9911796707
TMI Blog2024 (8) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... le 243G 243W of the Constitution. Whether supply of selling space for advertisement in print media is pure service as referred in the said Entry No 3 of the Exemption Notification? - HELD THAT:- In supply of space for advertisement in print media, only the rights to publish advertisement are available to the recipient in specified publication, in which such advertisement is published. For printing of newspaper or printed material, Ink and papers are used and the property in such ink and papers get transferred in form of newspaper or print media, to customers who purchase or receive such of newspaper or print media. No property in goods in form of newspaper or print media, is transferred to the recipient of service of supply of selling space in print media. The recipient of such supply get only space in the newspaper, where content of its advertisement is printed. Therefore, it is decided that the supply of selling space in print media is supply of pure service as envisaged in Entry No. 3 of the Exemption Notification. Whether supply of selling space for advertisement in print media is composite supply of goods and services in which the value of supply of goods constitute not more t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ataka vs Azad Coach Builders Pvt. Ltd. Anr [ 2010 (9) TMI 879 - SUPREME COURT] held that ' The expression in relation to1 are words of comprehensiveness, which might both have a direct significance as well as an indirect significance, depending on the context in which it is used and they are not words of restrictive content and ought not be so construed.' Context of word in exemption notification-Entry at Sr No 3 - HELD THAT:- The exemption under the entries at Serial No. 12(e) and 25(a) of notification 25/2012-Service Tax dated 20-6-2012, will cover a wide range of activities/services provided to a government, a local authority or governmental authority and will include the activity of construction of tube wells. As the content of advertisement is in relation to the function of Education, including primary and secondary schools and Health and sanitation, including hospital, Primary health centres and dispensaries; it is decided that being pure services provided to the Municipal Corporations are covered by Entry No. 3 of the Notification 12/2017-Central Tax (Rate) Dated 28th June 2017, and exempted from tax. - SHRI. AJAYKUMAR V. BONDE AND MS. PRIYA JADHAV, MEMBER PROCEEDI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in print media GST rate applicable is 5% for the same. Whereas all its customers are releasing payment with GST except Pune Municipal Corporation and Pimpri Chinchwad Municipal Corporation . 1.5 PMC and PCMC on the other hand are of the view that GST will not be applicable on the advertisement services provided to the Municipal Corporation, under the reference of Pure Services provided to the Local Authority. As per the Notification No.l2/2017-Central Tax (Rate), Under Chapter 99, Pure Services . PMC/PCMC are local authorities. Copy of letter from PCMC is submitted with the application. 2. STATEMENT CONTAINING APPLICANTS INTERPRETATION OF LAW 2.1 Notification No. 12/2017-Central tax (Rate) dated June 28, 2012 Sr. No. 3 of the said notification, Pure Services (excluding works contract service or other composite supplies involving the supply of any goods) provided to the Central Government, State Government, Union territory, local authority, or a governmental, authority by way of any activity related to any function entrusted to a Panchayat under Article 243G of the Constitution or to a Municipality under Article 243W of the Constitution are exempt from GST. 2. 2 Sr. No.3A insert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the function entrusted to Municipality under article 243W. f. The definition of Relation as per the Cambridge Dictionary is the connection or similarity between two things. In our case there is no connection in relation to service provided and the functions entrusted under the said article. g. Similar view was taken in Hrmilap Media Pvt. Ltd. (Advance Ruling No. 03/2019-20 Uttarakhand). (Copy of the Ruling is annexed herewith and referred as Annexure III) h. Furthermore, as per entry no. 3A mentioned above, if the composite supply of goods and services involves the value of goods constituting not more than 25% of the total value, it qualifies for exemption. In our case, if the supply is considered a composite supply, then the value of goods exceeds 25% of the total value and this entry becomes inapplicable. The Applicant has submitted cost of Goods and service element in its business, which is available on record. It has submitted that the ratio of goods component in supply of services is exceeding the 25% threshold limit. Thus, the composite supply of goods and services in which the value of goods constitutes more than 25% of the value of the said composite supply provided to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5.1.3 Applicant has supplied these services to Pimpri Chinchwad Municipal Corporation ((hereinafter referred to as PCMC). The advertisement dated 13-06-2018 vide Advertisement No 1326/2018, was for recruitment of 'Professors, Associate Professors and Assistant Professors from Specialist Doctors from Medical Profession for its 'Yashwantrao Chavan Smrurti Hospital Establishment. Applicant has issued Invoice vide Invoice No. NA18CBLZ2/ 4330 dated 16-06-2018 for Ner value Rs 211,200/- and CGST SGAT at rate of 2.5% thereon, Gross Value at Rs 221760/- Description of Service is stated as 'Selling of space for advertisement in print media'. 5.1.4 The recipient of advertisement Pimpri Chinchwad Municipal Corporation, has vide its letter dated 12.03.2018 stated that in brief: GST is not applicable on Pure Services of Advertisement'. Reasoning given by its Chartered Accountant of the PCMT is 'any advertisement in relation to work mentioned in Article 243G or Article 243W will be exempt. Advertisement work other than in relation to Article 243W or Article 243G, GST will be applicable at 5%.' 5.2) In backdrop of these facts and relevant provisions of GST Laws and N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvertisement in print media is composite supply of goods and services in which the value of supply of goods constitute not more than 25%, for the purpose of Entry at Sr. No.3Aof the Exemption Notification? 5.3.3 Whether Pune Municipal Corporation and Pimpri Municipal corporation are local authorities for the purpose of entry at Sr no. 3 and 3 A referred above of the notification 12/2017? 5.3.4 Whether the content of advertisement has some connection either direct, indirect, remote etc. to the function entrusted to the panchayat that is to say: 17. Education, including primary and secondary schools. 