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TMI Blog2019 (8) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... s and forums. 3. The applicant has the following network of schools and centres through which it executes the above stated functions:- (i) Indian Corporate Law Services Academy (ii) School of Competition Law and Market Regulation (iii) School of Corporate Governance & Public policy (iv) School of Finance (v) School of Corporate Law (vi) Centre for E-governance (vii) Centre for Responsible Corporate Governance (viii) Centre for Micro Small & Medium Enterprises (ix) Centre for Business Innovation (x) Centre for Institutional partnerships & Corporate Communications (xi) Knowledge Resource Centre 4. For the purposes of learning and , development, providing metadata and implementation of projects in the field of corporate social responsibility, a body called National Foundation for Corporate Social Responsibility (NFCSR) was established at IICA in 2012 to be the apex national institution that aims to build an enabling environment for the corporate sector to work in partnership with the government, non-government and civil society organizations for effective contribution towards sustainable growth and development. It has been provided an initial corpus fund b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the detailed project report: (i) Installation of solar water pumps - 122 in Nos; (ii) Installation of solar lights - 1230 in Nos; (iii) Sanitation (construction of toilets) - 3670 in Nos. 7. The relevant extracts from the MOU is produce below: (a) "SCOPE OF THE WORK" (i) The project Seeks to develop and improve village level facilities and infrastructure to mike significant difference in quality of life of the rural area. The specific objectives of the project are: a. Provision of drinking Water facility in covered Villages b. To provide solar street lights in villages c. To improve village sanitation by building household toilets and creating awareness (ii) Proposed project components: a. Provide one solar water lifting pump for a population of 1000 villagers b. Installing need-based solar street lights in selected villages c. Building household toilets and running community awareness camps for sanitation (iii) Expected outcomes: a. The project would bring improvement in lives of 1,26,327 rural population in 50 villages in 5 states of India. (b) The duration of the MOU shall be 1 year which commence from the date of execution and shall expire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and decision making powers to decide as to who would be the recipient of the above mentioned services. PART-B 15. The activity done by IICA for the ultimate beneficiaries is a social activity/ without any consideration, therefore this would not fall under the definition of "Supply" given in section 7 of the CGST Act, 2017, and therefore, would not attract the provisions of GST Law. View-II 16. However, if the transaction between AICL and IICA is treated as supply from IICA to AICL as per the provisions of Section 9 of CGST Act, 2017, then the following questions would arise to determine its chargeability to GST provisions: (i) Whether the supply is of goods or services or both. (ii) Whether the supply is an exempt or taxable supply. 17. Regarding, whether the supply is of goods or services or both, the following activities of: (i) Installation of solar water pumps; (ii) Installation of Solar lights; (iii) Construction of toilets; are works contract in relation to immovable property and as per clause 6 (a) of Schedule II of the CGST Act, 2017, the said activity performed by IICA will fall under "supply of Services." 18. Regarding, whether it is an exempt or taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as coal, oil and natural gas to generate electricity requires burning of fossil fuels which emits a number of air pollutants that are harmful to environment and is major source of global warming. For instance, burning of coal emits sulphur-di-oxide, nitrogen oxides. mercury other harmful gases. II. Use of LED (Light Emitting Diode) used as lighting technology is superior to use of Compact Fluorescent Lamps (CFL) as it does not contain hazardous substances such as mercury as against CFL bulb and also emits significantly lower amount of Carbon dioxide (CO2) as compared to CFL bulb. III. The use of solar energy to generate electricity is an effective way of preventing damage to environment against the harmful effects of burning fossil fuels as mentioned above. IV. This can be evident from the programmes and schemes launched by Government of India and other State Governments to promote use of solar energy. For instance, Jawaharlal Nehru National Solar Mission was launched on June 30, 2008 the Ministry of New & Renewable Energy, Government of India with an agenda to fight against issue of Climate change. This mission envisages preservation of environment as one of the key benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... problem of open defecation, Ministry of Drinking Water and Sanitation, Government of India under its flagship "Swacch Bharat Mission" has vowed to achieve a clean and open defecation free India by 2nd October, 2019 33. Open defecation free is defined as per Ministry of Drinking Water md Sanitation, Government of India as: "ODF is the termination of fecal-oral transmission, defined by: (a) No visible feces in the environment/villages; and (b) Every house as well as public/community institutions using safe technology option for disposal of feces." 34. Safe technology option means no contamination of surface soil, groundwater or surface water excreta inaccessible to flies or animals; no handling of fresh excreta; and freedom from odor and unsightly condition. 35. Construction of toilets (public and household) has been identified as one of the key actions by the Government of India to achieve the target of open free defecation India This can be established from various policy documents issued in this regard. 36. United Nations General Assembly while declaring 2008 as the International Year of Sanitation came out with study "Sanitation protects the environment" in which it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CGST Act, 2017 reads as follows: (1) For the purposes of this Act, the expression "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made agreed to, be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred re in Schedule II. (2) Notwithstanding anything contained in sub-section (1),- (a) activities or transactions specified schedule III; or (b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. (3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the recommendations of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable territory also he does not have a representative in the said territory, such commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. 