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TMI Blog2023 (3) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 243 G of the Constitution or in relation to any function entrusted to a Municipality under Article 243 W of the Constitution - From this, it can be construed that for any supply to be covered under the Pure Services if there is no supply of goods and the recipient should be Central government/State government/Union territory/ Local Authority and services 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 243 W of the Constitution. The main function of water distribution services is of MCG and the same can be considered as pure services. But the services received by MCG from the applicant are not in the nature of Pure Services and not the support services as these are support services and not in relation to any function which is entrusted to the MCG. The goods (tangible and Intangible) and services provided by the applicant cannot be regarded as an integral part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s undertaken in form ARA-01 that the issue is neither pending nor decided in any proceedings under any of the provisions of the Act. Besides the applicable fees in the case has also been deposited. So, he is eligible to seek an Advance Ruling under the above provisions and the case is being heard on merits. Statement of facts as per ARA-01 The applicant is a registered taxpayer under CGST Act, 2017 with GSTIN no. 06AACCB4891M1ZB. They are providing maintenance of Data base, spot billing, meter reading and bill distribution services to the Municipal Corporation, Gurugram for water supply and sewarge connections. A person is deputed area wise and provide an android device like mobile phone and printer. He visits every house in that area and generates the water bill by taking the reading in water meter and will hands over the bill to the consumer. The company provides software to install in the mobile phone to enable the consumers to generate the bills. The scope of work includes all the services of Water Revenue Management System. The details is briefed as following:- Creation and Maintenance of Database. Generate data for Spot billing of Water Supply Sewerage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f MIS reports can be generated to cater the need of top level officers of accounts department of MCG. The list of some of the important MIS reports is as follows:- 1. Revenue assessment and realization during the year for water and Sewerage charges, fixed charge, meter reading, interest on outstanding dues, rebate charges, dues, other charges, outstanding of last month and total outstanding. 2. Revenue collection details category wise having total Consumers, total Billed Consumers, water Sales in units of previous and current year. 3. Outstanding revenue details reports for circles, divisions, sub division office, category wise and slab wise can also be generated. System generated detailed reports includes: Outstanding List/Collection Report/Meter Testing Report/Cash Report/Ledger Extract Details Report/New connection Report/Financial Year wise Report/Reading Report/Defaulter Notice The applicant's interpretation of the provisions with reference to the Activity done by him:- Our service is a pure service and covered in serial no. 3 of the Notification no.12/2017-Central Tax (Rate) and is covered under clause (5) of the Municipal functions as enumerated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control of Municipal Corporation, Gurugram. The function of water supply to the public at large has been entrusted to MCG by the Government of Haryana. In the notification no. 12/2017 dated 28.06.2022 nil rate of tax is applicable on pure services provided to the Local Authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution of India. The functions are listed in the 12th Schedule of the Constitution (Under Article 243 W). In the present matter, MCG has further sought services related to activities of design and development electronic billing and distribution of the bills and collection system for water supply and sewerage bills from the applicant. These services includes spot billing i.e. taking reading, generation and delivery of the bills to the end consumers and AMC of the software to the applicant i.e. M/s BCITS Pvt. Ltd. The manpower is also provided by the applicant for the said activity. The detail of each aspects of the issue at hand has been examined by the authority. The relevant provisions under the CGST Act, 2017 are as under:- Section 2(17) ''business includes,- (a) any tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, and includes non-taxable supply; Section 2(105) supplier in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied; Section-7 Scope of supply.- (1) For the purposes of this Act, the expression supply includes,- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; [and] (c) the activities specified in Schedule I, made or agreed to be made without a consideration; (2) Notwithstanding anything contained in sub-section (1),- (a) Activities or transactions specified in Schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial purposes. This function of water supply has been entrusted to a Municipality under Article 243W of the Constitution of India and these services provided by the applicant to the MCG are not in relation to the water distribution system per se. Water supply system necessarily requires procurement, transmission and supply of water to the consumers and meter installation but these functions are being done by the MCG. Whereas the applicant has provided the software services along with manpower to the MCG for the support of water distribution services. It enhances the effectiveness of the services provided by the MCG to the consumers (public at large). The main function of water distribution services is of MCG and the same can be considered as pure services. But the services received by MCG from the applicant are not in the nature of Pure Services and not the support services as these are support services and not in relation to any function which is entrusted to the MCG. The goods (tangible and Intangible) and services provided by the applicant cannot be regarded as an integral part of the water distribution system itself. These are add on activities. The definition of the Scop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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