Home Case Index All Cases GST GST + AAR GST - 2022 (2) TMI AAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 1042 - AAR - GSTProject Management Consultancy services provided to Rajasthan Urban Drinking Water Sewerage and Infrastructure Corporation (RUDSICO) under Rajasthan Secondary Towns Development Sector Project - Invoice is raised by the Applicant to the Leading Member, who further raise invoice to RUDSICO of complete amount - pure services or not - exemption under SI. No. 3, (Chapter 99) of Table mentioned in Notification No. 12/2017 - Central Tax (Rate) Dated 28/06/2017 - Governmental Authority or not - HELD THAT:- The services provided by the Applicant to RUDSICO is Project Management & Consultancy Services is in relation to Rajasthan Sector Towns Development Sector Project (RSTDSP) for rehabilitation and expansion of water supply network, rehabilitation and expansion of sewerage network, modernization and construction of new water supply and wastewater treatment plants which is listed in Twelfth Schedule to Article 243 W of the Constitution - the PMC services provided by the Applicant to RUDSICO is a 'Pure Service' eligible for exemption under Notification no. 12/2017-Central Tax (rate) dated 28.06.2017. irrespective of the way of raising Invoice as stated in the Joint Venture Agreement." Whether the applicant is eligible for exemption under notification 12/2017central tax rate dated 28.06.2017 or otherwise? - HELD THAT:- It is seen that the following three conditions are to be fulfilled to be eligible for taking the benefit of the exemption from GST under the above notification:- (i) Pure services are to be provided. (ii) Such services provided should be by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India; and (iii) Service recipient should either be Central Government or State Government or Union territory or Local authority or Governmental authority. In the present case, as regard the first condition to be discussed is as to what is meant by pure service? Since 'pure service' has not been defined under GST. the same can be construed in general terms as any supply, which is either deemed as services under Schedule II of CGST Act or which are not covered under the definition of goods shall be categorized as pure services. It is seen that the services provided are of only consultancy services. The applicant has also declared that PMC services provided by them has no component of supply of goods. Since there is no involvement of supply of goods in the services, the services would be termed as 'pure services'. Hence, the first condition is fulfilled. As regard the second condition, the project will include O&M embedded construction contracts combining design, construction and O&M for water supply and waste water contracts for a period of 10 years. This will support the municipalities O&M responsibility and improve the quality of service delivery by providing continuity in system operation as well as O&M. In view of the above, we conclude that the supply of Consultancy services by the applicant are in relation to function of town planning and water supply. As regard the third condition, as per the master data submitted by the applicant, we find that the total authorized capital is ₹ 50 crores and the paid up capital is ₹ 48.67 crore.It is further found that total paid up capital, wherein, only ₹ 41 crore holding with Government of Rajasthan through H.E. governor of Rajasthan, which is less than 90%, as per the definition given under Notification no. 11/2017-Central tax (rate) and Notification no. 12/2017- Central tax (rate) dated 28th June 2017 as stated above, the recipient of the service viz. Rajasthan Urban Drinking Water Sewerage & Infrastructure Corporation Limited (RUDSICO) is not a Governmental authority. Therefore, they are not eligible for exemption under notification no. 12/2017 central tax (Rate) dated 28.06.2017.
|