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2021 (1) TMI 435 - AAR - GSTClassification of services - consultancy services - pure services or not - Scope of the terms used in the contract / agreement - service receiver i.e. Surat Municipal Corporation, Ahmedabad Urban Development Authority, Pune Municipal Corporation, Executive Engineer, Public Works Division, Pune and Rajkot Smart City Development ltd. - ‘Central Government’ or ‘State Government’ or ‘Union Territory’ or ‘Local Authority’ or a ‘Governmental Authority’ or a ‘Government Entity’? - relation to any function entrusted to a Municipality under Article 243W of the Constitution of India, read with twelfth schedule or not. Whether the technical/consultancy services provided by the applicant to various entities such as Surat Municipal Corporation, Ahmedabad Urban Development Authority, Pune Municipal Corporation, Rajkot Smart City Development ltd., Executive Engineer, Public Works(East) Division, Pune, State of Maharashtra and Gujarat Technical University as per the various agreements is exempted under Entry No.3 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 or otherwise? HELD THAT:- looking to the terminology and words used in the said clauses of the contract / agreement, it is very difficult to conclude that it pertains purely to services only. In fact, on going through the same, we get the impression that this does not appear to be a supply of pure service only but also includes supply of goods along with supply of services. Further, as reported by the concerned officer and as per the GST portal, the applicant supplies Works Contract Service also besides supplying design and consultancy services and few other services and looking to the aforementioned facts, it appears that Works Contract Service may also be involved in the said contract. If a person provides only service to any person without involvement of supply of goods along with supply of services, then the same would be termed as supply of pure service - the Financial offer as per the contract/agreement includes the GST amount and that GST is to be paid to the Government as per the terms and conditions of the Contract/Agreement. This, itself, proves that the applicant is not eligible for the benefit of the provisions of Entry No.3 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 under which the rate of GST is NIL. In view of the above facts, it is concluded that the aforementioned services supplied by the applicant to Surat Municipal Corporation are not Pure services. Since the applicant has failed to satisfy the very first condition in order to be eligible for the exemption, there is no need to discuss other conditions at all. Regarding services provided by them to Ahmedabad Urban Development Authority - HELD that:- An agreement has materialised between the applicant and AUDA in respect to the above work which has not been submitted by the applicant even though this fact was brought to the notice of his representative during the course of personal hearing. In absence of the agreement/contract and without going through the terms and conditions of the contract, it would not be possible for us to analyse as to whether the services provided by the applicant are pure or otherwise since this involves the construction of a Town Hall and only after going through the agreement can it be confirmed whether the services supplied by the applicant are pure services or are services supplied along with supply of goods. It also appears that the applicant has deliberately not provided the copy of agreement for reasons best known to him - the services provided by the applicant to Ahmedabad Urban Development Authority are not Pure services. Since the applicant has failed to satisfy the very first condition in order to be eligible for the exemption, there is no need to discuss other conditions at all. Further, analyzing of various other services being supplied under different contracts / agreement it is found that none is eligible for exemption from GSt. The exemption under Entry No.3 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 is not available to the applicant in any of the aforementioned agreements/contracts entered into, by them.
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