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TMI Blog2022 (3) TMI 1479X X X X Extracts X X X X X X X X Extracts X X X X ..... on to any function entrusted to a Municipality under article 243W of the Constitution? - HELD THAT:- To avail the benefit of the aforesaid exemption, three conditions should be satisfied. Firstly, pure services (excluding works contract service or other composite supplies involving any goods) should be provided, secondly, it should be provided to the Central Government, State Government or Union territory or local authority or a Governmental authority and thirdly it should be 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. Supply of man power as discussed above provided by business entities like the applicant, not involving any supply of goods would be treated as supply of pure services also the applicant has submitted that they are providing the same to Central / State Government. It is dear from the documents furnished by the applicant that the provision of services of survey and preparation of Detailed Project Report for water supply systems for Panchayats/ Municipalities by the applicant through Public Health E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction on the payments made with regard to above services. 2. Facts at the case:- 2.1 M/s. Aarav Consultancy Services Pvt. Ltd., having registered office at SR. MG. 490, MPHB COLONY, DD NAGAR, DANGNIYA, SECTOR 1, RAIPUR, Raipur, Chhattisgarh, 492001 and having GST No. 22AANCA6885D1ZK: have been working for preparation of Detailed Project Report of water supply schemes of Gram Panchayats in different District of Chhattisgarh State under Jal Jeevan Mission through PHE Department, Chhattisgarh. 2.2 The applicant has informed that they are engaged by Public Health Engineering Department (PHED), Chhattisgarh for preparation of detailed project report for various Gram Panchayats in the state of Chhattisgarh under Jal Jeevan Mission. The scope of service being as under (i) Carrying out topographical survey Total station survey and review of the data available for survey work and planning of the schemes for water supply schemes under and as per the guidelines of Jal Jeevan Mission and CG PHE (ii) Preparation of detailed designs of all the components of the Retrofitting/SVS and preparation of cost estimates based on CG PHE USOR-2020. Calculation of annual maintenance co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is eligible for GST exemption. 3,2 Since the above-mentioned services come under GST exemption, 2% TDS on GST shall not be applicable, whereas their client (PHED) wants to deduct 2% TDS on GST and accordingly they seek clarification/ruling in the matter. 4. Personal Hearing:- Keeping with the established principles of natural justice, personal hearing in the matter was extended to the applicant in person, as requested by them and accordingly, Shri Loknath Sahu, Director of the Applicant appeared before us for hearing on 13.01.2022 and reiterated their contention. He also furnished a written submission dated 13.01.2022 along with sample copies of work order which has been taken on record. 5. The legal position, analysis and discussion: - At the very outset, we would like to make it clear that the provisions for implementing the CGST Act and the Chhattisgarh GST Act, 2017 [hereinafter referred to as the CGST Act and the CGGST Act ) are similar and thus, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the CGGST Act, 2017. Now we sequentially proceed to discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of section 11 of the Central Goods and Services Tax Act, 2077 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intro-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely:- TABLE Sl.No. Chapter, Section, Heading. Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 1. .. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. We observe that the applicant has sought the ruling as to whether the services provided by them would qualify as Pure services (excluding works contract service or composite supplies involving supply of any goods) as provided in serial number 3 of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017 where the Project cost includes the cost of service rendered along with reimbursement of cost of procurement of goods for rendering such service, and, thus, be eligible for exemption from levy of CGST and CGGST, respectively. 12. To have a better appreciation of the issues involved, definitions of the above terms as provided under the CGST Act, 2017 are reproduced herein below: (i) As per Section-2(53) of the CGST. Act, 2017, Government means the Central Government. (ii) As per Section-2(53) of the CGGST, Act, 2017, Government means the State Government. (iii) local authority means- (a) a Panchayat as defined in clause (d) of article 243 of the Constitution: (b) a Municipality as defined in claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion entrusted to a Municipality under article 243W of the Constitution For better appreciation, the functions entrusted to the panchayats under Article 243G of the. Constitution of India are reproduced herein below: 1. Agriculture, including agricultural extension. 2. Land improvement, implementation of land reforms, land consolidation and soil conservation. 3. Minor irrigation, water management and watershed development. 4. Animal husbandry, dairying and poultry. 5. Fisheries. 6. Social forestry and farm forestry. 7. Minor forest produce. 8. Small scale industries, including food processing industries. 9. Khadi, village and cottage industries. 10. Rural housing. 11. Drinking water. 12. Fuel and fodder. 13. Roads, culverts, bridges, ferries, waterways and other means of communication. 14. Rural electrification, including distribution of electricity. 15. Non-conventional energy sources. 16. Poverty alleviation programme. 17. Education, including primary and secondary schools. 18. Technical training and vocational education. 19. Adult and non-formal education. 20. Libraries. 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Government, State Government or Union territory or local authority or a Governmental authority and thirdly it should be 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. Supply of man power as discussed above provided by business entities like the applicant, not involving any supply of goods would be treated as supply of pure services also the applicant has submitted that they are providing the same to Central / State Government. Now the decisive part is as to whether the said activity is 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. 13. On the basis of the work order furnished by the applicant, it is evident that the service of preparation of detailed project report for various Gram Panchayats in the State of Chhattisgarh under Jal Jeevan Mission have been entrusted upon the applicant through the Public Health Engineering Deportment, Chhattisgarh. The scope of work un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient. Explanation . For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the central tax, State tax, Union territory tax, integrated tax and cess indicated in the invoice. (2) The amount deducted as tax under this section shall be paid to the Government by the deductor within ten days after the end of the month in which such deduction is made, in such manner as may be prescribed. 1 [(3) A certificate of tax deduction at source shall be issued in such form and in such manner as may be prescribed.] 2 (4)[****] (5) The deductee shall claim credit, in his electronic cash ledger, of the tax deducted and reflected in the return of the deductor furnished under sub-section (3) of section 39, in such manner as may be prescribed. (6) If any deductor fails to pay to the Government the amount deducted as tax under sub-section (1), he shall pay interest in accordance with the provisions of sub-section (1) of section 50, in addition to the amount of tax ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS in GST , in the very same Standard Operating Procedure above at Page 30 in answer to Qn. 25, it further re-iterates that No deduction is required in respect of payment against- all services which are exempted as per principal notification No.12/2017 Central Tax (Rate) as amended from time to time Having regard to the facts and circumstances of the case and discussions as above, we pass the following order: - ORDER (Under section 98 of the Chhattisgarh Goods and Services Tax Act; 2017) The ruling so sought by the Applicant is accordingly answered as under: RULING i. The services of survey and preparation of detailed project report (DPR) for water supply schemes for Panchayats/Municipalities under Jal Jeevan Mission through Public Health Engineering department Government of Chhattisgarh provided by the applicant, M/s Aarav Consultancy Services Pvt. Ltd. Raipur are eligible for exemption from GST as provided under Sr. 3 of Notification Number 12/2017-Central Tax (Rate) New Delhi, dated 28lb June,2017 as amended, being pure services as per the definition and the services rendered thereby being listed in article 243G of Constitution as functions pert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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