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TMI Blog2020 (9) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... at SSNNL is incorporated under the Companies Act 1956 wherein 100% equity is owned by the Govt. of Gujarat. As per the provisions of Companies Act, 1956, company requires to maintain books of account as per double entry system on accrual basis. For the same, Company has appointed the applicant to provide maintenance of accounts service in the computerized manner in Segment III of the Company. 3. The applicant submitted that Segment III of SSNNL consist of 31 Divisions which carries out activity of water supply for domestic, industrial and commercial purpose which is entrusted to Municipality under Twelfth Schedule of Article 243W of the constitution as one of the major activities. For the purpose of maintenance of accounts service applicant is required to attend division office as and when required and accounts are required to maintain at division office only. The applicant has provided the agreed service to SSNNL for the F.Y. 2017-18 and issued its Tax Invoice No. 230/2018-19 dated 04.07.2018 amounting to Rs. 1,38,680/- by charging CGST and SGST u/s. 9(1) of the CGST Act, 2017 and SGST Act, 2017. 4. The applicant submitted that they understand that the service provided to SSNNL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to levy CGST and SGST on its professional Fees. 9. The applicant submitted that they have not availed any input service to provide accounting services to SSNNL. As applicant has not availed any input service to provide service to SSNNLK, if it is held that the service provided by them to SSNNL covered under entry No. 3 of Not No. 12/2017-CT (rate) then also the applicant is not required to reverse any input tax credit under Rule 42 of CGST Act, 2017. 10. The applicant sought the advance Ruling on the following question The professional service for maintenance of accounts and allied items of work provided to Sardar Sarovar Narmada Nagar Limited (SSNNL ) { A Government of Gujarat undertaking) by the applicant is a taxable service under Section 9 (1) of The CGST Act, 2017 or exempted vide Sr. No.3 of Not. No. 12/2017-CT (Rate) dated 28.06.2017. Personal Hearing 11. Personal hearing in the matter was held on 11-06-2020. Shri Sameer Siddhpuriya, Advocate appeared on behalf of the applicant and re-iterated the submission made in the Application. Discussion and Finding 12. We have considered the submissions made by the Applicant in their application for advance ruling. We have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity in relation to any function entrusted to a (i) Panchayat under Article 243G of the Constitution; or (ii) Municipality under Article 243W of the Constitution 13.4 Regarding the first condition, we are to examine what is 'Pure Service". In GST Act, "Pure Service" has not been defined. Accordingly, in general terms we can conclude that any activity/ supply which do not involve goods can be termed as Pure Service. It is clear from the applicant's nature of work that the activity of maintenance of accounts does not involve any supply of goods but only services. Hence, the first condition is satisfied 13.5 The second condition to be examined is whether the recipient is a Government or local authority or a Governmental Authority. Admittedly, the recipient of services i.e. Sardar Sarovar Narmada Nigam Limited is neither Central Government nor State Government nor Union Territory nor Local Authority. It remains to be examined whether the recipient of supply of services from the applicant i.e. SSNNL is a Governmental Authority or Government entity or not? 13.6 The clause 2(zf) of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 defines the Governmental Authority as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases the agricultural production and domestic power generation. Accordingly, SSNNL is a Government Authority. Hence the second condition is also satisfied. 13.9 The third condition is to be examined whether the service provided by the applicant to SSNNL is in relation to work entrusted to a Panchayat under Article 243G of the Constitution; or Municipality under Article 243W of the Constitution. The list of functions entrusted to a Panchayat under Article 243G of the Constitution are as under: 1. Agriculture, including agricultural extension. 2. Land improvement, implementation of land reforms, land consolidation and soil conservation. 3. Minor irrigation, water management and watershed development. 4. Animal husbandry, dairying and poultry. 5. Fisheries. 6. Social forestry and farm forestry. 7. Minor forest produce. 8. Small scale industries, including food processing industries. 9. Khadi, village and cottage industries. 10. Rural housing. 11. Drinking water. 12. Fuel and fodder. 13. Roads, culverts, bridges, ferries, waterways and other means of communication. 14. Rural electrification, including distribution of electricity. 15. Non-conventional energy sources. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility which is a function entrusted to a Panchayat under Article 243G and Municipalities under Article 243W of the Constitution. 15. The words "in relation to" is defined in the Oxford Dictionary as to mean "in the context of" or "in connection with". When two activities are directly linked to each other, then they are said to be in connection with or in the context of. The terms have been interpreted by the Supreme Court in the case of CCE V/s Rajasthan State Chemical Works 1999(55) ELT 444 (SC) and Union of India V/s Ahmedabad Electricity Co. Ltd. 2003(158) ELT 3(SC) wherein it has been held that such words widen and expand the scope, meaning and content of expressions. Further submitted that Hon'ble Supreme Court in case of M/s. Doypack Systems (P) Ltd. Vs UOI 1988 (36) ELT 201 SC held that, "The expression "in relation to" (so also "pertaining to"), is a very broad expression, which pre-supposes another subject matter. These are words of comprehensiveness which might both have a direct significance as well as an indirect significance depending on the context". 16. The applicant has provided no evidence to establish that the activity of providing service of auditing, accountin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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