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TMI Blog2024 (8) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... - Other professional, technical and business services n.e.c., under the head Business and Production Services covered at Sr No. 21 (ii) in the Notification No 11/2017-Central Tax (Rate) dated 28th June 2017 and are taxable at rate of 18% (9% CGST SGST each), wherever exemption is not applicable. Wherever exemption is not applicable. Whether Services provided to MIP for the Constitutional function of State Central Governments. for which these Governments are liable to pay the consideration of contract. and is made through PFMS. supplies are in fact made to the Central State Government? - HELD THAT:- Being creature of GST Law this Authority cannot comment on the submission that setting up MJP is entirely unlawful and contrary to the constitutional prescriptions and procedure, this is not appropriate forum to discuss such issue. However, it is clear that, as per the Constitution it is the function/ duty or responsibility of State/CentraI Government or local Government, and hence setting up MJP which is a body corporate owned by Government is entrusted with the function, is not prohibited but entirely expected, for development, implementation and regulation of such function - Property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2? 2. What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhjkaran ( MJP ) as a part of Jal Jeevan Mission which is a mission of Government of India which is performed invoiced after 01.01.2022 but which is allotted before 01.01.2022? 3. What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran ( MJP ) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced after 01.01.2022)? 4. Who is the service receiver within the meaning of Sec. 2 (93) of CGST/MGST Act in respect of amounts received as grants by MIP which are paid to the applicant on services provided before 01.01.2022? 5. Who is the service receiver within the meaning of Sec. 2 (93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided after 01.01.2022? 6. Whether appointment of MJP as an agency to implement water supply schemes amounts to delegation of sovereign function enumerated in Sch. XI XII within the framework of Constitution of India so as to hold that MJP has performed the function entrusted under Article 243G 243W of the Constitution of India? At the outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nacted the Maharashtra Jeevan Authority Act in 1976 virtue of which all water by supply / drainage /sanitation/storm water schemes are implemented through the said authority. The said authority is wholly controlled by the Govt. receives funds from consolidated funds as pet budget allocations from the respective Government for execution of any new water supply/sanitation scheme. Please see page no 20 of the paper book that shows that the amounts received by the applicant are out of budget allocations. 1.6 By virtue of amendment dated 01.01.2022 referred to in para 4 above, there is a perception in trade that the activity of the applicant is no longer exempted but is chargeable to full rate of tax i.e., 18%. However, there is no uniformity in understanding the exact legal position of tax exigibility on the applicant s activity, for some of the Zilla Parishad s, some State Governments add GST payable @ 18% to the invoice payable in respect of pure service activity performed, by tax persons identically situated, to that performed, by the applicant. Therefore, this present application is preferred in order to officially clarify the rate of tax applicable to the activity performed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Government under a legislation or government order are provided to a Government Authority within the meaning of Notification 25/2012. b. Karad nagar parishad versus commissioner of C. Ex. ST, Kolhapur (20 GSTL 288) Wherein it was held that regulatory fees charged by the Municipal Corporation come within the ambit of sovereign functions within the meaning of Article 243W and hence not exigible to service tax. c. Ganpati mega builders (I) Pvt. Ltd. (58 GSTL 324) Herein it was held that construction services falling within the purview of Article 243G W provided to JNNURM, Mandi Samiti Mandi Parishad other municipal bodies are not subject to service tax. d. Cuddalore Municipality (55 GSTL 397) Wherein it was reiterated that services provided to Municipalities with respect to functions specified in article 243 G W are not chargeable to service tax. 2.12. The applicant provides technical management consultancy services to the MJP, these services are related to water supply, irrigation sewage management. The aforesaid services have been entrusted to the State Governments, panchayats municipalities under article 243G W of the constitution given. the fact that they are sovereign in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Central/State Government as a part of Jal Jeevan Mission: a. Operational Guidelines issued by Government of India Ministry of Jal Shakti in December 2019. Specific attention is drawn to Financial Planning Funding at Sr no 7 page no 44 to 53 of the document. b. Funds Allocation order no 682 dated 28-04-23 issued by State Water Sanitation Mission Director allocating the funds to various districts for Project Management Consultancy under which the work of the applicant falls. c. Government of Maharashtra Resolution of Water Supply Sanitation Department dated 17-06-2021 appointing Under Secretary as the Drawing Disbursing Officer Deputy Secretary as the controlling officer. 