TMI Blog2019 (10) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding services for the work of Operating Citizen Facilitation Centres / Collection Centres at various Locations of MCGM. Thus, their supply is of services only and are in the nature of pure services. However we agree to their submission that their role starts only after MCGM has provided services to citizens for which periodical bills/invoices are issued by MCGM. The role of the applicant starts only after the supply of goods/services are rendered by MCGM and hence it cannot be said that they are rendering service by way of any activity in relation to any function entrusted to a Municipality under article 243 W of the Constitution. Applicability of Sr.No. 3A of the Notification to their activity - HELD THAT:- Since we have found that the supply in the subject case is in the nature of pure services, in such a case provisions of Sr. No. 3A will not be applicable. - GST-ARA-16/2019-20/B-109 - - - Dated:- 4-10-2019 - SHRI B. TIMOTHY, AND SHRI A.A. CHAHURE, MEMBER PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of any goods or services or both. e) Determination of the liability to pay tax on any goods or services or both. Brief description of activity for which advance ruling is sought: Municipal Corporation of Greater Mumbai (MCGM), Mumbai has awarded contract to VFS Global Services Private Limited for Operating Citizen Facilitation Centres (CFCs) at various locations of MCGM ward premises in Mumbai. Under the contract, the consideration is payable on per transaction / receipt basis. The advance ruling is sought for the applicability of GST on the services provided by VFS Global to MCGM under the contract. Statement of Facts: 1 MCGM has awarded the work of Operating Citizen Facilitation Centre (CFC) at various Locations of MCGM on per transaction basis to M/s. VFS Global Services Pvt. Ltd. 2. There are approx. 213 services provided by MCGM to Citizen which is distinct from services to services such as water, property tax etc., whereas the services provided by VFS Global to MCGM is not distinct for all 213 services and the same is provided in clause 2 of annexure 2 of RFP. 3. VFS Global accepts only cash from Cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in column (3), the following was substituted: 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 I(or a Government Entity] by way of any activity in relation to any function entrusted to a Panchayat under article 243 G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution... (GST is exempted on above Services) As per amended Notification No. 12/2017- Central (Rate) as on 31st Dec, 2018, serial number 3A, in column (3), the following was substituted: Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the matters listed in the Twelfth Schedule... The Twelfth Schedule for Article 243W of the Constitution (Seventy-Fourth Amendment) Act, 1992 are as follows; 1. Urban planning including town planning. 2. Planning of land- use and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic, industrial and commercial purposes. 6. Public health, sanitation conservancy and solid waste management. 7. Fire services. 8. Urban forestry, protection of the environment and promotion of ecological aspects. 9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. 10. Slum improvement and upgradation. 11. Urban poverty alleviation. 12. Provision of urban amenities and facilities such as parks, gardens, playgrounds. 13. Promotion of cultural, educational and aesthetic aspects. 14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums. 15. Cattle pounds; p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices under Section 660 of the Finance Act, 2012. Reverse Charge Notification No-30-2012. Hence, VFS Global was charging Service Tax @ 12.36% as per Section 66B of Finance Act, 2012 on aforesaid Service to Government under pre GST Period. 3. Without Prejudice to above, the exemption under serial number 3, in column (3) of notification No. 12/2017- Central Tax (Rate), referred to Pure Services and scope of pure services illustrated by CBEC as under Question 25: What is the scope of pure services mentioned in the exemption notification No. 2/2017-Centra1 Tax (Rate), dated 28.06.2017? Answer : In the context of the language used in the notification, supply of services without involving any supply of goods would be treated as supply of pure services . For example, supply of man power for cleanliness of roads, public places, architect services, consulting engineer services, advisory services, and like services provided by business entities not involving any supply of goods would be treated as supply of pure services. On the other hand, let us take the example of a governmental authority awarding the work of maintena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication process, Identity Management and other citizen services for its client governments, enabling them to focus entirely on the critical task of assessment. VFS Global, a pioneer of the