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2019 (2) TMI 186 - AAR - GSTPure service - Providing Inspection services in relation to Water Supply and Sewerage - Government authority - Benefit of SI.No. 3 of Notification No. 12/201 /-CT (Rate) dated 28th June 2017 - applicant providing Third Party Inspection Services to their clients viz., M/s. Chennai Metro Water Supply and Sewerage Board (CMWSSB) and M/s. Tamil Nadu Water Supply and Drainage Board (TWAD) for the water related projects - Notification is effective from 01/07/2017 - pure services - taxability of Invoices already raised on the client prior to 01/07/2017. Held that:- If any “Pure Services” are provided to a Governmental Authority by way of any activity in relation to any function entrusted to a Municipality under Article 243 W or a Panchayat under Article 243 G (from 13.102017) of the Constitution and that 'Governmental Authority' is an Authority or a Board set up by an Act of Parliament or a State legislature or established by the Government with 90 percent or more participation by way of equity or control to carry out any function entrusted to a Municipality under article 243 W of the Constitution, then the same is exempted vide SI.No. 3 of the Notification No. 12/2017 Central Tax (Rate) dated 28th June 2017. In the case at hand, M/s. CMWSSB is created vide The Chennai Metropolitan Water Supply and Sewerage Act, 1978 (Tamil Nadu Act 28 of 1978) with 100% contribution by way of Government (i.e. by way of takeover of Assets and Liabilities from Chennai Municipal Corporation and Tamil Nadu Water Supply and Drainage Board) and controlled by the Government by way of appointing Directors of the CMWSS Board, to carry out the functions of supplying water for Domestic, Industrial and Commercial purposes as well as Sanitation Conservancy by way of disposal of Sewerage. M/s. TWAD Board is a Board, constituted by an Act of Tamil Nadu State Legislature called Tamil Nadu Water Supply and Drainage Board Act, 1970 with 100% contribution by way of Government and controlled by Government by way of appointing Directors of the TWAD Board entrusted with the development of Water Supply and Sewerage facilities in Municipalities and Panchayats in the State of Tamil Nadu, except Chennai Metropolitan Development. Thus, in respect of services received in relation to functions pertaining to Municipality, M/s. CMWSSB and M/s.TWAD is a 'Governmental Authority' as defined under 2(zf) of the Notification No. 12/2017-CT (Rate) as amended. However, in respect of Services received in relation to functions pertaining to Panchayat, TWAD is a 'Governmental Authority' only from 13.10.2017 as defined under 2(zf) of the Notification No. 12/2017-CT (Rate) as amended. In the two agreements furnished by the Applicant, the Applicant is suppling 'Pure Services' of Inspection to M/s. TWAD and M/s. CMWSSB which is a 'Governmental Authority” relating to Water Supply and Sewerage which are covered under Twelfth Schedule of Article 243 W of the Constitution. Therefore, the services rendered by the Applicant are exempted from CGST under SI.No. 3 of the Notification No. 12/2017-CT (Rate) dated 28th June 2017 as amended and exempted from SGST under SI.No. 3 of the G.O. (Ms) No. 73 dated 29.06.2017 No.II (2)/CTR/532(d-15)/2017 as amended. Other question raised before us is regarding raising of credit notes is of procedural nature and therefore not answered.
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