of discussions made above. Question 2:- Whether PCSCL is eligible to take claim benefits of Government or Local Authority of Governmental Authority or Governmental Entity (eg. Exemption as per Notification 12/2017-Central Tax (Rate) dated 28/06/2017)? Answer: - Not answered in view of discussions made above. Question 3:- Whether Renting of immovable Property Services provided to PCSCL exempt as per GST Law. If taxable then at what rate GST will be applicable. Answer: - Renting of immovable Property Services provided to PCSCL is not exempt as per GST Law and is taxable @ 18 % GST. Question 4:- Whether Utility charges recovered from PCSCL are exempt as per GST Law. If taxable then at what rate GST will be ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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