TMI Blog2021 (8) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... d unless the State Government notifies those grants or revenues now in the hands of AJL as a local/municipal fund, the grants/revenue of AJL does not merit to be termed local/municipal funds any longer - the AJL has neither been set up by an Act State Legislature nor been established by the State Government of Gujarat. Government is defined at section 2(53), CGST Act as Central Government and at Section 2(53) GGST as Government of Gujarat - there are no merit to consider AJL a Government authority/ Government entity. The applicant placed reliance on cases pertaining to different persons which have different constitution and establishment and are different from it in legality and as a person. Further as per law as stipulated in Section 103, CGST Act, Advance Rulings pronounced shall be binding only on the applicant who had sought it in respect of any matter referred to in Section 97(2) CGST Act for Advance Ruling and the concerned officer or the jurisdictional officer in respect of the applicant. The applicant without establishing that its revenues are notified as local/municipal funds by the competent authority cannot make a case by misplaced reliances on other Advance Rulings a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... areholder of AJL i.e. AJL is nothing but a mere offshoot of AMC and for all practical purpose, AJL is an inseparable part of AMC; that the applicant is an extended arm of the Municipal Corporation and does the activities as per the functions entrusted to Municipal Corporation. The incorporation of AJL has been summarized as follows: Ahmedabad Municipal Corporation Funded Janmarg Project Special Purpose Vehicle-Ahmedabad Janmarg limited maintains and operates BRTS buses 4. The applicant has submitted the organization chart of AJL as follows: 5. The applicant has stated that majority of the employees that work for AJL are sent on deputation by AMC; that the Deputy/Assistant Municipal Commissioner of AMC is in-charge for the operation of AJL and in case he/she is posted to a different department of AMC, another Assistant Municipal Commissioner of AMC is given charge of the operations of AJL; that similarly, other AMC officers such as city engineers are deputed to AJL to carry out day to day activities; that since AJL is part of centrally funded scheme, various stakeholders are involved and the details of the key stakeholders are given; that the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government entity 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. NIL NIL The Applicant submitted that to qualify for above exemption, it is to fulfill conditions: be a Local Authority and that services (procured) are by way of activity in relation to function entrusted to Municipality under Article 243W of Constitution. 8.1 The applicant submits they are Local Authority since it is managed by AMC and their activity of providing transportation services is covered under either functions of Article 243W of Constitution and therefore the services received by them in relation to/ pertaining to transportation services should be eligible for exemption from payment of GST: Provision of urban amenities and facilities such as parks, gardens, playgrounds; Public amenities including street lighting, parki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant had sought an advance ruling on whether the Applicant qualifies to be a local authority and while analyzing the definition of the term local authority , the AAR observed the following: In Agricultural Produce Market Committee Narela, Delhi [(2008) 9 SCC 434] the Apex Court has examined the context in which it has earlier interpreted the words other authority in R.C. Jain (supra). The court adopted the test of like nature . As the words other authority came after the words Municipal Committee , District Board or Body of Port Commissioners , it took color from these earlier words. The purpose and object are, therefore, to cover those bodies, which are discharging municipal functions but are not covered by the definition of municipalities as required to be constituted under Article 243Q of the Constitution (refer to the Apex Court judgment dated 12-10-2018 on Urban Improvement Trust (Case No. CA 10577 of 2018)]. 9.1 Accordingly, it was observed that AMTS is a statutory authority established to carry out the functions entrusted to a Municipality under Article 243 of the Constitution, is a body discharging municipal functions although not a municipalit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in supplying manpower for security and housekeeping to the Central Government, State Government and Local Authority and it was upheld in the AAR that these pure services would be eligible for exemption from payment of tax subject to the condition that the services provided to these entities mentioned above are provided by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India. 10.2 The applicant cited Advance Ruling orders: GUJ/GAAR/R/08/2019 in the case of M/s. Jayesh Anilkumar Dalal. Rajasthan Authorities for Advance Rulings in the case of M/s PDCOR Limited, Jaipur (Raj) vide order no RAJ/AAR/2018-19/13 Dt. 25-8-18. Goa Authorities for Advance Rulings in the case of Sewerage Infrastructural Development Corporation of Goa Ltd vide order # GOA/GAAR/10/ 2018-19 dated 30-9-19. West Bengal Authorities for Advance Rulings in the case of Shri Sumitabha Ray vide order no. 27/WBAAR/2019-20 Dt. 23-9-19. Karnataka Authorities for Advance Rulings in the case of Sri Roopesh Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13, 2018, the list of persons required to deduct TDS inter-alia includes local authority; that the applicant merit classification of local authority and therefore required to obtain registration as TDS deductor. 13. The applicant submits that if they do not qualify to be a local authority , can they be construed to be a government entity . The term government entity has been defined under Notification 12/2017 dated June 28, 2017 to mean as: Government Entity means an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90 per cent. or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority. The term governmental authority has also been defined under Notification 12/2017 dated June 28, 2017 to mean as under: Governmental Authority means an authority or a board or any other body,- (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with 90 per cent. or more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te) dated 28-06-2017? 