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TMI Blog2025 (2) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 12/2017-CT (R), as amended, pure services [excluding works contract services or other composite services involving supply of any goods], provided to a Central Government, State Government, Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243W of the Constitution of India, is exempt. Likewise, in terms of serial no. 3A of notification ibid, composite supply of goods and services, in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243 W of the Constitution are exempt. While dealing with an exemption notification, an exemption notification is to be strictly interpreted in terms of the judgement of the Constitution Bench of the Hon'ble SC in the case of Dilip Kumar and Company [2018 (7) TMI 1826 - SUPREME COURT (LB)] wherein it was held that 'Exemption notification should be interp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, which has 100% control, is liable to be classified as the State Government, not agreed upon. The appellant is not eligible for the benefit of the exemption notification, ibid, in respect of the services provided to GPSC. X X X X Extracts X X X X X X X X Extracts X X X X ..... owned by GPSSB while the physical inputs belong to the appellant; * that it constitutes composite supply of goods & services; that supply of printing is principal supply & would be classified under SAC 9989; * that it would not fall within Sr. No. 3 of the notification No. 12/2017-CT (R) as the said serial number pertains to 'pure service'; * that as far as Sr. No. 3A is concerned, the appellant has not provided details of value of the goods which constitute the supply; * that GPSSB does not fall within the ambit of local authority as defined under 2 (69) of the CGST Act, 2017; that GPSSB is neither Central Government or State Government; * that in view of the foregoing, the appellant would not fall within the ambit of Sr. No. 3A of the notification, ibid. Gujarat Public Service Commission (GPSC) * the appellants service to GPSC is pure service; * that GPSC though a constitutional body does not qualify as Government/State Government; that the services provided are also not services by way of any activity in relation to any function entrusted to a Panchayat under Article 243G or function entrusted to Municipality under article 243 W of the Constitution of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost of paper is below 25% [ie Rs. 6.05/Rs. 40.95; that the composite service provided is eligible for exemption under entry 3A of the exemption notification. 8. Personal hearing in the matter was held on 08.11.2024, wherein Shri Bhupesh Maretha, Advocate, Shri Jeevan Vasave, Advocate and Shri Mukesh M Shah, Director of the appellant, appeared on behalf of the appellant and reiterated the grounds of appeal. 9. We have carefully gone through and considered the appeal papers, written submissions filed by the appellant, submissions made at the time of personal hearing, the impugned ruling and other materials available on record. 10. Before dwelling on to the issue, we would like to reproduce relevant portions of circular/clarification & the exemption notification for ease of reference viz, Notification No. 12/2017-CT (Rate) dated 28.6.2017 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 11 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 exempts the intra-State supply of services of descript ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cription of Services", the words "or a Governmental authority or a Government Entity" shall be omitted; 11. As is evident, in terms of the serial no. 3 of notification No. 12/2017-CT (R), as amended, pure services [excluding works contract services or other composite services involving supply of any goods], provided to a Central Government, State Government, Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243W of the Constitution of India, is exempt. Likewise, in terms of serial no. 3A of notification ibid, composite supply of goods and services, in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G or to a Municipality under article 243 W of the Constitution are exempt. 12. While dealing with an exemption notification, we are mindful of the fact that an exemption notification is to be strictly interpreted in terms of the judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Panchayat, as defined under Article 243 (d) of the Constitution of India, states as under: (d) "Panchayat" means an institution (by whatever name called) of self-government constituted under article 243B, for the rural areas; 17. The appellant has relied on the definition of 'local authority' u/s 3 (31) of the General Clauses Act, and further stated that the GPSSB has been established in terms of section 235 of the Gujarat Panchayat Act, 1993; that a conjoint reading of sections 74, 227(5), 235(6 & 7), 274, ibid, reveals that GPSSB is an integral part of Panchayat system & therefore a 'local authority' and hence is eligible for the benefit of sr. no. 3 & 3A of the notification, ibid. 18. Since, the services rendered to GPSSB are composite services, what needs to be examined is whether the appellant is eligible for Sr. No. 3A of the notification, ibid. For being eligible for Sr. No. 3A of the notification, the appellant has to satisfy the following viz * that there has to be a composite supply of goods & services; * that the value of supply of goods constitutes not more than 25% of the value of the composite supply; * that the services are provided to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Clauses Act, 1897, the term stands defined, viz (60) "State Government", (a) as respects anything done before the commencement of the Constitution, shall mean, in a Part A State. the Provincial Government of the corresponding Province, in a Part B State, the authority or person authorised at the relevant date to exercise executive government in the corresponding Acceding State, and in a Part C State, the Central Government; (b) as respects anything done [after the commencement of the Constitution and before the commencement of the Constitution (Seventh Amendment) Act, 1956], shall mean, in a Part A State, the Governor, in a Part B State, the Rajpramukh, and in a Part C State, the Central Government; [(c) as respects anything done or to be done after the commencement of the Constitution (Seventh Amendment) Act, 1956, shall mean, in a State, the Governor, and in a Union territory, the Central Government; and shall, in relation to functions entrusted under article 258A of the Constitution to the Government of India, include the Central Government acting within the scope of the authority given to it under that article]; After having gone through the definition supra, ..... 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