44. The Circular No. 127/09/2010-ST dated 16.08.2010 regarding Service Tax on commercial training and coaching-clarification whether 'donation' is 'consideration', read as follows: 1. A representation has been received seeking clarification whether donations and grants-in-aid received from different sources by a charitable Foundation imparting free livelihood training to the poor and marginalized youth, will be treated as 'consideration' received for such training and subjected to service tax under 'Commercial training or coaching service'. 2. The matter has been examined. The important point here is regarding the presence or absence of a link between 'consideration' and taxable service. It is a settled legal position that unless the link or nexus between the amount and the taxable activity can be established, the amount cannot be subjected service tax. Donation or grant-in-aid is not specifically meant for a pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad submitted a Detailed Project Report (DPR) to AICL. 48. As per the Detailed project Report (DPR) submitted by the applicant, IICA to M/s AICL, further study and secondary data analysis was conducted to identify 50 underserved villages from the five states to take up following much-needed interventions in the selected villages with an objective of making a measurable difference in the lives of people: 1. Providing better healthcare facilities to the village population by facilitating regular visits of doctors and providing basic healthcare facilities. 2. Improving access to drinking water by installing solar water pumps. 3. Providing solar street lights in villages which have inadequate or no street lights. 4. Improving village sanitation by building household toilets for poor people who have not been covered under the Swachh Bharat Abhivan till date and are still resorting to open defecation, 49. Through the above interventions in 50 selected villages, the programme envisages to serve 25053 households with a total population of 125927. The programme would provide a total of 1230 solar street lights, 122 solar water pumps and 3670 individual household units in the villa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar Street Lights: 55. Lighting is the basic amenity which is needed by all. Most of the villages in India do not have adequate facilities for street lighting, Installation of solar street lights is proposed to improve safe navigation on village streets and conserving energy through solar fights. In each village 20-40 Solar lights will be provided depending on their geographical area and population. A total of 1230 street rights are proposed to be installed. 56. Objectives: 1. Improved visibility at night which will reduce crime rate and improve navigation. 2. Environment conservation by using solar energy instead of electricity. Sanitation Awareness and construction of Household Toilets: 57. The. intervention aims to build household toilet facilities and improve village and individual level of sanitation and hygiene and create a healthier dwelling for villagers. Beneficiaries will be and underprivileged households who have not been able to build Sanitation facilities in their dwellings. Total 3760 beneficiaries would be covered under the project in all five states. 58. objectives: 1. Eradicating the practice of open defecation. 2. Ensuring clean, healthier environmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties of the applicant can be considered as supply of goods or services and whether the applicant is liable to pay GST on the amount received by them from AICL if the Said amount is treated as "consideration" towards "supply" of goods or services. Also, whether the amount received from AICL can be treated as grant-in-aid, which may be non-taxable. (ii) Whether the said supply of goods or services by the applicant is exempted under S. No. 1 or under S. No. 76 of the Notification No. 12/2017 -Central Tax (Rate) dated 28.06.2017. Question No. 1: 65. The first issue mentioned above is whether the amount paid by M/s AICL to the applicant is in the nature of consideration for supply of good or services or the same can be considered as grant-in-aid. The applicant has claimed that the amount received by them from AICL is not covered in the definition of "consideration" as per Section 2(31) of the CGST Act, 2017. The first argument of the applicant is that the payment of money by AICL to them cannot be called consideration as the applicant is not providing any services to M/s AICL but the agreed services are being supplied directly to the ultimate recipients / beneficiaries of the sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of specific numbers solar pumps and solar street lights and for construction of Specific numbers of toilets. Further, the MoU specifies the details of the beneficiaries and guidelines to ensure that such services are delivered to them. Hence, it is not a case where IACL has donated lump sum to the applicant for carrying out activities which the applicant may be persuing. The amount paid in this case is linked to specific taxable activity. Question No. 2: 69. The second issue for decision is whether the said services supplied by the applicant are covered under S. No. 1 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 under which services supplied by the entities registered under Section 12AA of the Income Tax Act, 1951 are fully exempted from payment of CGST provided that the said services are by way of any charitable activity. Also, whether the said services are covered in S.No. 76 of the said notification under which "services by way of public convenience such as provision of facilities of bathrooms, washroom, lavatories, urinal or toilets" are exempted provided they are covered under Heading 9994 of Tariff. 70. It is also observed that the order of regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HIV infection; (ii) advancement of religion, spirituality or yoga; (iii) advancement of educational programmes or skill development relating to, - (A) abandoned, orphaned or homeless children; (B) physically or mentally abused and traumatized persons; (C) prisoners; or (D) persons over the age of 65 years residing in a rural area; (iv) preservation of environment including watershed, forests and wildlife; 74. The applicant has claimed that the services supplied by them are covered in Clause (i) (B) and (iv) of the above definition of charitable activities. Hence, the activity installation of solar water pumps and installation of lights would be covered under S.No. I of Notification no. 12/2017 -Central Tax (Rate) dated 28.6.2017. 75. However, it is observed that Clause (i) (B) of definition of charitable activity covers: "activities relating public health by way of public awareness of preventive health, family planning or preservation of HIV infection." 76. The activity of installation of solar water pumps and installation of solar lights in villages for improving infrastructural facilities is not covered in the said clause. 77. Further, for the said service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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