2.1.3 Thus, even in case of services rendered post 01.01.2022, the applicant submits that the services rendered, though apparently rendered to MJP, become services rendered to State Government/Central Government because the MJP in the instant case is working as an agent of the Government in execution of a constitutional duty/function. Therefore, the Applicant submits that even after the deletion of the words Government Authority Government Entity from notification no. 12 of 2017 w.e.f. 01.01.2022, the services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Governments must be construed as payment by an agent on behalf of the respective principal. The principle of common law that payment by agent amounts to payment by principal applies with full force in the facts circumstances of the presently impugned transaction therefore the respective Government s become the service recipient under Section 2 (93) of GST Act. 2.4. As specified before now, water supply, irrigation, canaling, drainage and other related functions are responsibilities of the Centre State Governments, as per Entry 56 of List Entry 17 of List Il, respectively, of the Indian Constitution. The applicant submits that where the makers of the constitution have assigned a certain responsibility upon the government. The government cannot, by enacting a legislation or otherwise, further delegate the same to any other authority even when such activity is delegated it remains to be the responsibility of the respective Government as per the scheme of the Constitution. The aforesaid law was laid down by the Hon ble Supreme Court in K.C. Ganapathi Narayan Dev Vs State of Orissa. The Honourable Supreme as held that a legislature having restrictive power cannot seek to do something ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same. 2.6 Additional Submission dated 26.06.2024 Kindly find below common additional argument points on facts law in respect of all the four applicants: - 2.6.1. Water is a State Subject. Entry 17 of List II VII Schedule lays down Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power subject to the provisions of entry 56 of List I. List I entry 56 deals with interstate rivers. As regards supply of water, the Water policy has defined major projects minor projects. The former are those that have an irrigation potential of more than 2000 hectares whereas less than 2000 hectares are minor projects. Schedule XI entry 3 mentions Minor irrigation, water management and watershed development. As within the realm of panchayats. Thus, the major projects are within the realm of State Governments. 2.6.2. It is in discharge of this Constitutional function that the MJP Act 1976 was enacted. The duties were formerly discharged by MWSSB i.e. Maharashtra Water Supply Sewage Board. Thus, the major projects are implemented in Maharashtra through MJP the minor projects are implemented by the Panchayats mostly through MJP. 2.6.3. The not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration where consideration is payable for the supply. In the present case where the payment is authorized through the Central/ State Budget, by virtue of the respective finance Act, the concerned Government is legally liable to pay the sum earmarked appropriated to a given expenditure head therefore they become the person liable to pay consequently the service receiver is the Central/ State Government. The applicants herein say submit that their bills are cleared only when the amounts are received from budgetary support. Kindly note that all the arguments are restricted limited to schemes implemented through Jal Jeevan Mission which is a Central mission scheme. 2.6.6. The payments received by the applicants is through Public Finance Management System (PFMS). PFMS is a web based financial application developed Implemented by Controller of Accounts. Department of Expenditure. Government of India. The payment at no point of time is under control of MJP. It is only the regulation part which has been delegated to MJP. i.e. role in respect of supervision of implementation of water projects. The operational guidelines in respect of JJM clearly point out that the Central/ State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponsibility of Central/ State Government in making the payments thus making them the person liable to pay within the meaning of Section 2 (93). 