23. Health and sanitation, including hospital, Primary health centers and dispensaries. (Emphasis supplied) 5.3.5 whether supply of service of selling space for advertisement for recruitment of doctors for the posts of 'Medical Officers' and 'Professors' required for hospital and medical college, having attached Hospital, run by the respective corporation can be said to be in relation to the function entrusted to the Panchayat under Article 243G 243W of the Constitution 5.4) Issue No. 1: - Whether supply of selling space for advertisement in print media is pure service as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of entry at Sr no. 3 and 3 A referred above of the Exemption Notification? 5.6.1 The Applicant admitted stated that both these Corporations are Local Authorities as per definition in S 2 (69) of the GST Act and as referred to Entry No 3 3A of the Exemption Notification. 5.6.2 The Jurisdictional Officer also admitted stated that both these Corporations are Local Authorities as per definition in S 2 (69) of the GST Act and as referred to Entry No 3 3A of the Exemption Notification. 5.6.3 Findings, discussion decision on the issue: Both these Municipal Corporations are Constituted under the Maharashtra Municipal Corporations Act, 1949, a. Definition in S 2 (69) of the GST Act is as under,- (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. b. This issue is decided by Maharashtra Authority for Advance Ruling in M/s. City and Industrial Development Corporation of Maharashtra Limited dated 13.04.2019 in observation para no.4 as under: - we also are of the opinion that the NMMC and PMC are Municipal Corporations which satisfy the definition of a 'Local Authority' as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government will be considered.' 5.7.5 The Applicant agreed that such Recruitment Rules, are framed, but was unequivocal that such Advertisement is not in relation to the functions stated in Article 243G 243W, and the connection if any is very remote. 5.7.6 The Jurisdictional Officer also agreed with the provisions of Recruitment Rules, but was unequivocal that such Advertisement is not in relation to the functions stated in Article 243G 243W, and the connection if any is very remote. 5.7.7 Findings, discussion decision on the issue: From the recruitment Rules framed by PMC and similar Rules framed by PCMC, Publication of Advertisement for Recruitment of Medical Officers etc. is mandatory to be published in the Newspaper or Notice Board of the Corporation. Therefore, we are of the opinion that Activity of placing Advertisement for recruitment of Medical Officers and Professors from Medical Profession is mandatory on the Corporation and the content of advertisement has some connection, whether direct, indirect or remote, to the function entrusted to a panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2024-Officer has submitted as under, On the analysis and study of above facts, it is submitted that- a. Selling of space for advertisement' is taxable at the rate of 2.5 percent CGST and SGST each. b. Selling of space for advertisement is pure services supplied to Municipality. However, this service is not in relation to the functions entrusted to Municipality by Article 243W. c. The exemption as per CGST Notification No. 12/2017-Central Tax (Rate), serial no 3, chapter 99 is applicable only when the activity is pure service supplied 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. d. It was submitted by the Officer, that the advertisement for recruitment of Medical Officers and Professors for Hospital of Medical College are not in relation to the said constitutional functions, and hence not eligible for exemption as per Entry at sr. No 3 of the Exemption Notification. 5.8.3 Findings, discussion decision on the issue: The words any activity in relation to any function used in entry at Sr. no 3 are very broad and shall not be confused wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process or activity is so integrally related to the ultimate manufacture of goods so that without that process or activity manufacture may, even if theoretically possible, be commercially inexpedient, goods intended for use in the process or activity as specified in Rule 13 will qualify for special treatment. This is not to say that every category of goods in connection with manufacture of or in relation to manufacture, or which facilitates the conduct of the business of manufacture will be included within Rule 13. Attention in this connection may be invited to a judgment of this Court in which it was held that vehicles used by a Company (which mined ore and turned out copper in carrying on activities as a miner and as a manufacturer) fell within Rule 13, even if the vehicles were used merely for removing ore from the mine to the factory, and finished goods from the factory to the place of storage. Spare parts and accessories required for the effective operation of those vehicles were also held to fall within. Rule 13. See Indian Copper Corporation Ltd v. Commissioner of Commercial Taxes, Bihar and Ors (Emphasis supplied) Para 10- . The High Court has rightly pointed out that unle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpression hn relation to1 are words of comprehensiveness, which might both have a direct significance as well as an indirect significance, depending on the context in which it is used and they are not words of restrictive content and ought not be so construed. (Emphasis supplied) d. Now coming to next principle of finding out context of word in exemption notification-Entry at Sr No 3 is as under, Sr No. 3- Pure services (excluding works contract services 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 or a Government Entity 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 constitution. All these services are provided to the Government and Local Authorities, that too required for their Constitutional duties as stated in Article 243G 243W. GST being indirect tax, burden of such tax falls on recipient of supply-here The Local Authorities. The burden will be paid through the grants received from the Central and S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o hold that the activity of publishing advertisement for recruitment of Doctors for various posts by the Corporations is in relation to its constitutional function stated in Article 243G and 243W. 6. Final Decision - Considering all the judgments, Circular etc. above and after having observed that it is mandatory to issue advertisement for recruitment, and therefore publication of such advertisement is ultimately mandatory for recruitment of doctors for constitutional functions, who in turn are necessary for providing health services. Government has used words any activity in the notification, also means that the activity of Selling of space for advertisement in print media' is also covered in the entry. The Activity of placing Advertisement in Print Media for recruitment of Doctors for post of Medical Officers and Professors for Hospital and Medical College, is mandatory as per Recruitment Rules of the Corporations and hence though it is not directly related to the constitutional function, it is held to be in relation to an activity in relation to the function stated in Article 243G and 243W, as the words used in the entry are in relation to not directly in relation to . In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
