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2022 (4) TMI 630 - AAAR - GSTExemption from GST or not - renting out of immovable properties to the Social Welfare Department of Maharashtra Govt, for residential accommodation of girls from the backward class/Scheduled Tribes - whether service in relation to any function entrusted upon the panchayat under Article 243G of the Constitution or any function entrusted upon the municipality under Article 243 W of the Constitution, or not - applicability of TDS provisions - applicability of TDS notification issued under section 51 would be applicable for deduction of TDS, as appellant is not registered under GST - refund of TDS - HELD THAT:- On perusal of the Article 243G and 243 W of the Indian Constitution along with the eleventh and twelfth Schedule to the Constitution, it is seen that panchayats and municipalities have been entrusted with the responsibilities of planning and implementation of the various schemes for ensuring social justice and development of the weaker section of the society, which clearly includes the girls and women from the backward class/Scheduled Tribes. Thus, any welfare measure undertaken by the panchayats and municipalities for the social development of the gills belonging to the backward classes/Scheduled Tribes, including the residential accommodation of the girls or women, will definitely come under the ambit of the responsibilities/functions entrusted to panchayats and municipalities. It can be safely interpreted that entry at SI. No. 3 of the Exemption Notification No. 12/2017/C.T. (Rate) dated 28.06.2017 has a very wide connotation and coverage. Since, it has been established that the activities related to residential accommodation of the girls or women, belonging to the Backward Class/Scheduled Tribes, will definitely come under the ambit of the responsibilities/functions entrusted to panchayats and municipalities, therefore, it can be safely concluded that in the instant case, pure services, i.e., renting out of immovable properties, provided by the Appellant to the State Government, will definitely be construed as an activity in relation to the function entrusted to a Panchayat under article 243G of the Constitution, or in relation to the function entrusted to a Municipality under article 243W of the Constitution, and thereby, are rightly eligible for exemption from GST in terms of the aforesaid exemption entry at SI. No. 3 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017. Once, it has been concluded that the impugned activity undertaken by the Appellant is eligible for exemption from GST, there is no point discussing the aggregate turnover of the Appellant which include the rental income received from Social Welfare Department, Govt, of Maharashtra as the issue before us was to determine whether the services provided to the Social Welfare Department, Government of Maharashtra for residential accommodation of underprivileged girls is exempt from GST and not the liability of the Appellant to take GST registration attributing to his annual aggregate turnover - Further, once the subject transaction has been held to be exempt from the levy of GST, there is no question of application of the TDS provisions made under Section 51 of the CGST Act, 2017. Thus, it is concluded that the impugned services of the renting out of immovable properties provided by the Appellant to the Social Justice Department of the Government of Maharashtra will be exempt from the levy of GST in terms of SI. No. 3 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017, and accordingly, the TDS provisions made under section 51 of the CGST Act, 2017, will not be applicable therein.
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