TMI Blog2021 (8) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... is liable to tax at 18%. The Provision of man power services to Zilla Panchayat, City Corporation/Municipalities are exempted only when they are provided 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 - The Provision of manpower services like cleaning staff, cook, assistant cook, teachers, staff nurse and watchman to hostels and residential schools working under Social welfare department is exempted as it satisfies both the conditions mentioned under entry no.3 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. These manpower services are provided to Social Welfare Department which is a department of State Government - These manpower services are provided to socially backward people, scheduled caste and scheduled tribe which is in relation to function entrusted to a Panchayat under article 243G of the constitution which is covered by 27th entry of eleventh schedule which says Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes . The applicant also provides manpower s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up etc. to Zilla Panchayat departments and they are claiming that manpower services provided to them are exempted from GST under SI.No.3 of Notification No. 12/2017-Central Tax (Rate), dated 28th June 2017 as pure services. 4.3 The Applicant contended that they are providing Manpower Services like Drivers and cleaners for solid waste management system to City Corporation / Municipalities. City Corporations / Municipalities are claiming that manpower services provided to them are exempted from GST under SI.No.3 of Notification No. 12/2017-Central Tax (Rate), dated 28th June 2017 as pure services since the activity they are doing is covered under Public Health Sanitation Conservancy and solid waste management which is covered under article 243W of the Constitution. 4.4 The Applicant states that they are also providing Manpower Services like cleaning staff, catering staff like cook, assistant cook and watchman to Education Institutions under Zilla Panchayat, like Department of Social Welfare /Department of BCM and the said government departments are claiming that providing manpower services are exempted from GST under SI.No.66 Heading 9992 of Notification No. 12/2017-Central T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Panchayat, Gadag is hiring the services of Stenographer, Data Entry operator, Drivers and Attenders from an outsourced agency. The agency is adding 18% GST and the same is being paid to the agency after TDS @ 2%. The AG audit team during the compliance audit of the accounts of the Zilla Panchayat, Gadag has observed that the supply of man power services without involving any supply / transfer of goods to panchayat which is entrusted with the functions defined under Article 243G of the constitution shall be treated as supply of Pure services and the payment made towards obtaining such services by the agency do not attract levy of service tax with effect from 01-07-2017. As per the section A para made by Senior Audit Officer, Principal Accountant General, Dharwad payment made towards obtaining the man power services by the agency do not attract levy of GST. Further, the Advance Ruling No.GU/GAAR/R/2020/18 in case Dated: 19-05-2020, it has been concluded by Gujarat Authority for Advance Ruling, Goods and Service Tax states that the agency supplying man power services is exempted from GST . In the letter, with the above submission, clarification regarding levy of GST on supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NIL Notification No.12/2017-State Tax (Rate) dated 29.06.2017 is similarly worded. 6. In terms of the above Notification-the GST leviable is nil in respect of - Pure services (excluding works contract service or other composite supplies involving supply of 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 relation to any function entrusted to a Municipality under article 243W of the Constitution. Functions entrusted to Panchayat and Municipality in terms of Article 243G and 243 W are as under: ............... ............... 7. As per the above lists, the Functions the Panchayat or Municipality are exhaustive and all encompassing. However, from the wording of exemption notification 12/2017-CT (Rate) at entry s.no.3 of notification the exemptions covered therein, i.e., supply of service to municipality or Panchayat, is not across the board but restricted to supplies made in respect of functions covered under Article 243G and 243W. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axes, LGSTO-320, Hubballi on 17-04-2021 to file comments on the application filed. In response to the same, the said officer has furnished comments as below: In case of M/s. Madivalappa Karveerappa Belwadi opinion is sought regarding advance ruling related to GST on supply of man power services . Further, on verification of the cited subject, as per Notification No. 12/2017-Central Tax Rate, dated: 28.06.2017 Pure Services provided to the State Government, Local Authority, Governmental authority or a Government entity is exempted under article 243G and 243W of the Constitution. The said exemption is applicable depending on the nature of services and the conditions of the service contract and on complete verification of the subject matter. In case if the services involves other facts apart from pure services, then the same is subjected to tax at the rate of 18% under section 9, 9(1) and 15 of the KGST Act, 2017 . PERSONAL HEARING / PROCEEDINGS HELD ON 30-06-2021 7. Sri M.K.Belwadi, Proprietor of the said concern appeared for personal hearing/proceedings held on 30-06-2021 and reiterated the facts narrated in their application. FINDINGS DISCUSSION 8. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d entry of the notification it is observed that, in order to claim exemption on supply of man power services two conditions should be satisfied: i. 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 ii. 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. 13.1 Now we examine one by one. The Applicant states that he is providing manpower services to Zilla Panchayat, City Corporation / Municipalities. As per section 2(69) of KGST Act 2017 Local Authority means (a) Panchayat as defined in clause (d) of article 243 of the Constitution; (b) a Municipality as defined in clause (e) of article 243P of the Constitution; (c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29. Maintenance of community assets. 13.4 243-W. Powers, authority and responsibilities of Municipalities, etc Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow (a) the Municipalities with such powers and authority 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 18 items in the twelfth schedule of the Constitution which are as below: 1. Urban planning including town planning. 2. Regulation of land-use and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic, industrial and commercial purposes. 6. Public health, sanitation conservancy and solid waste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d hostels, residential schools working under Social Welfare Department, Government of Karnataka. 13.9 The Provision of manpower services like cleaning staff, cook, assistant cook, teachers, staff nurse and watchman to hostels and residential schools working under Social welfare department is exempted as it satisfies both the conditions mentioned under entry no.3 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. These manpower services are provided to Social Welfare Department which is a department of State Government. These manpower services are provided to socially backward people, scheduled caste and scheduled tribe which is in relation to function entrusted to a Panchayat under article 243G of the constitution which is covered by 27th entry of eleventh schedule which says Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes . 13.10 The applicant also provides manpower services like clerical staff (FDA, SDA) and Typists to district and taluk offices of Social welfare department. Even though the manpower services are provided to Social Welfare Department which is a Department of State Government the manpow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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