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TMI Blog2023 (2) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... consists of supply of goods. The Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President. Similarly, as per clause (60) of section 3 of the General Clauses Act, 1897, the State Government', as respects anything done after the commencement of the Constitution, shall be in a State the Governor, and in an Union Territory the Central Government. As per Article 154 of the Constitution, the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or indirectly through officer's subordinate to him in accordance with the Constitution. Further, as per article 166 of the Constitution, all executive actions of the Government of State shall be expressed to be taken in the name of Governor. Therefore, State Government means the Governor or the officers subordinate to him who exercise the executive powers of the State vested in the Governor and in the name of the Governor. By no stretch of imagination Chhattisgarh Housing Board (CGHB) could be termed as Government or local authority. Chhattisgarh Housing Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution. Thus, it can be concluded that the provision of services by the applicant to CGHB in relation to maintenance of various colonies of CGHB / provision of security guards etc. do not qualify for be benefit of Nil rate of GST as provided under Sr. no. 3/ (3A) to Notification No. 12/2017- Central Tax (Rate) New Delhi, dated 28th June, 2017 as amended. - STC/ AAR/09/2022 - - - Dated:- 9-12-2022 - SMT. SONAL K. MISHRA AND SHRI ABHINAV AGRAWAL, MEMBER Subject:- Chhattisgarh GST Act, 2017 - Advance Ruling U/s 98 Chhattisgarh GST Act, 2017 -Advance Ruling U/s 98 application from M/s Call Me Services, C-l 01 /5, First floor, Tagore Nagar, Raipur-492001, Chhattisgarh holding GSTIN-22ADEPB9688C1ZQ (here in after referred to as the applicant), as to Whether the services provided by them in relation to maintenance of various colonies developed by Chhattisgarh Housing Board (herein referred to as CGHB) and not handed over to the local authority by CGHB are exempt under SI. No. 3 of the Exemption Notification GST Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 as amended from time to time. Read :- Application dated 03.09.2022 (Challan details furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Housing Board vide notification no. 177/3236/32/2003 dated 12/12/2004. Chhattisgarh Housing Board is the main arm of the Government of Chhattisgarh for giving effect to its housing schemes and for implementing the Government's schemes under social housing. 3.2 That, since CGHB is a board constituted in terms of Chhattisgarh Housing Board Act which carries out functions entrusted by the State Government, the same would qualify as per the definition of Local Authority . 3.3 Further that, CGHB is also engaged in performing various functions required to be performed by Municipality under article 243W of the Constitution like slum improvement, up gradation and also facilities like solid waste management, water supply for domestic purpose etc. till the time the developed areas are officially handed over to the local authority for maintenance. 3.4 That, Since CGHB carries out the functions required to be performed by the municipality till the time the developed areas are officially handed over to the local authority for maintenance, therefore CGHB is acting as a municipality. Hence CGHB should also be considered as a municipality i.e local authority. 3.5 That, so the pure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CGGST Act, 2017. Now we sequentially proceed to discuss the issues involved in the ruling so sought by the applicant and the law as applicable in the present case. 6. Section 96 of CGST Act, 2017, Authority for advance ruling, stipulates as under: - Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory. Section 97(2) of CGST Act, 2017 stipulates that:- The question, on which the advance ruling is sought under this Act, shall be in respect of,- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of fax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to Panchayat or Municipality as per Constitution. It was thus opined that the taxpayer will have to discharge / pay tax at the applicable rate as per prevalent law. 8. The issues covered in the instant case in hand is regarding the applicability of exemption from GST on the services provided by the applicant, as stipulated under SI. No. 3 of exemption Notification no. 12/2017-Central Tax (Rate) dated 28.6.2017 as amended. We observe that the ruling sought by the applicant is whether the services provided by them in relation to maintenance of various colonies developed by Chhattisgarh Housing Board (CGHB)and not handed over to the local authority by CGHB are exempt under SI. No. 3 of the Exemption Notification GST Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017 as amended from time to time. The applicant in their application have submitted that they have been awarded a contract by Chhattisgarh Housing Board (CGHB) for providing services in relation to maintenance of various colonies developed by Chhattisgarh Housing Board at Atal Nagar, Naya Raipur and not handed over to the local authority for its maintenance. The applicant is of the opinion that pure service c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority 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 3A Chapter 99 Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply provided to the Central Government State Government or Union territory or local authority 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 ............ ............ ............ 