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TMI Blog2022 (6) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaken by them for the Government amount to Supply as defined in section 7 of the CGS Act, 2017 and that the work undertaken is a service and hence not under dispute. Whether the works referred to in by the applicant is supply of goods or supply of services? - HELD THAT:- It is found from the definition of scope of supply, Composite supply and works contract and the terms of reference appearing in the work allocated to the applicant namely construction of 'Shaheed Dwaf at Banjarawala, Dehradun and construction of 'Creation of barrier free environment for PWDs and tourist rest houses in various district of Uttarakhand State', involves civil construction work viz. construction, repairs, etc. and hence falls under the definition of works contract service - on the basis of the two works contract, generalized view cannot be in respect of to any other work/ contract, by applying the same yard stick. Applicability of GST on the grants - HELD THAT:- By virtue of Notification No. 12/2017-CT (Rate) dated 28.06.2017 any supply of services by a Government Entity to Central Government, State Government' Union territory, local authority or any person specified by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under filed by M/s Garhwal Mandal Vikas Nigam Limited, Rajpur Road, Dehradun Uttarakhand, 248001, (herein after referred to as the applicant ), an undertaking of Government of Uttarakhand and registered with GSTIN- 05AACCG6021E1Z7 under the CGST Act, 2017 read with the provisions of the UKGST Act, 2017. In the application dated 17.01.2022, the applicant submitted that they are receiving consideration for implementation of various projects from Government/ Government Departments in the form of Grants and the said grants are utilized by way of procurement of services/goods from contractors for executing those projects. 2. In view of the above facts, 'the applicant' is seeking an advance ruling on following issues: (a) Whether the activities undertaken for implementing various construction/repair/renovation/addition/alteration projects by GMVN Ltd. for Central Government, State Government, Local Authority or Governmental Authority the consideration for which is received in the form of grants amounts to supply under the provisions of Goods Services Tax laws and are thus chargeable to GST? (b) In case the above activities amount to supply, whether the supply is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on the said date and re-iterated the submission already made in their application. Ms. Preeti Manral, Deputy Commissioner, SGST-Dehradun, Concerned Officer from State Authority was also present during the hearing proceedings. She presented the facts and requested the authority to decide the case on merits. 7. From the record submitted by the applicant we find that applicant is registered in Uttarakhand with GSTIN bearing no. 05AACCG6021E1Z7. Before proceeding in the present case, we would first go through the submissions filed by the applicant and the same is summarized as under: (i) Garhwal Mandal Vikas Nigam Limited (GMVN Ltd.) is an undertaking of Government of Uttarakhand and their main activity is to promote steady and sustained growth phase of the travel and tourism sector in Uttarakhand by making the destinations more accessible, more attractive with many facilities and amenities for the tourists in the Uttarakhand State. Further, they have two sections which are Engineering Section and Tourism Section. And this application pertains to the engineering section and reference to M/s GMVN Ltd. would refer to the engineering section. (ii) They also undertakes activitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract; Further, the definition of 'person' has been defined in section 2 of the CGST Act, 2017, which is as under; Section 2(84) - person includes- (g) any corporation established by or under any Central Act, State Act or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013; (j) a local authority; (k) Central Government or a State Government; From the above it is clear that any activity undertaken by one person to another for a consideration amounts to supply and Central State Government and Government Company are separate persons. Further, as per the Section 2 the 'Consideration' has been defined as under; Section. 2 (31) consideration in relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Central Government, State Government, Union territory or local authority, in the form of grants'. 8.6.2 We observe that by virtue of Notification No. 12/2017-CT (Rate) dated 28.06.2017 any supply of services by a Government Entity to Central Government, State Government' Union territory, local authority or any person specified by Central Government, State Government, Union territory or local authority is exempt from payment of GST, if the consideration received from Central Government, State Government, Union Territory or local authority, is in the form of grants. We find that from the wordings of the said notification it is clear that exemption is available, only, if the consideration received is in the form of grants and has to be utilized for the intended purpose only. The litmus test in such cases would be the character of the consideration and if it qualifies to be a grant then and only then the benefit under the provisions of Notification No. 12/2017-CT (Rate) dated 28.06.2017, is available. 8.6.4 In the instant case we find that in the letter No. 41/VI/2021-80(51) 2020 of the Secretary, Uttarakhand Government the word 'Anudaan' at Para 16 and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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