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TMI Blog2023 (6) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... sis and cannot be generalized. The exemption is available only in relation to services provided by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India or not. The applicant had submitted only few work orders for verification and hence it is not feasible to pass an ruling on a generalised basis and hence it is being held at a principle level that any services provided in relation to any function entrusted to a panchayat under article 243G of Constitution of India or in relation to any function entrusted to a municipality under Article 243W of Constitution of India and the applicant be guided accordingly. Value of the supply of services rendered by AOCOS as per section 15 of GST Act - HELD THAT:- The applicant had put forth the point of argument that the value of the service rendered by them is only limited to collection of 'welfare fund' and also contented that the employees are not recruited by the applicant directly and they are concerned only with the payroll management . They have provided the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tsourcing manpower placement for all Government departments / organizations. iii 50% reservation for SC's / ST's / BC's Minorities and 50% reservation for women. iv Timely and full payment of salaries into the bank account of outsourced manpower without leakages. v. Assured statutory benefits like EPF ESI etc. The following are the key objectives of the corporation. i. To engage required skilled, semi-skilled and unskilled manpower through systematic and transparent processes. ii. To place the engaged manpower to the needy departments / organizations, as per their requirements. iii To ensure that full benefits are extended to the engaged outsourced manpower as per the rules and norms applicable and ensure that their statutory benefits such as Employee Provident Fund (EPF) and Employee State Insurance (ESI) are complied with. iv. To act as a One-Stop-Shop for all the outsourcing requirements of the Govt of AP departments/organizations/Institutions. The shareholding of APCOS shall be 100% with Government Of Andhra Pradesh in line with the vision and objectives of the outsourcing. The APCOS to be a non-profitable organization w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are as under. 1) APCOS is not an agency that recruits manpower for the government entities. The recruitments of manpower arc being made by the respective governmental departments, corporations etc. APCOS is not involved in any of the process of calling for the interviews, conducting interviews, shortlisting the eligible candidates etc., 2) APCOS is not entering into any employment agreement with any of the employees. In fact, there is an explicit term in the letter intimating employment to the employees, that there is no employer and employee relationship between APCOS and the recruitee. 3) APCOS is not concerned with the attendance or the actual conduct of the recruitee's on their job. The recruits are not subservient to the instruction of APCOS and APCOS is not involved in the day-to-day operations of any of the recruitee. 4) APCOS do not undertake to ensure that a certain number of employees are provided to the respective government departments, corporation and in case of absence or termination of any of the employees to replenish the same and to ensure that the work force is made available. 5) APCOS do not run the payroll - nor does receive and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods and Services Tax Act, 2017 (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 intra-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:- S.No Chapter, Section Heading, Group or Service Code (Tariff) Description of Services Rate (percent.) Condition 1 *** *** *** *** 2 *** *** *** *** 3 Chapter 99 Pure services (excluding wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment Entity means an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90 per cent, or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority. . 5. The applicant further states that, vide Notification No. 16/2021 - Central Tax (Rate) dated 18-11-2021, GOI has made amended the rate notification 12/2017 (Central Rate) and the same can be read as: In exercise of the powers conferred by sub-sections (3) and (4) of section 9, subsection (1) of section 11, sub-section (5) of section 15 and section 148 of the Central Goods and Services Tax Act, 2017 (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 makes the following amendments further to amend the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2017- Central Tax (Rate), dated the 28th June, 2017, published in the Gazette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered the submissions made by the applicant in their application for advance ruling. We have considered the issues involved from which advance ruling is sought by the applicant and the relevant facts along with arguments made by the applicant and also their submissions made during the time of the personal hearing. Now we examine the issue, whether the services of manpower supply services to various Government authorities and Government entities provided by the applicant, ie., APCOS is eligible for exemption from GST, as per Notification Number 12/2017-Central Tax (Rate) New Delhi, dated 28th June, 2017 as amended vide notification 16/2021-Central tax (rate) dated 18-11-2021 being pure services, as per the definition and the services rendered thereby being listed in article 243G and 243W of Constitution as functions pertaining to panchayat and municipality. Now, we invite attention to the relevant portion of the aforementioned notification, which is extracted here as under: Notification No. 12/2017- Central Tax (Rate) dated 28-06-2017 as amended In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any supply which is either deemed as services under Schedule II of CGST Act or which are not covered under the definition of goods shall be categorized as pure services. In the instant case, the applicant is mainly involved in the supply of manpower services to various government departments as stated above, which can be categorized as pure services, thus satisfying the first condition. The second condition to be verified is whether the entities mentioned at para 5.1 above are Central Government or State Government or Local authority. In this regard, definitions of the same as per the CGST Act, 2017 are as under: (i) As per Section-2(53) of the CGST, Act, 2017, Government means the Central Government. (ii) As per Section-2(53) of the CGST, 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 clause (e) of article 243P of the Constitution; (c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The value of supply shall include,- (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both; (c) incidental expenses, including commission and packing, charged by the supplier to the recipient of a supply and any amount charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or before delivery of goods or supply of services; (d) interest or late fee or penalty for delayed payment of any consideration for any supply; and (e) subsidies directly linked to the price excluding subsidies provided by the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the employees are not recruited by the applicant directly and they are concerned only with the payroll management . They have provided the way for the processing of bills and the way the monies are transferred directly into the employees account directly from the state CFMS account. However, the following documentary evidences viz., the GO issued by government stating the objectives for which the applicant is formed by APCOS, the periodical invoices being raised by APCOS on various departments, the placement intimation letters being issued by the applicant stating that they are placing the staff in the concerned department are neither consistent with the contentions of the applicant nor conclusive and hence the contentions cannot be considered tenable. The applicant has filed invoice issued to the service recipients with the following details: (i) remuneration (ii) EPF (iii) ESI (iv) welfare fund As per section 15 of the GST act, the total value of the supply includes all the above and 18% GST is leviable on the entire amount (total of remuneration +EPE +ESI + welfare fund) and not just welfare fund as contended by the applicant. In view of the for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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