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2019 (6) TMI 1342 - AAR - GSTTaxability - contract for sectioning of Sunamuhin Drainage Channel (From Narsinghapatna Bridge to Brahmadeva Resort) and from pond near Harachandi mouth to outfall of Chilika in Orissa - Government Entity - clause 2 (zfa) of N/N. 9/2017 Integrated Tax (Rate) dated 28/06/2017 - applicability of Sl 3A vide Notification No. 2/2018-Integrated Tax (Rate) dated 25/01/2018 - whether the supply being made is a composite supply, where supply of goods constitutes not more than 25% of the value of the composite supply? - whether the recipient is government, local authority, governmental authority or a government entity? - whether the supply is in relation to any function entrusted to a Panchayat or a Municipality under the Constitution? HELD THAT:- The functions of a Panchayat under the Constitution needs to be discussed. Article 243G of the Constitution discusses the powers, authority and responsibilities of Panchayats. It states, “Subject to the provisions of this Constitution the Legislature of a State may, by law, endow the Panchayats with such powers and authority as may be necessary to enable them to function as institutions of self-government..subject to such conditions as may be specified therein, with respect to..the implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule,”. It appears from the description of the work that it improves the navigability of the riverbed and channels - an activity toward development of irrigation and waterways. It is, therefore, an activity in relation to the function listed under Sl No. 5 of the Eleventh Schedule, as entrusted to a Panchayat under Article 243G of the Constitution of India. Exemption under Sl No. 3A of the Exemption Notification is, therefore, applicable to the Applicant’s supply of the above works contract service.
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