2.6.12. While interpreting the clause of payment, if one was to consider, the event of non- payment on the part of receiver, such scenario would lead to infringement of finance bill apart from the breach of contract. In such case the statutory liability to pay incur the expenditure as per finance bill takes precedence over the contractual liability as per clause 5.5. of the empanelment agreement, while interpreting Section 2 (93), i.e. person liable to pay. 2.6.13. Section 2 (93) specifically includes an agent acting on behalf of principal as recipient, the present facts clearly point out that MIP who is acting as an agent of Central/ State Government thus making the latter recipient of service. 2.7 Further Additional Submission dated 26.06.2024 In continuation of the earlier additional submissions, the applicants respectfully further submit as follows: 2.7.1. During the course of earlier hearing the controversy narrowed down to the limited aspect as to who is liable to make the payment to the applicants within the meaning of Section 2 (93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MJP then who is to be reckoned as the person liable to pay as per Section 2 (93) of GST Act. The applicant submits that the legal liability to pay overrides the contractual liability to pay. The above proposition may be supported by an example. Say the legal liability to pay GST is on supplier u/s 9 (1) in respect of transactions liable to forward charge. Suppose in a given case the above liability is contractually undertaken by the receiver or buyer. Even then the legal liability to pay overrides the contractual obligation undertaken remains with the supplier, Similarly, it is submitted, that in the present case despite the fact that MJP has undertaken the contractual liability to pay, the same is overridden by the Governments Constitutional Legal liability to pay. 2.7.5. Alternatively, in the earlier submission, the applicants had submitted that MJP is acting as an agent of State Government agent as such is included in the definition of service receiver. For the sake of convenience, the relevant portion of Section 2 (93) is reproduced as under .......and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement services for construction projects. The taxpayer is providing services to various Government, Semi-Government, Government Corporation Quasi-Government Institutions. The taxpayer vide subject Government application has informed that they are providing services to Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission and the services provided by them were exempted in GST regime as well as under the existing law (Finance Act, 1994). The taxpayer has sought determination of taxability of said services provided by them before 01-01-2022 and after 01-01-2022. 3.2. In this connection, the relevant legal provisions in this regard under the GST regime are as under: - 3.2.1 As per Serial 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 243W of the Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the light of definition of Governmental Authority Government Entity as given in Notification No. 32/2017-Central Tax (Rate) dated 13-10-2017. Hence, as regard to the question of taxability of services provided by the taxpayer to Maharashtra Jeevan Pradhikaran (MJP) prior to 01-01-2022, from the documents available on record, it cannot be ascertained that MJP is set up as an authority or a board or other body including a society, trust, corporation by an Act of Parliament or a State Legislature with 90 per cent or more participation by way of equity or control. Therefore, it appears that even prior to 01-01-2022, the exemption claimed shall not be admissible. 3.4, Subsequent to issuance of Notification No. 16/2021- Central Tax (Rate) dated 18-11-2021, however, the words Governmental authority or a Government Entity have been omitted with effect from 01-01-2022 and as such the services provided to these entities will be liable to tax. Therefore, post 01-01-2022, it appears that even if MJP were to qualify as Governmental authority or a Government Entity, services provided to MJP would be taxable. 3.5. With respect to the question No. 3 framed by the appellant, it is already submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of the agreement at the times and in the manner prescribed in the Consultancy Agreement. (Emphasis supplied) Para 4 In consideration of the payments to be made by the MJP to the Consultant as hereinafter mentioned in Clause 4 of the Consultancy Agreement, the consultant hereby agrees with the MJP to perform the Services of Project Development Management Support as CLASS I Consultant for Konkan Region in conformity with the provision of the Agreement. (Emphasis supplied) 5.1.5. Important relevant clauses of the Tender document calling Request for Proposal (RFP) for Empanelment of consultants for Project Development Management Support -e. Tender No 2-2020-21 are as under, (a) Page 54 Clause -1.10 Taxes and duties: All duties, taxes and other levies as applicable on date of submission of Tender shall be payable by the Consultant in respect of the transaction between the Consultant and their consultation vendors/sub-suppliers is included in the Proposal s price i.e. in financial rate and Maharashtra Jeevan Pradhikaran will entertain no claim on this