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TMI Blog2022 (8) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of these then only the Entry No.3(iii) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 will be applicable to the applicant - Since the BWSSB is a Board set up by The Bangalore Water Supply and Sewerage Act, 1964, the same cannot be considered as State Government. As per Clause (e) of Article 243 and Article 243Q of Indian Constitution, we can say that Municipality is an institution of self-government at transitional area, smaller and larger urban areas - From the definitions of Panchayat and Municipalities we can see that both are institutions of self-government in defined areas. Self-Government is the management of local affairs by local Authorities, members of which have been elected by the local people. One of the distinctive attributes and characteristics of Local Authority is that, their members are elected through direct elections by the inhabitants of the defined area. But as per the section 3 of BWSSB Act 1964, all the members of BWSSB are appointed by the State Government - BWSSB is also not a Municipal Committee or a Zilla Parishad or a District Board, since it is not vested with the control or management of a municipal or local fund. In view of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2017 read with Rule 104 of KGST Rules, 2017, in FORM GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act. 2. The Applicant is a Public Limited Company registered under the Indian Companies Act and also under the provisions of Central Goods and Services Tax Act, 2017 as well as Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST/SGST Act respectively). The Applicant undertakes contract for construction of Head Works, Sumps, Pump Rooms, laying, jointing of pipe line and commissioning and maintenance of the entire work for water supply projects/ sewerage projects / 3. The applicant has sought advance ruling in respect of the following questions: i. Whether the supply of Services by the Applicant to M/s. Bangalore Water Supply and Sewerage Board is covered by Notification No.15/2021-Central Tax (Rate), dated 18th November, 2021 r/w Notification No.22/2021-Central Tax (Rate), dated 31st December 2021? ii. If the supplies as per Question 1 are covered by Notification No.15/ 2021-Central Tax (Rate), dated 18th November, 2021 r/w Notification No.22/ 2021-Central Tax (Rate), dated 31st December, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year 1964, BWSSB has executed several water supply and sewage schemes for the city, including the prestigious Cauvery Water Supply Scheme (CWSS) Stages-I,II,III 84 Stage IV Phase-I, Phase-II and sewerage system improvement projects concentrating on sewage collection, conveyance and treatment works. The existing sewerage system covers an area of 265 Sq. kms. of core area of the city, in which three major Sewage Treatment Plants (STP) are constructed at Vrishabhavathi, K C and Hebbal Valleys (major and minor). The sewerage system for newly added areas mainly the erstwhile CMC's is nearing completion. 5.6 The applicant states that Notification No.15/2021-Central Tax (Rate) seeks to amend parent Notification No.11/2017-Central Tax (Rate) dated 28th June, 2017. This Notification prescribed rate of tax on construction services at Serial No.3 of the table therein, viz- (ii) composite supply of works contract as defined in clause 119 of section 2 of Central Goods and Services Tax Act, 2017 at 9% under CGST Act; thereby implying total GST at 18% (CGST-9% + SGST-9%); Notification 11/2017-Central Tax (Rate) dated 28th June, 2017 was subsequently amended vide Notification No.20/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try, protection of the environment and promotion of ecological aspects. (i) Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. (j) Slum improvement and upgradation. (k) Urban poverty alleviation. (l) Provision of urban amenities and facilities such as parks, gardens, playgrounds. (m) Promotion of cultural, educational and aesthetic aspects. (n) Burials and burial grounds; cremations, cremation grounds; and electric crematoriums. (o) Cattle pounds; prevention of cruelty to animals. (p) Vital statistics including registration of births and deaths. (q) Public amenities including street lighting, parking lots, bus stops and public conveniences. (r) Regulation of slaughter houses and tanneries. Notification No.15/2021-Central Tax (Rate) dated 18th November, 2021, r/w Notification No.22/2021-Central Tax (Rate), dated 31st December, 2021 issued seeks to amend at Sr.No.3(iii) as Union territory or a local authority thereby deleting the words a Governmental Authority or a Government Entity. 5.7 The applicant further submits that M/s. BWSSB is holder of PAN-AAALB0015G. The 4th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he may deem fit, by public notification, specify to be an industrial township. 6. Applicant's Interpretation of Law: 6.1 The applicant states that the contractee of the applicant (BWSSB) in question are holding GST TDS Registration No 29BLRA06245B1DJ issued by the GST Department classifies the Contractee under Local Authority. 6.2 The applicant submits that as the Contractee of the applicant are classified as Local Authority as per the GST Authorities, they are of the opinion that - a. the said transaction is covered by Notification No.15/2021-Central Tax (Rate) dated 18th November, 2021 r/w. Notification No.22/2021-Central Tax (Rate), dated 31st December, 2021; which after amendment now reads as (iii) composite supply of works contract as defined in clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017, supplied to Central Government, State Government, Union Territory or a local authority ; b. the said transaction is liable to tax under the GST Act @ 12%; and c. Not applicable PERSONAL HEARING / PROCEEDINGS HELD ON 07-07-2022 7. Shri Manish Goel, Chartered Accountant and Duly Authorised Representative appeared for perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alteration of,- (a) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958); (b) canal, dam or other irrigation works; (c) pipeline, conduit or plant for (i) water supply (ii)water treatment, or (iii) sewerage treatment or disposal. 6 Since the Applicant has been awarded a contract work of Rehabilitation/Remodeling/Replacement of sewer line, the same may be covered under entry 3 (iii)(c) mentioned supra. Before deciding on the same we need to find out whether BWSSB is a State Government or local authority or Governmental Authority or Government Entity. If the Applicant is any one of these then only the Entry No.3(iii) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 will be applicable to the applicant. 13. Since the BWSSB is a Board set up by The Bangalore Water Supply and Sewerage Act, 1964, the same cannot be considered as State Government. Now let us discuss whether BWSSB is a Local Authority or not. Subsection 69 of section 2 of CGST Act s Loca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural area to an urban area; (b) a Municipal Council for a smaller urban area; and (c) a Municipal Corporation for a larger urban area, in accordance with the provisions of this Part: Provided that a Municipality under this clause may not be constituted in such urban area or part thereof as the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township As per Clause (e) of Article 243 and Article 243Q of Indian Constitution, we can say that Municipality is an institution of self-government at transitional area, smaller and larger urban areas. 13.3 From the definitions of Panchayat and Municipalities we can see that both are institutions of self-government in defined areas. Self-Government is the management of local affairs by local Authorities, members of which have been elected by the local people. One of the distinctive attributes and characteristics of Local Authority is that, their members are elected through direct elections by the inhabitants of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he BWSSB are covered under the entry 3 (iii)(c)(iii) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 as discussed in para. 12 supra and hence the same is exigible to GST at 12% till 31.12.2021. 16. Notification No.22/2021-Central Tax (Rate), dated 31.12.2021 was issued in supersession of Notification No.15/2021-Central Tax (Rate), dated 18.11.2021 which brought amendment to No.11/2017-Central Tax (Rate) dated 28.06,2017 as below: In the said notification, in the TABLE, against serial number 3,- 1) in column (3), in the heading Description of Service , in items (iii),(vi),(ix) and (x), for the words Union territory, a local authority, a Governmental Authority or a Government Entity the words Union territory or a local Authority shall be substituted; 2) in column (3), in the heading Description of Service , in item (vii), for the words Union territory, local authority, a Governmental Authority or a Government Entity the words Union territory or a local authority shall be substituted; 3) in column (5), in the heading Condition , the entries against items (iii),(vi),(vii),(ix) and (x), shall be omitted. In view of the above notification ..... 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