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TMI Blog2023 (6) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... or PMAY-U would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India? (2) If answer to first question is in affirmative then, whether such services provided by the applicant would qualify as Pure services (excluding works contract service or composite supplies involving supply of any goods) 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 as provided in serial number 3 of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017, as amended and corresponding Notifications No. KA.N.I.-2-843/X1- 9 (47) / 17-UP. Act-1 - 2017 - order- (10)-2017 Lucknow, dated June 30, 2017, as amended, issued under Uttar Pradesh Goods and service Tax Act, 2017 ('UPGST Act), where the Project cost includes cost of service rendered along with reimbursement of cost of procurement of goods for rendering such service, and, thus, be eligibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Nodal Agencies (CNAs) and primary Lending Institutions (PLIs) are main stake holders who play in important role in implementation and success of PMAY(U). The mission covers the entire area consisting of Statutory Towns, Notified Planning Areas, Development Authorities, Special Area Development Authorities, Industrial Development Authorities or any such authority under State legislation which is entrusted with the functions of urban planning & Regulations. The scheme has been divided into four verticals as given below: *Slum rehabiliations of slum dwellers with Participation of private developers using land as resource * Promotion of Affordable housing for weaker section through credit linked subsidy * Affordable housing in Partnership with Public and Private sectors * Beneficiary- Led individual house construction 3. M/s RUDRA ABHISHEK ENTERPRISES LIMITED", among others qualified the terms and conditions of above RFP and Shortlisted as an agency for "Preparation of Detailed Project" and providing Project Management Consultancy Service" under Pradhan Mantri Awas Yojna (PMAY) in various districts of U.P. Principal Secretary U.P. Govt, vide Government Order No. 48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no. 33 of Article Of Association, the accounts of SUDA shall be subject to an audit by the Comptroller and Auditor General of India and as per point no. 43, "Members to receive no profit upon dissolution of the society if after disposal and settlement of the property of the society and its claims and liabilities, there are any surplus assets, such assets shall not be paid to or distributed amongst the members of the society or any of them but shall be disposed off as directed by the Government of India or State Government. Memorandum of SUDA is attached herewith. 8. As SUDA has been established as a state level nodal agency, under the department of Urban employment And Poverty Alleviation by Uttar Pradesh Government and as per the information contained in Memorandum Of Association (in para 15.vi above), it is clear that SUDA is a part of State Government of UP. In view of facts stated above, it can be established that SUDA falls under Government category. 9. District Urban Development Agency (DUDA in short), as mentioned above is organizational extension of SUDA in various Districts of Uttar Pradesh. DUDA works on same lines of objectives in a district on which SUDA works i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... data in reference to Slum Free city Plan in the DPR * The DPR should be complete in all respect with all report drawings, statements and documents necessary for obtaining the grant from the Government of India. B. Scope of Work under Project Management Consultancy (PMC)/Supervision Services: * PMC will coordinate, execute and monitor the activities leading to the construction of approved DUS (Dwelling units) by Govt, of India. * All the activities till the completion of DUS will be taken care of by PMC. * PMC shall also administer the works by the beneficiaries and ensure that the agreement between the ULBs and beneficiaries whether related to quality or quantities of work are executed in accordance with its provisions. * PMC shall attach Beneficiaries to the project in PMAY-MIS and also upload Annexure 7A & 7C. * PMC shall execute all MIS related work of PMAY (U). * PMC will supervise the construction work to ensure adherence to the drawings, prescribed high standards of quality and timely completion of the project and verify and certify the progress of the work. * Preparation of Physical and Financial progress and shall submit to respective ULBs and DUDA. * Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling Application, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the CGST Act'. 3. As per Constitution of India the text of Article 243G and 243 W stands as follows- Functions entrusted to Panchayats as laid down under section 243 G of the Constitution of India are:- "Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats at the appropriate level, subject to such conditions as may be specified therein, with respect to- (a) the preparation of plans for economic development and social justice; (b) the implementation of schemes for econom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods for rendering such service and, thus, be eligible for exemption from levy of CGST and UPGST, respectively. 6. The extracts of Notification No. 12/2017-Central Tax (Rate) dated 28 June, 2017, as amended are as follows: Table S.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 1 2 3 4 5 3 Chapter 99 Pure services (excluding works contract service or other composite supplies involving supply of any goods) 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 243 W of the Constitution. NIL NIL 7. Going through the Scope of work under preparation of DPR and scope of work under PMC, this may be clearly observed that such services provided would qualify as "Pure services (excluding works contract service or other composite supplies involving supply of any goods)" provided to the Central Government, State Government or Union territory or local authority by way of any activity in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same two questions as raised here in this application were raised before the Authority for advance ruling "AAR". Answers to both the questions were given in affirmative by the AAR. 11. Thus this has been established that based on the above Notification No. 12/2017, as amended, issued under Central Tax (Rate), GST is exempt in the hands of applicant in case of DPR and PMCs provided to SUDA. 7. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer his comments/views/verification report on the matter. But no reply was received. 8. The applicant was granted a personal hearing in the matter. In compliance, Shri Pankaj Kumar Shukla, Chartered Accountant & Authorized representative, attended personal hearing in person on 12.01.2023 on behalf of the applicant. During the personal hearing, he reiterated the submissions already made in the application of advance ruling. DISCUSSION AND FINDING 9. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per SI. No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2017 "Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental 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 243 W of the Constitution" as amended by notification no. 16/2021-central tax (rate) w.e.f 1.1.2022 are exempt from tax. 13. We observe that SUDA has been established as a state level nodal agency, under the department for Urban Employment and Poverty Alleviation by Uttar Pradesh Government. As per the "Memorandum of Association of State Urban Development Agency", its main objectives shall be- (a) To identify the urban poor in the state. (b) To draw up plans and formulate schemes for the upliftment of the urban poor in the state. (c) To implement schemes for the benefit of the urban poor either directly or through other agencies engaged in this direction, whether private, public or cooperative. (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the state level nodal agency for PMAY(U) in the state of Uttar Pradesh. 17. Now coming to the functions entrusted to Panchayats/Municipalities, the matters listed in the 11th and 12th schedule to the constitution (details 243G and 243W, respectively), are inter alia: (a) Safe water for drinking, (b) Maintenance of community assets, (c) Family welfare, (d) Markets and Fairs, (e) Poverty Alleviation Programmes, (f) Regulation of land use and construction of land buildings, (g) Urban planning including the town planning, (h) Planning for economic and social development, (i) Urban poverty alleviation, (j) Slum improvement and up-gradation etc. Further as per the preface to the PMAY, Housing for All (Urban) Scheme Guidelines:- "The Mission seeks to address the affordable housing requirement in urban areas through following programme verticals: *. Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource * Promotion of Affordable Housing through Credit Linked Subsidy * Affordable Housing in Partnership with Public & Private sectors * Subsidy for Beneficiary-Led individual house construction /enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd verify and certify the progress of the work. * Preparation of Physical and Financial progress and shall submit to respective ULBs and DUDA * Preparation of individual files consist of application, copy of Aadhar card, bank details, land documents, consent letters etc, stage wise photographs for every beneficiaries. * PMC will assist Beneficiaries at various stages such as Plinth Level, Lintel Level, roof level and final finishing works and assist to get timely installments. * PMC will make sure that the project / DUs construction must complete as per the agreement made with the beneficiaries for the successful and timely implementation of the Project. * PMC will implement the Geo tagging of constructions of all the stages. * Time extension will not be considered except in very exceptional cases without prejudice to levy of penalties. However any approval for extension of time of completion of the works stipulated in the construction, beneficiaries will be without any additional financial implication. * PMC shall be fully responsible for quality control and shall put in place such measures as are essential for ensuring regular on site quality checks. * PMC shall s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i.e. Detailed Project Report Service/Beneficiary Document Preparation) and Project Management Consultancy services ('PMCS)/Supervision Services to SUDA as a subcontractor. SUDA Lucknow on 10th July 2017 has entered into three agreements with M/s RUDRABHISHEK ENTERPRISES LIMITED, A 6, SECTOR 58, NOIDA, Uttar Pradesh, 201301 which was formerly known as RUDRABHISHEK ENTERPRISES PRIVATE LIMITED (here in after called the applicant) vide agreement no. 708/01/29/HFA/2016-17 for Cluster No. 7 (Chitrakoot); agreement no. 708/01/29/HFA/2016-17 for Cluster No. 14 (Meerut); and vide agreement no. 708/01/29/HFA/2016-17 for Cluster No. 16 (Moradabad) for "Preparation of Detailed Project Report" and providing "Project Management Consultancy Service" under Pradhan Mantri Awas Yojna Urban(PMAY-U) specifying the terms of reference and scope of work as per model RFP No. 708/01/29/HFA/2016-17 dated 01/02-06-2017 of SUDA referred above. After entering into such agreements, work orders for various local bodies/authorities under the cluster were issued by SUDA one by one after completion of work of a given local body. 23. The applicant has submitted that service provided by sub-contractor regarding DPR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an agreement with "M/s Creative Consortium, and M/s Rudrabhishek Enterprises Limited for "Preparation of Detailed Project Report'' and providing "Project Management Consultancy Service" under Pradhan Mantri Awas Yojna (PMAY in short). The above two parties made an agreement and awarded, back to back, same work to M/S Manpar Icon Technologies, Lucknow, Uttar Pradesh. In the said case, exactly the same two questions as raised in this application were raised before the Authority for advance ruling and answers to both the questions were given in affirmative by the AAR. 24. We observe that Sl. No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2017 exempts "Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental 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 243 W of the Constitution" as amended by notification no. 16/2021-Central Tax (rate) w.e.f. 1.1.2022. As such, for qua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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