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2021 (4) TMI 560 - AAR - GSTGovernmental Authority or not - National Institute of Design, Paldi, Ahmedabad (NID) - liability to pay GST on procurement of services under reverse charge mechanism - Security services received from any person other than body corporate as per N/N.13/2017 – Central Tax (Rate) - Access to e-books/e-database from service provider located outside India as import of service as per N/N.10/2017 – IGST (Rate) - requirement to be registered as a tax deductor under GST as per the provision of Section 24 of the CGST Act. Whether NID would qualify as ‘governmental authority’ as defined under the Integrated Goods and Services Tax Act, 2017? - HELD THAT:- For the applicant to fall under the definition of ‘Governmental Authority’, the following 3 conditions will be required to be satisfied: (1) It has to be set up by an Act of Parliament or a State Legislature or has to be established by any Government; (2) The Government should have 90 per cent or more participation by way of equity or control and (3) It should be established for carrying out any function entrusted to a municipality under Article 243W of the Constitution or to a Panchayat under Article 243G of the Constitution. Since the applicant has fulfilled the conditions of being formed by an Act of Parliament and being established to carry out the function entrusted to a municipality under Article 243W of the Constitution and to a Panchayat under Article 243G of the Constitution, it is concluded that the applicant will fall under the definition of Governmental Authority if it also fulfils the condition namely ‘ ninety percent or more participation of Government by way of equity or control.’ Whether NID is liable to pay GST on procurement of (a)security services received from any person other than body corporate as per Notification No.13/2017-central Tax Rate (b)access to e-books/e-database from service provider located outside India as import of service as per Notification No.10/2017-IGST(Rate) under reverse charge mechanism, in view of the exemption granted in Sr.No.3 of Notification No.12/2017-Central Tax(Rate) or Sr.No.3 of Notification No.09/2017-IGST(Rate)? - HELD THAT:- Sr.No.3 of aforementioned Notifications No.12/2017-Central Tax(Rate) dated 28.06.2017 and Notification No.09/2017-IGST(Rate) dated 28.06.2017 exempts Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental Authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. In the present case, in view of non-submission of copies of agreement or contract with regard to the services received/to be received by the applicant, it would not be possible to give a decision in the matter. Whether NID is required to be registered as a tax deductor under GST as per the provision of Section 24 of the CGST Act? - HELD THAT:- NID has been formed by an Act of Parliament of the Government of India i.e. the NID Act. However, they have not given any proof with regard to ‘fifty-one percent, or more participation of Government by way of equity or control, to carry out any function’. Hence, it is found that since it has been established that NID has been formed by an Act of Parliament, the applicant will have to be registered as a tax deductor under the provisions of Section 24 of the CGST Act read with Section 51 of the Act, if, and only if, they fulfil the condition of ‘fifty-one percent, or more participation of Government by way of equity or control, to carry out any function’. It is therefore concluded that the applicant will have to be registered as a tax deductor under the provisions of Section 24 of the CGST Act read with Section 51 of the Act, if they fulfil the condition of ‘fifty-one percent, or more participation of Government by way of equity or control, to carry out any function’.
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