9. Thus, from the above it gets abundantly clear that the services mentioned at Sr. no, 3 are eligible for the said benefit of Nil tax rate, provided all the stipulations mentioned therein under column (3) v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been included. Thus, from 25.1.2018 composite supply of goods and services has also been included for the said benefit of Nil tax rate with the stipulation that the value of supply of goods constitutes not more than 25 per cent of the total value of the composite supply has been provided with principal supply of services. However, from the application it is unclear as to how much percentage of the value of composite services provided by the application consists of supply of goods. 9.2 Now coming to the second criterion, we find that the said supply of services should be provided to the Central Government, State Government or Union territory or local authority. It would not be out to place to mention here that services provided to Governmental authority, or a Government Entity stands excluded/omitted from Sr. no. 3 (and 3A) of the said Notification no. 12/2017-Central Tax (Rate) dated 28 June 2017 with effect from 1st of January 2022 vide Notification no. 16/2021-Central Tax (Rate) dated 18.11.2021. 9.2.1 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 Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esident and shall be exercised by him either directly or indirectly through officer's subordinate to him in accordance with the Constitution. Further, in terms of Article 77 of the Constitution, all executive actions of the Government of India shall be expressed to be taken in the name of the President. Therefore, the Central Government means the President and the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of the President. Similarly, as per clause (60) of section 3 of the General Clauses Act, 1897, the State Government', as respects anything done after the commencement of the Constitution, shall be in a State the Governor, and in an Union Territory the Central Government. As per Article 154 of the Constitution, the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or indirectly through officer's subordinate to him in accordance with the Constitution. Further, as per article 166 of the Constitution, all executive actions of the Government of State shall be expressed to be taken in the name of Governor. Therefore, State Government means th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Answer : A statutory body, corporation or an authority created by the Parliament or a State Legislature is neither 'Government' nor a 'local authority'. Such statutory bodies, corporations or authorities are normally created by the Parliament or a State Legislature in exercise of the powers conferred under article 53(3)(b) and article 154(2)(b) of the Constitution respectively. It is a settled position of law (Agarwal Vs. Hindustan Steel AIR 1970 Supreme Court 1150) that the manpower of such statutory authorities or bodies do not become officers subordinate to the President under article 53(1) of the Constitution and similarly to the Governor under article 154(1). Such a statutory body, corporation or an authority as a juridical entity is separate from State and cannot be regarded as the Central or a State Government and also do not fall in the definition of 'local authority'. Thus, regulatory bodies and other autonomous entities would not be regarded as the government or local authorities for the purposes of the GST Acts. Question 9: Are various corporations formed under the Central Acts or State Acts or various government companies regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 18. Technical training and vocational education. 19. Adult and non-formal education. 20. Libraries. 21. Cultural activities. 22. Markets and fairs. 23. Health and sanitation, including hospitals, primary health centres and dispensaries. 24. Family welfare. 25. Women and child development. 26. Social welfare, including welfare of the handicapped and mentally retarded. 27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes. 28. Public distribution system. 29. Maintenance of community assets. The functions entrusted to the municipalities under 243W of the Constitution of India are reproduced hereunder:- 1. Urban planning including town planning. 2. Regulation of land-use and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic, industrial and commercial purposes. 6. Public health, sanitation conservancy and solid waste management. 7. Fire services. 8. Urban forestry, protection of the environment and promotion of ecological aspects. 9. Safeguarding the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is evident 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 and thirdly it should be an activity in relation to functions entrusted to a Panchayat under article 243G of the Constitution or in relation to functions entrusted to a Municipality under article 243W of the Constitution. From the above discussions the applicant is not satisfying any of the three mandatory conditions specified in the said notification. Thus, from the above analysis, with regard to the question raised by the applicant, it can be concluded that the provision of services by the applicant to CGHB in relation to maintenance of various colonies of CGHB / provision of security guards etc. do not qualify for be benefit of Nil rate of GST as provided under Sr. no. 3/ (3A) to Notification No. 12/2017- Central Tax (Rate) New Delhi, dated 28th June, 2017 as amended. 10. Having regard to the facts and circumstances of the case and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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