TMI Blog2019 (6) TMI 1483X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. In order to be covered under Sr. 4 of Notification No. 12/2017-Central Tax (Rate), the service by a governmental authority itself should relate to an activity listed under Article 243W read with Twelfth Schedule of the Constitution. Renting of Immovable Property is not covered under Article 243W read with Twelfth Schedule of Constitution. Thus, the exemption provided vide Sr. 4 of Notification No. 12/2017-Central Tax (Rate) is not admissible to appellant for providing service of Renting of Immovable Property to Anandalya Educational Society - decision of AAR upheld. - GUJ/GAAAR/APPEAL/2019/4 (IN APPLICATION NO. Appellate Advance Ruling/SGST & CGST/2019/AR/1) - - - Dated:- 29-6-2019 - AJAY JAIN AND DR. P. D. VAGHELA MEMBER Present for the applicant : Shri Hardik Shah, CA Shri Kumar Parekh, CA The appellant, M/s. National Dairy Development Board (herein after referred to as M/s. NDDB ) is a statutory body constituted by an Act of Parliament, namely, the National Dairy Development Board Act, 1987. M/s. NDDB has created a trust in the name of Anandalaya Educational Society and allowed it to occupy the property within its campus. The property is allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sr. No. 4 of Notification No. 12/2017-Central Tax (Rate) and corresponding State Tax Notification, if it qualifies as governmental authority . 5. Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal. 6.1 The appellant has submitted that the Advance Ruling is issued with if condition i.e. the appellant would qualify as Governmental Authority if it fulfils the condition of ninety percent or more participation by way of equity or control , and such conditional ruling or ruling with if condition is not proper and against legal provisions. 6.2 It has been submitted that the condition put forth in the ruling is limited to the fact whether the appellant fulfils the condition of ninety percent or more participation by way of equity or control. It has been submitted that the ruling has accepted the fact that the Appellant fulfils the criteria of carrying out any function as entrusted to a municipality under Article 243W of the Constitution. The appellant submitted that the appeal is preferred in order to determine requirement of fulfillment of condition of ninety percent or more participation by way of equity or control, in light of av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following provisions of NDDB Act. (i) The Board of Directors of NDDB would be nominated by the Central Government. [Section 8], (ii) The appointment of auditors for NDDB would be subject to approval of Central Government. [Section 28], (iii) The Audit Report issued by the auditors would be laid before the Parliament by the Central Government. [Section 29], (iv) In case NDDB wishes to form new company or acquire any company then the previous approval of Central Government is mandatory. Central Government may make any scheme and liquidation can be done by order of the Central Government. [Section 37]. In view of the above, the appellant has submitted that it is fully governed / controlled by the Central Government and hence it fulfills the condition of ninety percent or more participation by way of control in order to qualify as Governmental Authority. 9. Personal Hearing in this case was held on 14.06.2019, wherein in addition to reiterating their submission in the appeal memorandum, they submitted notification S.O. 1869(E) dated 09.06.2017 and notification S.O. 1140 (E) dated 06.03.2019 to buttress the point that their organization has been set up under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with 90 per cent, or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution or to a Panchayat under article 243G of the Constitution , is not applicable to them. The decision of Hon ble High Court of Patna in the case of Shapoorji Paloonji Company Pvt. Ltd. Vs. C.C., C.Ex. S.T., Patna [2016 (42) S.T.R. 681 (Pat.)] = 2016 (3) TMI 832 - PATNA HIGH COURT has been relied upon by the appellant to buttress this contention. 12.3 It is pertinent to note that Special Leave to Appeal (C) No. CC 7472 of 2017 has been filed by the department in the Hon ble Supreme Court against the aforesaid decision of Hon ble High Court of Patna and Hon ble Supreme Court has issued notice in this case on 13.04.2017. Therefore, the aforesaid judgement of the Hon ble High Court of Patna in the case of Shapoorji Paloonji Company Pvt. Ltd. Vs. C.C., C.Ex. S.T., Patna [2016 (42) S.T.R. 681 (Pat.)] = 2016 (3) TMI 832 - PATNA HIGH COURT is in jeopardy, in view of the judgement of Hon ble Supreme Court in the case of Union of India Vs. West Coast Paper Mills Ltd. [2004 (164) E.L.T. 375 (S.C.)] = 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) to carry out any function entrusted to a Municipality under article 243W of the Constitution or to a Panchayat under article 243G of the Constitution. 13.3 The appellant National Dairy Development Board has been set up by an Act of Parliament, namely the National Dairy Development Board Act, 1987 , therefore it satisfies the first part of the definition. 13.4 The appellant has mentioned nothing about equity participation in the appeal memorandum. However, it has been submitted that the appellant is totally controlled by the Central Government. As the Chairman and Directors of NDDB are nominated by the Central Government, appointment of auditors for NDDB is subject to approval of the Central Government, Audit Report issued by the auditors is laid before the Parliament by the Central Government and approval of the Central Government is required for acquisition of new company etc., as per the provisions of NDDB Act, 1987, the appellant also satisfies the condition of 90 per cent, or more participation by way of equity or control. 13.5 The last part of the condition provides that such authority / board / other body should have been set up or established to carry out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient information provided by the appellant, we are unable to determine whether M/s. NDDB is Governmental Authority as per definition of Governmental Authority provided vide clause (zf) of Para 2 of Notification No. 12/2017-Central Tax (Rate), or otherwise. 14.1 The main question involved in this case is whether exemption under Sr. 4 of Notification No. 12/2017-Central Tax (Rate) is admissible to NDDB for providing service of renting of immovable property to Anandalaya Educational Society . The said Sr. 4 of Notification No. 12/2017-Central Tax (Rate) provides exemption to services by governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243W of the Constitution. 14.2 The appellant NDDB has provided service of Renting of Immovable Property to Anandalaya Educational Society . The argument of the appellant is that the services of Renting of Immovable Property for educational institute would be covered by item 13 of Twelfth Schedule read with Article 243W of the Constitution, which covers promotion of cultural, educational and aesthetic aspects . It has been submitted that the appellant established th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant is covered by the order of my colleague and therefore it is not repeated. I differ with the findings of my colleague and therefore also the order of my colleague. The differences are as follows: 1. I agree with the findings of the Advance Ruling authority that documents are not submitted by the appellant, substantiating the claim of appellant that it is a governmental authority as required by Notification No. 12 of 2017, Central Tax (Rate). The appellant is required to prove the claim by submission of documents. The advance ruling authority is therefore right in ruling that,- (i) National Dairy Development Board (24AADCN2029C1Z5) would be qualified as governmental authority from goods and services tax perspective, if it fulfills the condition namely with ninety percent or more participation by way of equity or control to carry out any function entrusted to a municipality under article 243W of the Constitution . Even in the appeal, authentic documents are not produced by the appellant. As already mentioned in the order of my colleague, the long line after the words Governmental Authority means an authority or Board or any other body which is applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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