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TMI Blog2024 (10) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... ashtra Jeevan Pradhikaran (MJP) 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 28 th June 2017? - HELD THAT:- 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 28 th 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 MJP for the Constitutional function of State Central Governments, for which these Governments are liable to pay the consideration of contract, and as payment is made through PFMS, supplies are in fact made to the Central State Government? - HELD THAT:- The argument of the applicant that services provided to MJP for the Constitutional function of State Central Governments, for which these Governments are lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act respectively] by M/s. The Nisarga Consultancy the applicant, seeking an advance ruling in respect of the following questions. 1. 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 before 01.01.2022? 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? 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 MJP which are paid to the applicant on services provided before 01.01.2022? 5. Who is the service receiver with in the meaning of Sec.2(93) of CGST/MGST Act in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities have undisputedly been held to be exempted from tax by virtue of notifications issued under the CGST/MGST Acts. Even under the existing laws (Finance Act, 1994) the above activities were exempted. The applicable notifications under GST are reproduced as a matter of convenience. 1.4 On 18th November 2021 by Notification No. 16/2021 -Central Tax (Rate) the words or a Governmental authority or a Government Entity came to be omitted from Sr. 3 4 of Notification 12/2017. 1.5 In Maharashtra, the Govt. of Maharashtra has enacted 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 per 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity 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 Constitution 2.1.1 There have been quite a few judicial pronouncements mandating that sovereign functions are exempt from taxation. The same are quoted as a matter of illustration. a. Krishi constructions Pvt. Ltd. Versus commissioner of CT, Hyderabad (43 GSTL 236) Wherein it was held that services provided by the Appellant to Government Corporations or Authorities established by the State Government under a legislation or government order are provided to a Government Authority with in the meaning of Notification 25/2012. b. Karad nagar parishad versus commissioner of C. Ex. ST, Kolhapur (20 GST. 288) Where in it was held that regulatory fees charged by the Municipal Corporation come with in the ambit of sovereign functions with in the meaning of Article 243W and hence not exigible to service tax. c. Ganpati mega builders (1) Pvt. Ltd. (58 GSTL 324) Here in it was held that construction services falling within the purview of Article 243 G W provided to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through PFMS by appointing appropriate officers to disburse it. 2.1.2. The Applicant says submits that supply of water construction of water supply schemes is a constitutional duty of the respective Government under Article 243G/243W of the Constitution of India. The schemes impugned herein, where in the Applicant has rendered pure services are fully financed by the Central Government or the State Government. The Applicant is annexing herewith following documents that clearly unequivocally show that the work of water supply/drainage schemes undertaken which is outsourced to the applicants is being executed controlled by 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agent, the agent works for and on behalf of, the principal. In the present case, the water supply sewage disposal schemes are constitutional responsibilities of the State Governments the Panchayat Raj Institutions under Article 243G 243W respectively. The above functions are managed by the Central Government as a mission. In such circumstances, it must be held that the Central Government along with the State Governments/ municipalities, as principals, are executing the water supply disposal schemes through their agent MJP. The payments made by MJP, in fulfilment of the constitutional of duties the State/Central/Municipality 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 responsibilities of the Centre State Governments, as per Entry 56 of List I Entry 17 of List II re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the above reasons, the applicant prays that it be held that despite the deletion of words Government Authority/ Entity from notification no 12/2017 with effect from 01-01-2022, the activity performed rendered by the applicant in respect of Jal Jeevan Mission remain to be rendered to the respective Government who has financed the above activity through their budget allocations as a part of their Constitutional function. 