4. Whether AJL is required to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act? 5. If AJL does not qualify to be local authority under Central Goods and Services Tax Act, 2017 in Part A, can be it construed to be a government entity or a governmental authority? C. Personal Hearing: 15. Shri Hardik Shah C.A. and Shri Rutvij Modi, C.A. appeared on 30-06-21 reiterated the contents of the application. The following copies were submitted- i. Letter dated 14-9-07 of the Municipal Commissioner regarding registration of Ahmedabad Janmarg ltd. along with a proposed list of Board of Directors. ii. Letter dated 18-3-08 issued by the Deputy Secretary, Urban Development and Urban Housing Department, Sachivalaya, Gandhinagar addressed to the Municipal Commissioner of Ahmedabad Municipal Corporation regarding granting of approval of registration of Ahmedabad Janmarg ltd. iii. Copies of following Rulings as cited above in brief facts: Advance Ruling 2019-TIOL-236-AAR-GST dated 13-6-19 in case of M/s. Vidarbha Infotech Pvt. Ltd. Advance Ruling No. GUJ/GAAR/R/13/2021 dated 27-1-21 in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipal funds any longer . Suppose, (If) we agree with the submission of the applicant that AJL is a local Authority, then indirectly, this Authority is notifying the Revenues/grants in the hands of AJL as local/municipal fund, which is illegal, for the competency to notify rests with the Gujarat State Legislature or vide the Gujarat Treasury Rules to notify the same. The wordings of the statute at Section 2(69) (c) CGST Act, for the definition of Local Authority is clear and precise. These wording in a statute when clear, plain and unambiguous and only one meaning can be inferred, we are bound to give effect to the said meaning. We give due Regard to the clear meaning of words and matter should be governed wholly by the language of the Statute. We cannot allow any scope for intendment. We find that our view of interpretation of the wordings, when clear and unambiguous, have to be given effect to, is in consonance and compliance to the Supreme Court Judgements, to name a few as follows, at the end of this paragraph. The ratio decidendi enunciated by the Apex Court may be applied to the wordings of the Statute to be given effect to. 2015 (324) E.L.T. 656 (S.C.) [ para 31] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... local body by virtue of a local law. For example, State Governments have setup local developmental authorities to undertake developmental works like infrastructure, housing, residential commercial development, construction of houses, etc. The Governments set up these authorities under the Town and Planning Act. Examples of such developmental authorities are Delhi Development Authority, Ahmedabad Development Authority, Bangalore Development Authority, Chennai Metropolitan Development Authority, Bihar Industrial Area Development Authority, etc. Such developmental authorities formed under the Town and Planning Act are not qualified as local authorities for the purposes of the GST Acts. 20. Now we focus on Ahmedabad Janmarg limited s eligibility to be a Government Entity or a Government Authority. Government entity has been defined at Notification 12/2017-Central Tax (Rate) dated 28-6-17(as amended from time to time) as follows: Government Entity means an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90 per cent. or mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) dated 28-6-17 is not attracted. They come into picture for reference, if AJL would qualify to be local authority/ government authority/ government entity. For this same reason, case laws of M/s. A. B. Enterprise; Shri Jayesh Anilkumar Dalal; Shri Sumitabha Ray; Sri Roopesh Kumar reliance placed by the applicant are misplaced. In the case law of Advance Ruling in M/s Arihant Dredging Developers Private Limited vide order No 49/WBAAR/2019-20 dated 10-6-19- Contract was for re-sectioning of river Jamuna which involves the earthwork in the excavation of the drainage channels and deposit of the excavated materials to locations outside the government land, a composite supply of various services, where excavation and re-excavation of the drainage channel is the principal supply. The facts of said Rulings is different from our facts in subject matter as AJL does not qualify to be Central Government or State Government or local authority or a Governmental Authority or a Government Entity. Also in the case of Advance Rulings in case of M/s PDCOR Limited, Jaipur(Raj) vide order no RAJ/AAR/2018-19/13 Dt. 25-8-18, JDA has been declared as a Governmental Authority on the grounds th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om a department or ministry , and other types of public body established by government . The functions of an agency are normally executive in character since different types of organizations (such as commissions) are most often constituted in an advisory role-this distinction is often blurred in practice however, it is not allowed. A government agency may be established by either a national government or a state government within a federal system. The term is not normally used for an organization created by the powers of a local government body. Agencies can be established by legislation or by executive powers. The autonomy, independence, and accountability of government agencies also vary widely. The term agency in India has several meanings; for example, the Cabinet and the parliament Secretariat describes itself [3] as a nodal agency for coordination amongst the ministries of the Govt. of India . Most notably as an international feature, what appear to be independent agencies (or apex agencies) include some that have active roles for Ministers: such as, the National Security Council, the Indian Council of Agricultural Research, and the Planning Commission, which is c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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