behalf. All taxes duties and levies in respect of the transaction between Maharashtra Jeevan Pradhikaran and Consultant are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... van Mission, Tal. Khalapur Dist. Raigad services for water supplies scheme . Total value of the invoice amount is Rs. 5.62,000 on w2hich SGST CGST are charged at Rs 50.580/- each at rate of 9%. SAC/ HSN code of the services given is stated to be 998331 . (Emphasis supplied) 5.1.7. The applicant has submitted payment receipt Advice with its application. The payment receipt advise is actually PFMS generated DSC transaction payment advice report . Agency name stated in the advice is Jala Jeevan Mission Maharashtra, Escrow account (MHRG00012717) debit Bank State Bank of Indie, approval date in PFMS is 15th June 2022 amount Rs. 4,68,700/-. Beneficiary name Geospatial Studio LLP. 5.2 The applicant has raised multiple questions. which need findings, discussion decision on following issues. 5.2.1. What is the classification of the services supplied by the applicant to Maharashtra Jeevan Pradhikaran ( MIP ) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, and its HSN/ SAC Code and applicable entry in Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017? 5.2.2. Services provided to MJP for the Constitutional function of State Central Governments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JP are taxable and not exempted whether before 01-01-2022 or thereafter. Reproduced in detail in Paragraph No 3 of this Order. 5.3.3. Findings. observations, discussion decision: The services supplied by the applicant are in nature of Technical Consultancy for Project Development and Management support services, and hence classifiable under SAC code 998399- Other professional, technical and business services n.e.c., under the head Business and Production Services covered at Sr No. 21 (ii) in the Notification No 11/2017-Central Tax (Rate) dated 28th June 2017 and are taxable at rate of 18% (9% CGST SGST each), wherever exemption is not applicable. Wherever exemption is not applicable. 5.4 Whether Services provided to MIP for the Constitutional function of State Central Governments. for which these Governments are liable to pay the consideration of contract. and is made through PFMS. supplies are in fact made to the Central State Government. Hence, even after deletion of the word Government Authorities with effect from 01-012022, from the notification entry number 3, the services provided by the applicant shall be eligible for benefit of exemption. At the outset it is submitted by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Officer: - The Officer stated that supplies to MJP are taxable and not exempted whether before Ol01-2022 or thereafter. Reproduced in detail in Paragraph No 3 of this Order. 5.4.3 Findings, Observations, discussion: Being creature of GST Law this Authority cannot comment on the submission that setting up MJP is entirely unlawful and contrary to the constitutional prescriptions and procedure, this is not appropriate forum to discuss such issue. However, it is clear that, as per the Constitution it is the function/ duty or responsibility of State/CentraI Government or local Government, and hence setting up MJP which is a body corporate owned by Government is entrusted with the function, is not prohibited but entirely expected, for development, implementation and regulation of such function. a Discussion and provisions of the MJA Act, on this issue are as under, The Maharashtra Jeevan Authority Act, 1976, has set up the MJP. The MJA Act, does not mention that MJP is agent of the State Government. In fact the MJP has Authority to contract on its own (Refer Section 3 and 24) and entitled to sign contracts. Secondly, Government of Maharashtra has not given MJP any authority to sig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of GST Act- As per section 60 of The MJA Act, 1976, State Government has control over the MJP . Under GST Act- MJP and the State Government are related persons and not agents and principal. And supply by them to each other is treated as deemed supply. Under GST such agent Principal relation does not exist between MJP State Government. Refer relevant provisions which are as under, (a) Section 15. Value of Taxable Supply. Explanation . - For the purposes of this Act - (a) persons shall be deemed to be related persons if- . (iv) any person directly or indirectly owns, controls or holds twenty-five per cent. or more of the outstanding voting stock or shares of both of them; (v) one of them directly or indirectly controls the other; (b) the term person also includes legal persons; howsoever described, of the other, shall be deemed to be related. (b) Section 25. Procedure for registration. (4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act. (5) Where a person who has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicant. (f) Provisions of Article 282 of the Constitution of India- 283. Custody, etc. of Consolidated Funds, Contingency Funds and moneys credited to the public accounts: - (1) The custody of the Consolidated