2.5. The applicant has annexed all the relevant documents in support of the averments. If the Hon'ble Authority for Advance Ruling desires certain more information /or documents, the applicant is ready willing to supply the 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 Il 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider providing service a service receiver to whom the service is provided. The question that is raised is who shall be the service receiver in case the money is provided through Budgetary support as a part of Government Scheme. In case of a Centrally sponsored scheme where the payment is through budgetary support, the payment is authorized through a money bill that becomes a Finance Act upon passage, duly passed in the Parliament/ Assembly having the force of law. The above statement also applies with full force to the budgetary support by State Government. Section 2(93) defines recipient of service as the person who is liable to pay the consideration 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the empanelment contract is Standard form contract. MJP as a body corporate having perpetual existence has devised a standard form contract. JJM has been formulated in 2019 with limited time span of 5 years. It is a scheme which contemplates 100% Government funding, as against other schemes where contributions from other stake holders are involved similarly the present application is not intended in respect of schemes implemented through Commercial Borrowings. 2.6.11. Therefore, given the fact that payment is made through a designated account not in control of MJP rather in full control of Central/ State Government, JJM as a scheme entails the responsibility 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, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that the present Jal Jeevan Mission which is impugned in the present application has been devised in consequence of the above duty of the respective Governments payments under Jal Jeevan Mission are made in consequence of the Constitutional/ Legal duty of the sovereign Governments to supply water. It is in this context that the applicants submit that the State/Central Government are making the payments being Constitutionally legally liable to make payments for the water supply schemes. 2.7.4. The immediate issue that arises is then what is the impact of the Governments above legal duty to pay in the present matter where the contractual obligation is undertaken by 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 contractu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1-12-21 are exempted with in the meaning of notification no 12/ 2017 entry 3 as amended w.e.f. 01-01-22 being to MJP which is a Government Authority/ Entity supplies after 01-01-22 are taxable @ 18% 3. Submission of the jurisdictional officer ; - 3.1 In this said matter, the notice in form ASMT-10 has been issued as per case received from EIU, Mumbai for scrutiny of returns on 30.11.2023 as mentioned by the applicant. The issue parameters in the said notice are I) Parameter-76- comparison of taxable turnover derived from GSTR-7 filed by the recipient vis- a-vis the taxable turnover reported by the taxpayer in his GSTR-3B, 2) Parameter-80- Interest on late filing of GSTR-3B. 3.2. The service rendered by the applicant has been given to Maharashtra Jeevan Pradhikaran (MJP, which is a Government entity and non-Government of Maharashtra. As Maharashtra Jeevan Pradhikarna (MJP) is Maharashtra water supply and sewerage Board (MWSSB) and was established as per MWSSB Act 1976 (Page no.-1) and was subsequently named as Maharashtra Jeevan Pradhikaran (MJP in 1977. The same subject matter is also addressed by the Hon Maharashtra Authority for Advance Ruling in order no. GST-ARA-71/2019-20/B-60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pradhikaran] (Here in after referred as MJP ), is a body Corporate set up by The Maharashtra Jeevan Authority Act, 1976 (hereinafter referred as the MJA Act, 1976 ), for rapid development and proper regulation of water supply and sewerage services in the State of Maharashtra. 5.1.3. The MJP has granted a contract for supply of Technical Consultancy for Project Development and Management support services to the Applicant vide agreement for Empanelment dated 25 of March 2021. 5.1.4. Important terms of the Contract, necessary for decision are reproduced as under, (a) The agreement between Maharashtra Jala Pradhikaran and The Nisarga Consultancy (Emphasis supplied) (b) Services to be performed by the Consultant are namely: i Carrying out Reconnaissance Surveys and preparation of Feasibility Report. ii Carrying out detailed detail of Tender Documents and Bid Process Management including preparing proposal for getting requisite permissions from various concern competent authority. :IV. functioning as Project Management Consultant Technical Auditor. V. Supervision and Monitoring of Operation and Maintenance (O M) and asset management for a for a period of maximum one year . (Emphasis supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or such payment have been met, and the consultants have submitted an invoice to the MJP specifying the amount due. If there is delay in payment due to shortage of funds or any other reason no extra payment or Interest will be payable on account of delay of payment, however MJP will tried to release payment as early as possible from other sources of MJP by taking approval from competent authority. The Maharashtra Jeevan Pradhikaran shall make the payment of the Consultants periodically as given in schedule of payment above within Thirty days on receipt of invoice from the consultant after the receipt by the Maharashtra Jeevan Pradhikaran of bills with supporting documents. Only such portion of a monthly statement that is not satisfactorily supported may be withheld from payment. (Emphasis supplied) 5.1.6. The applicant has submitted details of R.A. Bill no.1 dated 24-10-2021 in name of Executive Engineer Maharashtra Jeevan Pradhikaran, Division-Pune, District-Pune. Description of services is submission draft PFR, submission for final PFR Submission of Final report under Jal Jivan Mission services for water supplies scheme . Total value of the invoice amount is Rs. 5,50,213/-. And Bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India allotted, and its HSN/SAC Code and applicable entry in Notification No. 