TMI Blog2018 (5) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... mended by Notification No. 2/2018 - Integrated Tax (Rate) dated 25.01.2018 and parallel CGST and SGST notifications. Whether the service receiver i.e. Northern Railways is covered in 'Central Government' or 'State Government' or 'Union Territory' or 'Local Authority' or a 'Governmental Authority' or a 'Government Entity' or not? - Held that: - as per Section 3(8) of the General Clauses Act, 1897, the 'Central Government' means the President. Therefore, the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of President are also covered in 'Central Government'. It is observed that contracts by Northern Railway to the applicant have been awarded in the name of the President of India - Hence, it is held that Northern Railway is covered in the said Notification as 'Central Government'. Whether the cleaning services rendered by the applicant are in relation to any function entrusted to a Municipality under Article 243W of the Constitution? - Held that: - The Railways cannot be called a Municipality under Articles 243P and 243Q of the Constitution of India. Further, the functions of Railways i.e. transport of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleaning, Circulating area cleaning etc. (b) Mechanized cleaning of sheds Shed floor, pits, urinals, desilting of manholes, underground drains and open drains, disposal of Industrial waste to Dumping ground, Loading of Ferrous Scrap, Cutting of grass and shrubs and removal of cobwebs etc. (c) Providing On-Board Housekeeping Services in Trains Cleaning of toilets, compartments, seats etc. (d) Railway Building Office cleaning. Cleaning and upkeep of Office Chambers, rooms, cabins, corridors, Halls, roofing, circulating areas, toilets, metalled road and lawns etc. (e) Mechanized Cleaning of Trains Coaches of Trains, and Housekeeping of depot premises etc. (f) Comprehensive Mechanized cleaning of railway colonies. Cleaning of road and desilting of surface drains, manhole, gully trap and latrine system of various size and depth and maintenance of the same in the running condition of colony area, and removal of accumulated garbage silt muck etc. to the nominated railway dustbin. (g) Removal and disposal Garbage etc. from railway colonies. Conservancy contract for daily removal of solid waste/ rubbish/ refuse / hedge cuttings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gement. (g) Fire services (h) Urban forestry, protection of the environment and promotion of ecological aspects. (i) Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. (j) Slum improvement and upgradation. (k) Urban poverty alleviation. (l) Provision of urban amenities and facilities such as parks, gardens, playgrounds. (m) Promotion of cultural, educational and aesthetic aspects. (n) Burials and burial grounds; cremations, cremation grounds; and electric crematoriums. (o) Cattle pounds, prevention of cruelty to animals. (p) Vital statistics including registration of births and deaths. (q) Public amenities including street lighting, parking lots, bus stops and public conveniences. (r) Regulation of slaughter houses and tanneries. Details of Question(s) on which Advance Ruling is requested: 8. Whether the contract for Railway station sanitation and / or cleaning, Train cleaning Railway Premises cleaning involving: (a) Mechanized/ Comprehensive cleaning at Railway Stations. Station Building Cleaning, Platform Cleaning, Track Cleaning, Office Wait ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moval of cobwebs. So the same shall be classified under the levies and GST @ NIL taxable. 10. Further, as per the FAQ of CBEC in Q. No. 16, it is clearly specified in this answer that the functions entrusted to a municipality under the Twelfth Schedule to Article 243W of the Constitution. In point no. (f) public health, sanitation conservancy and solid waste management. 11. As per the above explanation, applicant services as mentioned above, are covered in heading no. 9994 - Sewage and waste collection, treatment and disposal and other environmental protection services. Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets. Comments of Jurisdictional Officers (Centre State): 12. The following aspects need to be looked at: i. Whether activities carried out by M/s VPSSR Facilities relating to mechanized cleaning of station, rail wagon, railway office, sheds etc. is covered by the taxable entry - cleaning activity ? ii. Whether cleaning and sanitation services provided to railway stations, trains, sheds, railway colonies and railway offices are in relation to any function entrusted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter Heading Service Description GST Rate (%) Condition 3 Chapter 99 Pure Services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government or Union Territory or local authority or a Governmental authority 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 Nil NIL 16. Thus, as per S. No. 3, the services are exempt from GST only if services offered are: (a) Pure services without any supply of material; and (b) Are in relation to any functions which are entrusted to the Municipality as per Article 243W of the Constitution of India. 