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2021 (1) TMI 427 - AAR - GSTBenefit of the exemption for legal services - applicant is established with the objectives of developing the knowledge of science and technology, dental, medial, paramedical, physiotherapy, pharmacy, commerce, management, education and humanities for the advancement of mankind - Sl. No.45 of the Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017 - procurement of legal services - Exemption under S. No. 4 of Notification No.12/2017-Central Tax (Rate)? - Whether Nirma is required to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act? Whether Nirma would be eligible for claiming benefit of the exemption for legal services as provided in Sr. No.45 of the Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017, as amended from time to time in respect of procurement of legal services? - HELD THAT:- The applicant is a private university set up with the objectives of teaching, research and training at the university, by an Act passed by the Gujarat State Legislature, in which Government is having zero percent participation by way of equity or control. Being the similar issue raised by the applicant concerning the legal interpretation as clarified in Circular No. 76/50/2018-GST dated 31st December, 2018, we can state that the applicant does not fall under the “governmental authority”, as defined under Section2(16) of the IGST Act, 2017. We, therefore, conclude that the condition of ‘with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under Article 243W of the Constitution’ would apply to both authorities whether set up by an Act of Parliament or a State Legislature; or established by any Government - thus, the applicant would not be eligible for claiming benefit of the exemption as provided in Sr. No.45 of the Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017, as amended from time to time, in respect of procurement of legal services (as a recipient). Whether services provided by Nirma are exempted under S. No. 4 of Notification No.12/2017-Central Tax (Rate)? - HELD THAT:- This entry exempts services by Central Government, State Government, Union Territory, local authority or governmental authority by way of any activity in relation to any function entrusted to a municipality under Article 243W of the Constitution. As already held in foregoing para, the applicant is not a Central Government, State Government, Union Territory, Local Authority or Governmental Authority. Further, we find that higher education is nowhere specified as an activity in relation to any function entrusted to a municipality under Article 243W of the Constitution - the higher education services provided by the applicant would not qualify for exemption provided under S. No. 4 of the exemption Notification No.12/2017-Central Tax (Rate) dated 28.06.2017. Whether Nirma is required to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act? - HELD THAT:- The applicant entity was formed as a private university set up by the Nirma University Act passed by the Gujarat State Legislature, in which Government is having zero percent participation by way of equity or control - Further, admittedly, the applicant does not fall under (i) a department or establishment of Central Govt. or State Govt., or (ii) a local authority; or(iii) Govt. Agencies, or other specified persons viz. (iv) Society established by the Central Government or the State Government or a Local Authority under the Societies Registration Act, 1860 (21 of 1860); or (v) public sector undertakings (PSUs). The CBEC vide aforesaid Circular clarified that the provisions of Section 51 of the CGST Act, are applicable to only such authority or board or any other body whether set up by an Act of Parliament or a State Legislature or established by any Government in which fifty one percent or more participation by way of equity or control, is with the Government. It is fact on record that the Nirma University is set up by the Nirma University Act passed by the Gujarat State Legislature, in which Government is having zero percent participation by way of equity or control. Hence, the applicant does not fall under this category of specified person for the purpose of Section 51 of the CGST Act, 2017 - the applicant is not liable to register themselves as a Deductor under GST.
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