11/ 2017- Central Tax (Rate) dated 28 th June 2017. The related entry is as under, Heading Group Service Code (Tariff) Service Description Heading 9983 Business and Production Services Group 99839 Other Professional, technical and business Services. Heading 9983-Group 99839 998399 Other professional, technical and business services n.e.c. Explanatory Note - This service code includes drafting services (detailed layouts, drawings, plans and illustrations of buildings, structures, systems or components from engineering and architectural specifications, done by architectural draftsmen or engineering technicians); compilation services of facts and information (i.e. databases), n.e.c. Notification No.11/2017- Central Tax (Rate) dated 28 th June 2017. Sr No Chapter, Section or Heading Description of Service Rate (percent.) Condition (1) (2) (3) (4) (5) 18 Section 8 Business and Production Services 21 Heading 9983 (Other professional, technical and business services) (ii)Other professional, technical and business services other than [(i) and (ia) above] [and serial number 38 below] media. 9 - 5.3.1 Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fically entrusted to it by the Constitution. In order to be compliant with the constitutional provisions of article 243 G W, it has to be construed that the function of water supply, irrigation, canaling etc. is being carried on by the State Government through the agency of Maharashtra Jeevan Pradhikaran, any attempt to interpret otherwise would mean that the State Government has abdicated its abdicated its function of water supply, irrigation, canaling etc. to the Maharashtra Jeevan Pradhikaran which would be entirely unlawful contrary to the constitutional prescriptions and procedure. 5.4.1. Any law enacted in India has to be interpreted construed in harmony with the provisions of the Constitution or otherwise it falls prey to the vice of unconstitutionality. If as per the Constitution a given activity is the function/ duty or responsibility of State/Central Government or local Government, then, despite the fact that apparently a body corporate owned by Government is entrusted with the function, the activities of the said body corporate have to be construed as an agent of the respective Government. For all the above reasons, the applicant prays that it be held that despite the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uccession and a common seal, with powers, subject to the provisions of this Act, to acquire, hold or dispose of property, both moveable and immoveable, and to contract, and may sue or be sued by its corporate name aforesaid . (Emphasis supplied). Section 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 . (Emphasis supplied). b. The Empanelment supply of Service Contract executed between the MJP and the Applicant dated 31-03-2021, does not mention that MJP is agent of the Authority or that it is signing contract on behalf of the State or Central Government. Relevant clauses are as under, This Agreement (here in after called the March, Contract ) is made at Mumbai on 30 th of 2021 between the Maharashtra Jeevan Pradhikaran (MJP) having its registered office at 4th Floor, Express Towers, Ramnath Goenka Marg, Nariman Point, Mumbai, Maharashtra 400021. (Herein after called the MJP which expression shall means and includes its Successor or succession and permitted assigns) of the one part. 3 The MJP hereby agrees to pay the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itution of India- 282. Expenditure defrayable by the Union or a State out of its revenues The Union or a State may make any grants for any public purpose, notwithstanding that the purpose is not one with respect to which Parliament or, the Legislature of the State, as the case may be, may make laws, Hon ble Karnataka High Court in case of K N Subba Reddy v state of Karnataka, published in AIR 1993 Kant 66, has explained the purpose , Scope and Rights arising out of Grants under Article 282 has explained as under, This provision vests in the Centre a very broad power to give grants to the States the States for any specific public purpose. The attitude of the courts is not to interfere this refer this matter and leave it to the judgment of the Central Government. The proper place lace to criticise any grant by the government is the legislature and not the courts The grants given under Art. 282 are also known as discretionary grants, the reason being that the Centre is under no obligation to give these grants to any State; the Centre may give such a grant to one State and not to another, and the matter lies solely within the Centre's discretion. The use of the word may in Art. 282 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e creates any right for benefit of vendors and suppliers of implementing Agencies., as claimed by the Applicant. 5.4.4 Decision- Submission of the Applicant is not based on the provisions of the MJA Act, 1976, the GST Act, 2017 and terms of Contract. The applicant could not produce any evidence (Binding Judgment on this issue) that The State Government has abdicated its responsibility while setting up the MJP. Secondly, to say that MJP is agent of State in Common Law and hence supplies made to MJP are in fact supplies made to the State Government, is contrary to the express provisions of section 15, 25 and Para v2 of Schedule I of the GST Act, as aforesaid. For purpose of GST, these are distinct Persons. 