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2019 (6) TMI 486 - AAR - GSTClassification of supply of services - providing conservancy/solid waste management service to the Conservancy Department of the Howrah Municipal Corporation - pure services or composite supply - recipient of the service - whether government, local authority, governmental authority or a government entity - supply in relation to any function entrusted to a panchayat or a municipality under the Constitution or not? - Applicability of TDS notifications. HELD THAT:- The recipient is a municipal corporation, which is a local authority as defined under section 2(69) of the GST Act - The vehicles used and the fuel consumed and the machinery used do not result in any transfer of property in goods to HMC. The consideration to be paid measures the work only in terms of the quantity of the garbage lifted and removed. Based on the documents, it may, therefore, be concluded that the Applicant’s supply to HMC is a pure service. Article 243W of the Constitution that discusses the powers, authority and responsibilities of a Municipality, refers to the functions listed under the Twelfth Schedule as may be entrusted to the above authority. SI No. 6 of the Twelfth Schedule refers to public health, sanitation, conservancy and solid waste management. The Applicant’s supply to HMC is a function mentioned under SI No. 6 of the Twelfth Schedule - The Applicant’s service to HMC, therefore, is exempt under SI No. 3 of the Exemption Notification Applicability of TDS notifications - HELD THAT:- The TDS Notifications bring into force section 51 of the GST Act, specify the persons under section 51(1)(d) of the Act and have mandated and laid down the mechanism for deduction of TDS. These notifications, therefore, are applicable only if TDS is deductible on the Applicant’s supply under section 51 of the GST Act. Section 51(1) of the Act provides that the Government may mandate inter alia a local authority to deduct TDS while making payment to a supplier of taxable goods or services or both - As the Applicant is making an exempt supply to HMC the provisions of section 51 and, for that matter, the TDS Notifications do not apply to his supply.
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