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2023 (5) TMI 285 - AUTHORITY FOR ADVANCE RULING, GUJARATClassification of services - pure services or not - Architectural Consultancy Service provided by the applicant to Surat Municipal Corporation for construction of SMIMER Hospital & College Campus - exemption under entry no. 3 of notification No. 12/2017-Central (Rate) dated 28.6.2017 - HELD THAT:- supply goods along with services in the form of providing of various physical models of the medical college block, hospital block and residential campus; that various samples of the hardware materials, sanitary items, electrical items, various knobs, handles and all sample of ELV system, all are required to be supplied in the form of samples; that they also supply series of drawings in form of hard copy (print outs) and multiple tender books/documents The supply of drawings, samples, physical models etc can by no stretch of imagination be termed as supply of goods. Thus, the service rendered by the applicant is a ‘pure service’ not involving any supply of goods. The pure services [excluding works contract service or other composite supplies involving supply of any goods] provided to the local authority [i.e. in this case to the SMC] by way of any activity in relation to a function entrusted to a Municipality under article 243 W of the Constitution of India is exempt from GST. Having said so the supply by the applicant to SMC being a pure service meets the criterion set out vide Sr. No. 3 of notification No. 12/2017-CT(Rate), dated 28.6.2017, and hence, the supply is exempt from GST. Exemption in relation to Pure Service - ‘pure services’ provided by a sub contractor of the applicant. - HELD THAT:- We find that [a] the applicant before us is seeking a ruling on behalf of his sub-contractor and is hence is not the supplier of the service in the case wherein the supply is provided by the sub-contractor and [b] that the ruling sought by the applicant is not for admissibility of input tax credit in respect of supply received by the applicant from his sub-contractor. This being the factual matrix, we find that the applicant before us has no locus standi in seeking a ruling in the facts of the present case. In view of the foregoing, we refuse to answer this portion of the second question. Supply of pure services as a Sub-contractor to another contractor of the SMC - whether he as a sub-contractor can avail the exemption provided the exemption is available to the direct contractor of SMC? - HELD THAT:- The Apex Court in Dilip Kumar and Company, [2018 (7) TMI 1826 - SUPREME COURT], has already held that exemption notifications are to be interpreted strictly & the burden of proving applicability would be on the assessee to show that his case comes within the ambit of the conditions specified in the exemption notification. In the preceding paragraphs, while examining the applicability of the GST on the supply by the applicant we have already held that 3 conditions need to be satisfied - The fact that in the hypothetical situation of the applicant being a sub- contractor when he has provided the services/supply to the main contractor and not to the Central Government, State Government or Union Territory or Local authority or a Governmental authority or a Governmental entity directly would clearly take him out from the ambit of exemption provided vide Sr. No. 3 of the notification No. 12/2017-CT(Rate). The main contractor if exempt would not lead automatically to a sub-contractor providing service to the main contractor being exempt as has been held by the AAR in the case of M V Infra Services P Ltd [2020 (3) TMI 70 - AUTHORITY FOR ADVANCE RULING, KARNATAKA] If the entry number 3 of the notification No. 12/2017-Central (Rate) dated 28.6.2017 is not applicable to the applicant then accordingly the services provided by the applicant will be taxed under which HSN/SAC code and the rate of tax thereof? - HELD THAT:- Since it is already held that the supply made by the applicant would fall within the ambit of Sr. No. 3 of notification No. 12/2017-CT(Rate), this question becomes infructuous.
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