5.4.5 Financial Bill- after its passage thereof in parliament- The respective Governments become liable to pay for the Developmental schemes related to Constitutional functions. And these provisions of Finance Act, will override the provisions of the MJP Act, thereby making respective Governments, as persons liable to pay to the applicant. Hence a as per provisions of section 2 (93) of the GST Act, 2017 and, they shall be treated to be recipient of service. Therefore, any service p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Of Punjab And Others Civil Writ Petition No.20278 of 2012 (O M) decided on January 16, 2013, in which it is held as under, 21. We make it clear that because of the reason that petition is rejected as not maintainable, we have not gone into the proprietary wisdom and justification of the expenditure involved. It is for the Legislators to debate, at the Floor of the House, as to of the House, as to whether the expenditure is justified and can be treated as in public interest or not; treated as in public interest or not; whether it serves any public interest to give donation of Rs. 1 Crore to the school, which is not located in the State of Punjab, but in Himachal Pradesh; whether the expenditure could be appropriated to the said Programme/scheme for which it was allocated and spending the amount in the aforesaid manner amounts to violating the provisions of violating the provisions of the said Programme or not; whether a Sum Or Rs. 1 Crore should be given to a school, which otherwise enjoys robust financial health and on the other hand, the State of Punjab is unable to even release grant-inaid to the aided schools situated in its own State because of which the teachers of this Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be the rights, liabilities and obligations of the Authority. (2) such properties, assets, rights, liabilities and obligations shall valued in such manner as the State Government may determine. (3) All suits and other legal proceedings with respect to the matters referred to above instituted or to be instituted or defended by or against the State Government before the appointed date may be continued, or instituted, or defended by or against the Authority. b. Decision - Property created under the Water supply schemes implemented by the MJP vests in MJP only, and not with the Government. Hence the argument being contrary to law is not accepted. 5.4.10 The work executed in this contract by the applicant are related to Jal Jivan Mission scheme launched by the Government of India, in 2019, to provide potable water is available to the last village and town through pipeline. It is further submitted that as per government resolution, 50% share of the expenditure incurred for the scheme is going to be is borne and shared by the central government and the remaining 50% by the state government. Hence it is submitted that both these Governments are liable to pay the applicant the conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 63 64 Para 5.5 6.4- Payment: In consideration of the Services performed by the C Consultants under this Contract, the MJP shall make to the Consultants such payments and in such manner as 1S pr. make to the Consultants such payments and in such manner as is provided schedule of Payments of this Contract as per scope of work. work. Terms and conditions of payment: The rates given in schedule of payments are including GST and statutory taxes. Payment will be made as per payment schedule stated in the Schedule of payment Appendix Il. Any other payment shall be made after the conditions listed in the Schedule for such payment have been met, and the consultants have submitted an invoice to the MJP specifying the amount due. If there is delay in payment due to shortage of funds or any other reason no extra payment or interest will be payable on account of delay of payment, however MJP will tried to release payment as early as possible from other sources of MJP by taking approval from competent authority. The Maharashtra Jeevan Pradhikaran shall make the payment of the Consultants periodically as given in schedule of payment above within Thirty days on receipt of invoice from the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to which shall be credited all moneys received by or on behalf of 1 [the Authority] by way of loans 28. Grants and subventions to the Authority The State Government may, under appropriation duly made in this behalf, from time to time, make grants and subventions to the Authority for the purposes of this Act, on such terms and conditions as the State Government may determine. 29. Loans to the Authority The State Government, from time to time, advance loans to the Authority on such terms and conditions, not inconsistent with the provisions of this Act, as the State Government and the Authority may agree upon. 33. Government as guarantor The State Government may guarantee the repayment of any loan and payment of interest on all or any of the loans given or transferred to the Authority for the purposes of this Act. 5.4.18. Jal Jeevan Mission- Govt Resolution- Water Supply and Sanitation Department Government Decision No.: JJM- 2019/Pra. Kra.No.138/PAPU-10 (07), G. T. Hospital Premises, New Ministry, Mumbai - 400 001 Dated: 04 September, 2020 -which lays down guidelines for implementation of Jal Jeevan Mission in Maharashtra, through State. Loose translation is as under, Para 6- Orga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evan 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. Findings, observations and decision: - Provision 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) 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. (Emphasis Supplied) (iii) The respective Governments have made available the Grants to MJP for Execution various Water Supply Schemes. Provision of Grant to MJP cannot be said to be payment made by the Central Government State Government in ratio