TMI Blog2021 (2) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... 13/2017-Central Tax (Rate) dated 28-06-2017 as amended by the Notification No. 29 / 2018-Central Tax (Rate) dated 31-10-2018. The Kuvempu University is an establishment of the State Government. Therefore, Kuvempu University is not liable to discharge tax under reverse charge basis. Hence the applicant is liable to discharge GST @ 18% on forward charge mechanism on the said supply of manpower services. - KAR ADRG 03/2021 - - - Dated:- 29-1-2021 - DR. M.P. RAVI PRASAD, AND SRI. MASHHOOD UR REHMAN FAROOQUI, MEMBER Represented by : Sri. Shivaraj Kumar, Director ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER 98(4) OF THE KGST ACT, 2017 M/s. KSF-9 Corporate Services Pvt Ltd., (hereinafter referred as applicant ), having GSTIN 29AAFCK8154M1ZV, have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 read with Rule 104 of the CGST Rules, 2017 and under Section 97 of the KGST Act, 2017 read with Rule 104 of the KGST Rules 2017, in FORM GST ARA-01, discharging the fee of ₹ 5,000/- each under the CGST Act and the KGST Act. 2. The applicant is a Private Limited Company incorporated under the Companies Act, 1956 and entered into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appropriate authority as per the rules and shall pay such taxes duties fees and other impositions as may be levied under the Applicable Law, the amount of which is deemed to have been included in the contract price. 3.5 The applicant stated that the University shall pay the service charges to the applicant at the rate of 3% per wage of each worker and the applicant shall deposit a sum of ₹ 15,00,000/- (Rupees Fifteen Lakh only) as security deposit in the form of Bank guarantee given by any Bank recognized by the Government of India for due and proper performance of the obligations undertaken by the Applicant under this contract. 3.6 The applicant stated that he shall indemnify the University against any claim, loss, damage occurred or caused to the University due to willful acts or omissions or carelessness or negligence of the workers employed by the applicant while on duty and the said applicant at its own expenses shall provide its security personnel with necessary uniform arms etc. PERSONAL HEARING 4. Sri Shivaraj Kumar, Director of the applicant company appeared before the authority on 15-10-2020 and made submissions reiterating the issue involved. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eployed by the Agency will rest with the University and the disciplinary/ administrative/ Technical control will be with the service provider. 5.4 Further, in para 5.16 it is made clear that in case if the University require the service provider to remove any person or persons from work employed by the service provider, who may be incompetent or for his/her/ their misconduct then the service provider shall forthwith comply with such requirements. The Service Provider shall replace immediately any of its personnel, if they are unacceptable to the University because of security risk, incompetence, conflict of interest and breach of confidentiality or improper conduct upon receiving a written notice from the University. 5.5 It is observed from para 5.21, in relation to the valuation, that the service provider will submit the bill in triplicate in respect of a particular month, which shall be annexed by the dated acquittance roll, certificate given by the Officer in charge regarding attendance and production of documentary evidence towards P.F./ ESI / Service Tax and etc. in respect of its staff for the previous month. Tax, if any shall be deducted at source as per the relevant p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The claim of the applicant that they are exempted, under entry no.3 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, is examined and the said entry read as under: Pure Services (excluding works contract service or other composite supplies involving any goods) provided to the Central Government, State 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. 8.1 The applicant submitted that the recipient of the services of the applicant i.e. Kuvempu University, Shivamogga, is of the view that their transaction with applicant is exempted from the payment of taxes either under entry number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 or under entry number 66 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017. 8.2 The exemption as per entry number 3 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 is applicable when any registered person is providing Pure services (excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority as may be necessary to enable them to function as institutions of self government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; There are 29 items mentioned in eleventh schedule and 18 items in the twelfth schedule of the Constitution and provision of manpower for security and housekeeping services is not covered under the said lists. Therefore, we conclude that the applicant is not eligible for exemption under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. 9. The applicant is of the view that they are also eligible for exemption under entry number 66 of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017, which reads as under: Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a registered person: Any person other than a body corporate A registered person located in the taxable territory. ; Provided that nothing contained in this entry shall apply to, - (i) (a) a Department or Establishment of the Central Government State Government or Union territory; or local authority; or (c) Governmental agencies; which has taken registration under the Central Goods and Services Tax Act, 2017 (12 of 2017) only for the purpose of deducting tax under section 51 of the said Act and not for making a taxable supply of goods or services; or (ii) a registered person paying tax under section 10 of the said Act. 11. We find that Kuvempu University is an establishment of the State Government. Therefore, Kuvempu University is not liable to discharge tax under reverse charge basis. Hence the applicant is liable to discharge GST @ 18% (9% CGST + 9% KGST) on forward charge mechanism on the said supply of manpower services. 12. In view of the foregoing, we pass the following RULING The applicant is liable to di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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