Fund of India and the Contingency Fund of India, the payment of moneys into such Funds, the withdrawal of moneys therefrom the custody of public moneys other than those credited to such Funds received by or on behalf of the Government of India, their payment into the public account of India and the withdrawal of moneys from such account and all other matters connected with or ancillary to matters aforesaid shall be regulated by law made by Parliament, and, until provision in that behalf is so made, shall be regulated by rules made by the President. (2) The custody of the Consolidated Fund of a State and the Contingency Fund of a State, the payment of moneys into such Funds, the withdrawal of moneys therefrom, the custody- of public moneys other than those credited of such Funds, received by or on behalf of the Government of the State, their payment into the public account of the State and withdrawal of moneys from such account and all other matters connected with or ancill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount to various suppliers or vendors of the implementing agencies for such Constitutional work for which grants are earmarked. We have gone through the Interim Budget-2024 Speech of Hon ble Finance Minister, Government of India, in Para 5 - Inclusive Development and Growth 5. Our humane and inclusive approach to development is a marked and deliberate departure from the earlier approach of provisioning up-to-village level . Development programmes, in the last ten years. have targeted each and every household and individual. through housing for all , har ghar jal , electricity for all, cooking gas for all. bank accounts and financial services for all in record time. The book-let Budget at a Glance -of Hon ble Finance Minister for 2024- to see any such content regarding Jal Jeevan Mission. Para 6 of the Budget Booklet is as under- 6. Total resources being transferred to the States including the devolution of State s share. Grants/Loans and releases under Centrally Sponsored Schemes, etc. in BE 2024-25 is Rs. 22.222,264 crore, which shows an increase of Rs. 4,13,848 crore over Actuals of FY 2022-23 Page 16 shows Budget outlay for Maior Schemes in Which in Heading Core Scheme at Sr No 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of Article 282 Article 283 as explained by Hon ble High Courts, we hold that the Supplies made by the Applicant to the MJP, are in fact supplies to the MJP itself and even by any stretch of imagination it can be treated as supply to the respective State or Central Government. 5.4.7. Under the Jal Jivan Mission or any work done for water supply Scheme, the whole work completed is property of the government and hence the services supplied by the applicant are services provided to the state government. 5.4.8 Submission of the Jurisdictional Officer: The Officer stated that supplies to MJP are taxable and not exernpted whether before 01-01-2022 or thereafter. Reproduced in detail in Paragraph No 3 of this Order. 5.4.9 Findings. observations and discussion: - a. Provisions of vesting of property to MIP is laid down in section 18 of the MIA Act, 1976, which is as under, CHAPTER III. - VESTING OF PROPERTY ASSETS, LIABILITIES AND OBLIGATIONS AND TRANSFER OF EMPLOYEES. 18. (1) From such diff rent dates as may be specified, from time to time, by the State Government (hereinafter in this section referred to as the appointed date ), (I). (a) the properties and assets (including water ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied; (Emphasis supplied) 5.4.11 Submission of the Jurisdictional Officer: - No submission made on this issue. 5.4.12 FINDING OBSERVATIONS AND DISCUSSION - a. As per terms of contract between the MJP And Applicant, the terms of payment are as under, NOW THIS AGREEMENT WITHNESS AS FOLLOWS - 3 The MJP hereby agrees to pay the Consultant in consideration of the performance of the Services such amounts as mav become payable under the provisions of the agreement at the times and in the manner prescribed in the Consultancy Agreement. 4 In consideration of the payments to be made bv the MJP to the Consultant as hereinafter mentioned in Clause 4 of the Consultancy Agreement, the consultant hereby agrees with the MJP to perform the Services of Project Development Management Support as CLASS I Consultant tor Konkan Region in conformity with the provision of the Agreement. Tender Document- Page 63 64 Para 5.5 6.4. Payment: In consideration of the Services performed by the Consultants under this Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant could not produce any clause of the Contract for provision of service which states that The Government of Maharashtra is liable to pay the consideration of the Contract. Nor could he produce any document whereby The Government of Maharashtra has undertaken to pay the consideration. b. The MJA Act,1976- Has made express provisions for Financial Resources Authority to Contract and section 33 provides that The Government of Maharashtra is only guarantee the loan taken by MJP. Here consideration against supply of services is not loan given by Applicant to the MJP. CHAPTER IV. CONTRACT, FINANCE, ACCOUNTS AND AUDIT. 