17. Services relating to public health, sanitation conservancy and solid waste management fall under Schedule - XII of the Constitution of India under Article 243W and relate to the functions which are entrusted to the Municipality. 18. Paragraph 301 of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/2017 - Integrated Tax (Rate) dated 28.06.2017 by Notification No. 2/2018 - Integrated Tax (Rate) dated 25.01.2018 and parallel SGST Notifications: Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (%) Condition (1) (2) (3) (4) (5) 3A Chapter 99 Composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent. of the value of the said composite supply 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. Nil Nil Relevant Constitutional Provisions: 23. Article 243P of the Constitution of India define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule. 27. The Twelfth Schedule of the Constitution of India reads as under: 1. Urban planning including town planning. 2. Regulation of land-use and construction of building. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic, industrial and commercial pusposes. 6. Public health, sanitation conservancy and solid waste management. 7. Fire services 8. Urban forestry, protection of the environment and promotion of ecological aspects. 9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. 10. Slum improvement and upgradation. 11. Urban poverty alleviation. 12. Provision of urban amenities and facilities such as parks, gardens, playgrounds. 13. Promotion of cultural, educational and aesthetic aspects. 14. Burials and burial grounds, cremation, cremation grounds and electric 15. Cattle pounds; preventio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; or 'Local Authority' or a 'Governmental Authority' or a 'Government Entity'. (iii) Whether the said cleaning activity is in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India. 32. As far as the first aspect mentioned above is concerned i.e. whether the cleaning services supplied by the applicant to the Northern Railways are 'pure services' or the same also involve supply of any goods, it is observed that in the applicant's own case in Writ Petition (C) No. 7843/2014, the Hon'ble High Court of Delhi has delivered a judgment on 15.02.2017 in which it is mentioned that the petitioner had been awarded a contract by the Northern Railways in relation to the management, cleaning, washing, housekeeping, waste management etc. The Trade Taxes Department held a view that chemicals/ solvent used in the process of cleaning amounted to sale of goods. 33. It was contended by the applicant that being a pure service contract, they were paying service tax @ 12.36% on the entire consideration received by them. There is no separate payment made for the use of consumables. For the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, it is held that in the present case, the cleaning contracts of the applicant with the Northern Railways, which may involve use of consumables such as soap/ detergent/ chemicals of a minimal quantity and of a very nominal value are pure service contracts, in terms of S. No. 3 of Notification No. 9/2017 - Integrated Tax (Rate) dated 28.06.2017 as amended by Notification No. 2/2018 - Integrated Tax (Rate) dated 25.01.2018 and parallel CGST and SGST notifications. 38. As far as the second aspect is concerned i.e. whether the service receiver i.e. Northern Railways is covered in 'Central Government' or 'State Government' or 'Union Territory' or 'Local Authority' or a 'Governmental Authority' or a 'Government Entity' or not, it is observed that as per Section 3(8) of the General Clauses Act, 1897, the 'Central Government' means the President. Therefore, the officers subordinate to him while exercising the executive powers of the Union vested in the President and in the name of President are also covered in 'Central Government'. It is observed that contracts by Northern Railway to the applicant have been awarded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mugao Municipal Council (MMC) that MMC, who was engaged in collecting rent contested payment of Service Tax and argued that certain markets were made by them as per their duty under the Constitution of India. They had argued that the renting of immovable property service in such markets cannot be considered as taxable service as the said markets were developed in discharge of Constitution responsibility under Article 243W of the Constitution of India and the 12th Schedule thereunder. They argued that they were not engaged in the trade or commerce and the shop rent out are not in the course of furtherance of business or commerce but are statutory responsibility under the Goa Municipality Act and are for discharge of Constitutional obligation. 42. However, Hon'ble CESTAT held that perusal of Entries 12 and 17 of Schedule Xll clearly shows that what has been mentioned thereunder is provisions of urban amenities and facilities, such as parks, gardens, playgrounds. The market cannot be considered to be similar in nature and therefore provision of markets cannot be considered to be, the responsibility under Sr. No. 12 of the 12th Schedule. Similarly Sr. No. 17 relates to street ..... 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