TMI Blog2019 (9) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... is imported for the purpose of business or commerce even by the Govt then exemption would not be available and Govt need to pay GST under Reverse Charge. In the present case, the applicant is engaged in activities which is to be treated as Business or profession as defined in the Section 2(17) of CGST Act. Further applicant is taking the service from non taxable territory for the purpose of business or profession therefore exemption provided in the N/N. 9/2017-lntegrated Tax (Rate) dated June 28, 2017 would not be available to the applicant. Therefore the applicant needs to pay the IGST under Reverse Charge. - Case Number 09/2019 and Order No. 10/2019 - - - Dated:- 18-7-2019 - RAJIV AGRAWAL AND MANOJ KUMAR CHOUBEY MEMBER Present on behalf of applicant: Shree Navneet Garg, CA PROCEEDINGS (Under sub-section (4) of Section 98 of Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods Service Tax Act, 2017) 1. The present application has been filed u/s 91 of the Central Goods Services Tax Act, 2017 and MP Goods Services Tax Act, 2017 (hereinafter also referred to CGST Act and MPSGT Act respectively) by M/s. Directorate of Skill Development ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. 8. In this regard applicant reproduce the Clause 38.1 of the Agreement describing the consideration agreed between the parties: - 9. The Contract price is US $ 3,812,740 (inclusive of Consultant country taxes). The lump sum amount is exclusive of provisional sums and contingency, which will be covered separately under the project, if required. 10. The lump sum amount is exclusive of all Indian taxes, levies and duties imposed by the Applicable Law. If the Applicable Law requires any Indian taxes, levies or duties to be paid, the Consultant shall be entitled to invoice the Client for a higher amount such that, after the payment/withholding of the relevant Indian taxes, levies or duties, the Consultant shall receive the original amounts state in Appendix C. 11. The GSP would benchmark quality skills training institutions in order to arrive at desired competency standards with an appropriate assessment mechanism and offer market responsive employability skills training across various learner segments leading to - a. Wage Employment - Regional, National International b. Self-Employment c. Group Entrepreneurship d. Incubation of ancillary start-ups ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28th June 2019- IT (Rate) and Notification No.8/2017 dated 28th June 2019 - lT(Rate). 6. RECORD OF PERSONAL HEARING: Shree Navneet Garg, CA of the applicant for personal hearing .He reiterated submissions already made in the application. The argument in brief are as follows- 6.1 Directorate of Skill Development (herein after referred as Applicant) is part of Department of Technical Education, Skill Development Employment, Government of Madhya Pradesh hence the applicant is a government department. 6.2 The project for the Establishment of Centre for Occupational Skills Acquisition within the Global Skills Park in Bhopal, Madhya Pradesh was awarded to Directorate of Skill Development, Department of Technical Education, Skill Development Employment, Government of Madhya Pradesh. 6.3 The said Project will assist the Government of Madhya Pradesh (GOMP) in transforming its technical and vocational education and training (TVET) system to create a skilled workforce that meets the evolving development needs of the state. 6.4 The project will establish a new advanced TVET Institute of international standards to introduce high quality, technology oriented skills tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of services where location of supplier or location of recipient is outside India is defined in Sec 13 of IGST Act, 2017: (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services: Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services. 6.11 As the case do not fall under any of sub sections (3) to (13) of section 13 of IGST Act, 2017 the Place of supply shall be the state of Madhya Pradesh, (i.e. Place of recipient). 6.12. Hence considering the above mentioned points services being availed by the Department of Skill Development from ITE Education Services Pte. Ltd, Singapore can be said to Import of services within the meaning of 2(11) of IGST Act 2017. 6.13 Sec 5(3) of IGST Act, 2017 read along with Notification NO 10/2017 Integrated Tax (Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods by a vessel from a place outside India up to the customs station of clearance in India received by persons specified in the entry. Nil Nil Mr. Garg further argued that- 6.15 The service recipient is department of Government of Madhya Pradesh. 6.16 The Supplier of services is located in Singapore i.e. non taxable territory and the recipient is located in Madhya Pradesh. 6.17 The Place of Supply of Service is state of Madhya Pradesh 6.18 The transaction mentioned above is the transaction of import of Services as defined under section 2(11) of the IGST Act, 2017. 6.19 As per Entry no 10 of Notification No 9/2017 Integrated Tax (Rate) dated 28th June 2017, there has been an exemption on services received by the government from the provider of service located in a non taxable territory. Hence the above mentioned transaction is exempted by said notification. 6.20 Section 5(3) of the IGST Act 2017 read along with Notification No.10/2017 provide for payment of tax on Reverse Charge Mechanism on Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) Activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and (i) Any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities; As per Order dated 8th August 2018, Global Skill Park is constituted as a Society under Madhya Pradesh Finns and Societies Act 1973 which is running under MP Technical Education Skills development and employment department. This scheme is a Joint Asian Development Bank and MP State. ........... 7.3 As per the Order dated 8th August 2018, main object of Global Skills Park is Followings are the objective for establishment of this project a. Establish internationally recognized standards in management, teaching quality, training infrastructure, and curriculum content in Madhya Pradesh and use it as a model to stimulate improvement in all TVET institutions; b. Produce occupation-ready skilled workers in accordance with cluster- sector approach in desig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Any person located in the taxable territory other than non-taxable online recipient Now we need to determine whether the service is falling under exemption notification if yes then recipient need not to pay GST under RCM. 7.6 Exemption from Tax on Import of Services Relevant Extract of Exemption Notification No.9/2017-Integrated Tax (Rate) dated June 28, 2017 - Chapter, Section, Heading Description of Services rate Condition Chapter 99 Services received from a provider of service located in a non- taxable territory by - (a) the Central Government, State Government, Union territory, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession; (b) an entity registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) for the purposes of providing charitable activities; or (c) a person located in a non-taxable territory: Provided that the exemption shall not apply to - (i) ..... 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