24. Execution of contracts, etc Every contract or assurance of property on behalf of the Authority shall be in writing and executed by such authority or officer and in such manner as may be provided by regulations. 25. Authority Fund The Authority shall have its own fund to be called the [Authority] Loan Fund , which shail also be deemed to be a local fund and to which shall be credited all moneys received by or on behalf of [the Authority] by way of loans 28. Grants and subventions to the Authority. The State Government may, under appropriation duly made in this b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s will be reserved according to the schedule caste/tribe population. A total estimated expenditure of Rs. 13668.50 crore is expected to implement Jal Jeevan Mission in the state. These estimates are taken as a rough estimate and the expenditure on the actual scheme will be spent as per the administrative approval of that scheme. Para-11. Public Financial Management System (PFMS): A commercial account has been opened in a Scheduled / Nationalized Bank through the State Water and Sanitation Mission and is being approved by the Government. After the central government fund is received in the A fund of the state government. it will be transferred along with the state share to the Central Department of State Water and Sanitation Mission within days. As per the guidelines of Jal Jeevan Mission, financial expenditure control should be done only through Public Financial Management System (PFMS) system. It is mandatory to act according to the instructions received from the central government. 5.4.14 FINDING OBSERVATIONS AND DISCUSSION- Provisions of the aforesaid GR clearly state that (i) SMSM- is Registered as a society registered on 10-02-2010 under the Society Registration Act. 1860. (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial management application developed and implemented by the Controller General of Accounts (CGA), Department of Expenditure, Ministry of Finance, Government of India. (ii) Payment Exchequer Control: Article 283 (1) of the constitution paved wav for framing of Government of India Receipts and Payments Rules, which govern the payment and exchequer control functions. PFMS which has codified these rules facilitates this entire process online in a seamless and paperless manner. Instructions issued by Ministry of Jalshakti vide No. PD-26025/ 2/2019-SBM dated 2107-2024 about Implementation of PFMS by Implementing agencies are in brief as under. (i) Brief introduction of Public Financial Management System (PFMS) is a web-based application for online management of schemes of GOI and information decision support system (DSS) for stakeholders. (ii) It is for Just-in-time Release of funds. It assists in complete monitoring of usage of funds including infOrmation on its ultimate utilization. (iii) The system is developed and maintained by O/o CGA, Dept, of Expenditure, Ministry of Finance, Government of India, New Delhi. It is monitored by Prime Minister Office (PMO) regularly. Para 16.1- Rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and then approves the Invoice. (iii) After approval of the Invoice, it is processed for payment through PFMS. (iv) The account from which amount is paid belongs to The MJP for implementation of the Scheme. (v) MJP or for that matter any implementing agency is allowed to open multiple Bank accounts qua scheme for use on PFMS. After the approval of Bill and after sufficient funds are received in the MJP account, transfer of funds is approved by MJP through PFMS. The account which is debited, is of MJP and not Government account. From the guidelines stated above, it is very clear is that PFMS- (i) is The Public Financial Management System (PFMS) is a web-based financial management application. not Central or State Government. nor is it Bank account of either Government. (ii) Each Nodal Body either of Centre, State. District or the implementing agency will have to open their own Bank account, which shall not be changed during implementation of the scheme. (iii) Grants will be released by Centre and State just in time. Thus, it is clear that payment through PFMS is not payment by Government. but payment made bv Implementing Agency (here either MJP or SWSM). out of the grants received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income Tax, in CIVIL APPEAL NOS. 792-793 OF 2014 decided on 2 July, 2018, where the issue of benefits of exemption available to Governmental Authorities vide Section 10 (20A), and effect of its deletion on the levy of Income Tax is decided. In para 53 Hon ble Supreme Court held as under, Para 53. The following passage from Cape Brandy Syndicate v. IRC 1921 (1) KB 64 has been approved by the Apex Court in the decisions rendered by their Lordships. in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in. nothing is to be implied, one can only look fairly at the language used. (Emphasis supplied) S.S Supply of services where Time of supply is on or before 31-12-2021. 