industry, offers innovative solutions such as Doorstep Citizen Services, Citizen Facilitation Centres and Identity management services. MCGM, Mumbai has awarded contract to VFS Global Services Private Limited for Operating Citizen Facilitation Centres (CFCs) at various locations of MCGM ward premises in Mumbai. Under the contract, the consideration is payable on per transaction receipt basis. The advance ruling is sought for the applicability of GST on the services provided by applicant VFS Global to MCGM under the contract entered into with MCGM dt. It is further seen from his written contention and documents submitted before us is that: 1. MCGM has awarded the work of Operating Citizen Facilitation Centre (CFC) at various Locations of MCGM on per transaction basis to M/s. VFS Global Services Pvt. Ltd. 2. There are approx. 213 services provided by MCGM to Citizen which is distinct from services to services such as water, property tax etc., whereas the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. The contention of applicant is that these activity is to be covered or not in above is required to be examine. Therefore for the sake clarity, the relevant said Notification No. 12/2017- Central (Rate) as on 31st Dec, 2018, serial number 3, in column (3), is reproduced as below : 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 243 W of the Constitution.. And Notification No. 12/2017- Central (Rate) as on 31 st Dec, 2018, serial number 3A, in column (3), is reproduced as below : Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er houses and tanneries. 5) As per perusal of the above function mentioned in the article 243 W on the basis of inputs, and written contention of the applicant, MCGM issues periodical bills to the Citizens for the services provided to citizens and citizens walk in to CFCs for payment of the bills issued by MCGM for the services availed by them. It can be seen that VFS Global s role is start only once the invoices issued by MCGM to Citizens (i.e. Services performed by MCGM is completed and amount to be received from the Citizens). Considering the activity of the applicant mentioned in the application is different than the functions mentioned in 243 W. It is fact that services provided by the MCGM is a services which are covered under 243 W. So that their services are covered under the services of pure services. And the said entry is applicable to the MCGM Only. Therefore considering the scope of work, applicants activity is post supply of services by the MCGM. It is pure but is not covered under 243W.Therefore I find that applicant s activity is not covered under the scope of functions entrusted for municipality and entry no, 3 of Notification No. 12/2017 of CT (rate) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices listed under Article 243W of the Constitution, no specific services are provided by the applicant in relation to services listed under Article 243 W on Indian Constitution Act. The applicant has also submitted that they accept Cash from Citizens in the premises of Collection Centers provided by MCGM, acknowledge the same through MCGM receipts, daily Cash collection is deposited in MCGM bank account, and the applicant neither visits any site / location for services performed by MCGM nor do they conduct any survey or prepare any report in respect of services provided by MCGM. For performing such services the applicant has to use its own manpower, all types of Consumables, such as, Computers, Printers, House Keeping Materials, etc. other than Blank Receipts The applicant has further submitted that, under instructions from MCGM, transactions receipt issued towards collection of Water and Property Tax from Citizens is exempt under Twelfth Schedule for Article 243 W of the Indian Constitution (Seventy-Fourth Amendment) Act, 1992, they are charging GST for all transactions / receipt issued to Citizens except for transactions/receipt issued towards Collection of W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by MCGM. The role of the applicant starts only after the supply of goods/services are rendered by MCGM and hence it cannot be said that they are rendering service by way of any activity in relation to any function entrusted to a Municipality under article 243 W of the Constitution. The second part of their questions is with respect to the applicability of Sr.No. 3A of the abovementioned Notification to their activity. Since we have found that the supply in the subject case is in the nature of pure services, in such a case provisions of Sr. No. 3A will not be applicable. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-16/2019-20/B-109 Mumbai, dt. 04.10.2019 For reasons as discussed in the body of the order, the questions are answered thus - Question: - Whether the work for Operating Citizen Facilitation Centre (CFC) at various Locations of MCGM on per transaction/ receipt basis involving the aforesaid Scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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