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2022 (1) TMI 747 - AAR - GSTLevy of GST - claim of expenses incurred to handle the Cost Free Distribution Sarees & Dhothies and Cost Free School Uniform Scheme - pure services or not - supply to Revenue Department/Social Welfare Department - taxable at 18% GST or not - functions entrusted to a Panchayat under Article 243G/ municipality under Article 243W of the constitution of India - whether the Handling Charges related to Pre-GST period 2015-16 and 2016-17 will also attract GST or not? - HELD THAT:- In the case at hand, it is seen that the applicant is entrusted with the work of undertaking quality check of the clothes, procurement, storage of the goods in warehouses and transport the uniforms/ sarees and dhothies for distribution to the designates places. For undertaking all these activities, they are paid 'Handling charges' as fixed by the Committee set up by the State Government. It is opined by the State Jurisdictional Officer, that the activities undertaken are 'Composite supply' and is not 'Pure service', therefore the applicant is not eligible for the benefit of the exemption at SI.No. 3 above. 'Pure Service' is not per-se defined under GST, the same can be constituted in general term as any supply which is either deemed as service under schedule II of CGST Act or which are not covered under the definition of Goods shall be categorized as pure services - the activity of supply of various services under the gamut of 'Handling' by the applicant without any involvement of goods either as supply or consumed while undertaking such services are 'Pure Services' even if the supply is a composite supply of such services. It is also seen that the supply is made to the Departments of Tamilnadu, therefore, supply is made to the State Government. Whether the said activity is undertaken by the applicant 'in relation to' any function entrusted to a Panchayat under article 243G of the Constitution or Municipality under article 243W of the Constitution? - HELD THAT:- In the case at hand, the activities of the applicant, i.e., handling of Dhoties and Sarees/ School Uniforms from Co-Operative societies to public distribution system/ Revenue Department are definitely 'in relation to' the functions entrusted to a Panchayat under Article 243G/ municipality under Article 243W of the constitution of India - the activities of 'Handling' carried out by the applicant in respect of Free distribution of Sarees and Dhothies and the School Uniform to the students of class 1 to 8 under 'Noon Meal Scheme' are activities in relation to the functions entrusted to Panchayats/Municipality in the Article 243 G/243W and the applicant supplies these services to the State Government and therefore, the exemption at SI.No.3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as amended is available to the applicant.
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