5.5.1 To decide applicability of the Exemption entry at Sr. No. 3 of the Notification NO. 12/2017Central tax (Rate) to the supplies during impugned period, following issues need to be decided. Table SL. No Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (percent.) Condition (1) (2) (3) (4) (5) 3 Chapter 99 Pure services (excluding works con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entrusted to the municipality under article 243W of the constitution. a. Submission of Applicant- It is submitted that the aforesaid services provided for Works to be executed by MJP for Water supply and in particular Jal Jivan Mission. Hence are in relation to the function entrusted under article 243G 243W. b. Submission of the Jurisdictional Officer is as under: - Officer has not commented on this issue. c. FINDING OBSERVATIONS AND DISCUSSION - From the agreement, it is clear that the applicant has provided Technical Consultancy for Project Development and Management support services for water supply scheme at various locations implemented by the MJP for supply of water, which are the function stated in article 243G 243W. For sake of reference- relevant functions are reproduced as under, (a) ELEVENTH SCHEDIJLE (Article 243G) -Sr No. 3. Minor irrigation, water management and watershed development. at Sr No 11. Drinking water. (b) TWELFTH SCHEDULE (Article 243W)- Sr No. 5. Water supply for domestic, industrial and commercial purposes Sr No. 6. Public health, sanitation conservancy and solid waste management 5.5 5 Whether the MJP is Governmental Authority as required in entry numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicability of the Exemption entry to the applicant for impugned period following issues need to be decided. 5.6-1 Submission of the Applicant- In this regard also, the applicant has argued that Supply of Services by it, to the MJP for Jal Jeevan Mission, are in fact supplies to the Central Government, State Government for the aforesaid reasons. 5.6-2 Submission of the Jurisdictional Officer is as under Till Maharashtra Jeevan Pradhikaran was not qualifying as Government entity, it appears that even prior to 01-01-2022, the exemption claimed shall not be admissible. Now as from 01-01-2022 the words Government Entity has been omitted from entry number 3 of notification number 12/2017-Central Tax (Rate), Maharashtra Jeevan Pradhikaran does not get covered by the said entry Hence activity of supply of services by applicant to Maharashtra Jeevan Pradhikaran is taxable from 01-01-2022. 5.6B Findings and Discussion on the issue- Deletion of words or a Government Authority or a Government Entity , from the entry at Sr No. 3 will result in making this entry not applicable of supply of pure services to the or a Government Authority or a Government Entity; (a) This decision is supported by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate v. IRC 1921 (I) KB 64 has been approved by the Apex Court in the decisions rendered by their Lordships. in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can onlv look fairly at the language used. (Emphasis supplied) 54, We fully endorse the views taken by the High Court in the above two judgments. 55. Now, reverting back to Explanation to Section 10(20), these are entities which mean the local authority. The submission of the appellant is that the appellant is covered by Clause (ii) of the Explanation i.e. Municipality as referred to in clause (e) of Article 243P of the Constitution . We, while discussing above provisions, have already held that the appellant is not covered by the word/expression of Municipality in clause (e) of Article 243P. Thus. the appellant is not clea rlv included in sub-clause (ii) of Explanation. It is not even the case of the appellant that the appellant is covered by Section 10(20) except clause (ii). 56. Thus, we are of the considered opinion that the appellant is not covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Maharashtra Jeevan Pradhikaran ( MJP ) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced before 01.01.2022? Answer . - Nil, being exempted under Entry at Sr. No. 3 of the Notification No. 12/2017-Central tax (Rate)- dated 28th June 2017. Question 2: What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran ( MJP ) as a part of Jal Jeevan Mission which is a mission of Government of India which is performed invoiced after 01.01.2022 but which is allotted before 01.01.2022? Answer: - Taxable at rate of 18% (at 9% under CGST SGST Act, each), being covered by Entry at Sr. No. 21 Heading 9983, (ii) of the Notification No. 11/2017-Central tax (Rate)- dated 28th June 2017. Question 3: What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran ( MJP ) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced after 01.01.2022)? Answer : - Taxable at rate of 18% (at 9% under CGST SGST Act, each), being covered by Entry at Sr. No. 21 Heading 9983, (ii) of the Notification No. 11/2017-Central tax (Rate)- dated 28th June 2017. Question 4: Who ..... X X X X Extracts X X X X X X X X Extracts X X X X
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