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2019 (10) TMI 1139 - AUTHORITY FOR ADVANCE RULING, WEST BENGALClassification of supply - pure service or a composite supply? - supply of goods does not exceed more than 25% of the value of the supply - the recipient is government, local authority, governmental authority or a government entity - whether the supply is being made in relation to any function entrusted to a panchayat or a municipality under the Constitution? - deduction of TDS - HELD THAT:- The consideration to be paid measures the work only in terms of the quantity of the garbage lifted and removed. Based on the above 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. Sl 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 Sl No. 6 of the Twelfth Schedule - Applicant’s service to HMC, therefore, is exempt under Sl No. 3 of the Exemption Notification. The TDS Notifications bring into force section 51 of the GST Act, specifying 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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