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2023 (2) TMI 877 - APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKAClassification of supply - construction commissioning and maintenance of entire work for water supply projects/sewerage projects/facilities - applicable rate of tax - supplies made to a Governmental Authority - Government Entity eligible for concessional rate of 12% with effect from 1st January 2022, as per N/N. 15/2021 CT (Rate) dated 18-11-2021 read with Notification No 22/2021 CT (Rate) dated 31-12-2021 or not. HELD THAT:- The Municipal Committees, the Zilla Parishad and the District Boards, as mentioned in clause (c) of Section 2(69) of the CGST Act, represent the units of Local Self Government where people of a local area govern themselves through their elected representatives in respect of a large number of matters including construction of buildings, roads, parks, lighting of streets, sewerage, conservancy and water works etc. These Local Self Governments are constituted under statutory provisions which elaborately provide who, on being elected, become members of the Municipal Boards, the District Board or the Zilla Parishad These Boards are basically independents bodies with very little or minimal of Government control and that too in the limited field. They formulate their own policies and implement those policies through the machinery provided under law. They have power to levy Panchayat, municipal or other local taxes and have also the power to realise those taxes through coercive processes, if they are not paid immediately on demand - an authority in order to be a local authority must be of like nature and character as a Municipal Committee, Zilla Parishad or a District Board - BWSSB does not satisfy this principle of statutory interpretation in as much as BWSSB is not a wholly independent entity but is largely controlled by the State Government - thus, BWSSB is not a local authority. The Appellant has also taken pains to emphasise that BWSSB has been registered with the Income Tax Department and the GST Department as a 'local authority'; that when both the departments have acknowledged the status of BWSSB as a local authority and accordingly granted them a PAN and GSTIN, the lower Authority cannot take a u-turn and change the status of BWSSB to a Governmental Authority and not a local authority. This argument does not impress us much. GST Registrations are granted based on the information furnished by the applicant - BWSSB does not qualify as a 'local authority' as defined in Section 2(69) of the CGST Act. Thus, with effect from 1st January 2022, the Appellant is not eligible for concessional rate of tax of 12% in terms of entry Sl.No 3(iii) of Notification No 11/2017 CT (Rate) dated 28-06-2017 as amended by Notification No 15/2021-CT (Rate) dated 18-11-2021 on the supplies made to BWSSB - the order passed by the lower Authority with regard to the rate of applicable tax on the supplies of works contract service made by the Appellant to BWSSB with effect from 1st January 2022, is upheld.
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