of 50% each are made by them directly to the applicant. From these facts and findings and aforesaid discussion, it is decided that, the Jal Jeevan Mission is implemented through SWSM, which is Society and has authority to undertake work, as per guidelines of the Jal Jeevan Mission, Authority and responsibility to Open Bank account. Both the Governments will transfer funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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. o It is monitored by Prime Minister Office (PMO) regularly. Para 16.1- Release from Centre to State level implementing body.... The funds under SBMG will be released electronically by DDWS to the State Governments as per instructions issued by the Ministry of Finance from time to time. The State Governments shall release the funds to the SSBMG with in 15 days of transfer of funds from DDWS along with matching State share. In case of advance State share is released by the State Governments, the Same can be adjusted against the Centre share released in the subsequent year(s). Funds under SBMG will be released to the State / UTs only after the respective Government provides the undertaking that funds earmarked under 15th Finance Commission grants for sanitation activities are being devolved to rural local bodies. The States/UTs will operate a single savings bank account in any Scheduled Comme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Grants will be released by Centre and State just in time. Thus, it is clear that payment clear that payment through PFMS is not payment by Government, but payment made by Implementing made by Implementing Agency (here either MJP or SWSM), out of the grants received by them from respective Governments. (Emphasis supplied) Last but not least- In Indian Banking system money is transferred from one account to another by way of NEFT, which is National Electronic Fund Transfer (NEFT) is an online fund transfer system introduced by the Reserve Bank of India (RBI) in November 2005. transfer system introduced by the Reserve Bank of India (RBI) in November 2005. This nationwide payment system ensures a safe and faster method of fund transfer between banks across the country. This fund transfer system operates on a deferred net settlement (DNS) basis, under which the amount will be settled in batches only at a particular point in time. To initiate a NEFT transfer, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esumption 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) 5.5 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 5r. No. 3 of the Notification No. 12/2017- Central tax (Rate) to the supplies during impugned period, following issues need to be decided. Table Sr. No Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (precent.) 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 ***{ 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 243W of the Constitution. NIL NIL ***Sr. No. 3 in the entry in column (3), the words or a Governmental authority or a the words or a Governmental authority or a Government Entity omitted by No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 SCHEDULE (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 number 3 defined in definition 2 (zf) of the exemption notification. a . Submission of Applicant - It is submitted that the MJP is set up under The Maharashtra Jeevan Authority Act, 1976 by Legislature of Maharashtra end hence it is Governmental Authority as defined in definition (zf) of the exemption notification. b . Submission of the Jurisdictional Officer is as under - Officer agreed with the applicant. c . FINDING OBSERVATIONS AND DISCUSSION - Definition clause 2 (zf) of the notification is def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, far-fetched and based on conjectures and surmises and very specious argument and hence rejected and are in fact supplies made to the MJP. 5.6.3 Submission of the Jurisdictional Officer is as under - Further the notification no 12/2017-Central Tax (Rate)dated 28th June 2017 was amended by Notification no. 16/2021-Central Tax (Rate) dated 18th November 2021 omitting the words or a Government authority or a Government Entity Point (i) page no-1. Hence the services rendered by the applicant are received by Maharashtra Jeevan Pradhikaran (MJP) which is a Government Entity and thus this service is taxable as any normal service and taxable as per type of service rendered. 5.6.4 Findings, observation and decision: - 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 principle laid down by Hon ble Supreme court in case of New Okhla Industrial Development ... vs Chief Commissioner of Income Tax, in CIVIL APPEAL NOS.792-793 OF 2014 decided on 2 July, 2018. where the issue of benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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) 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 (li) 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 clearly 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 by the definition of local authority as contained in Explanation to Section 10(20). 57. In view of what has been stated above, we dismiss these appeals. b. This decision is support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er: - Nil, being exempted under Entry at Sr No. 3 of the Notification No. 12/2017-Central tax (Rate)- dated 28 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 28 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 28 ne 2017. Question 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 MJP which are paid to the applicant on services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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