TaxTMI 
TaxTMI 
2021 (9) TMI 1066
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.... GST law? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression `GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by the applicant are as under:- 1.1. Maharashtra Jeevan Pradhikaran (hereinafter referred as MJP) has appointed Mekorot Development & Enterprise Ltd, the applicant (MDE) as a consultant for study, survey, drafting and formation of Water Supply Master Plan (WSMP) to address the water drought problem in the Marathwada region and assist the Government of Maharashtra (GOM) to make a comprehensive strategy to solve the Marathwada (Aurangabad division) Water Crisis permanently. 1.2. MDE is a fully owned subsidiary of Mekorot, the national water company of Israel which is fully owned by the Government of Israel. 1.3. MJP is a Government of Maharashtra und....
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.... 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.". MJP being set up by a State Government Act; also the state of Maharashtra has 100% control over the functions and decision of MJP 1.3 Reference can be made to a recent judgment of AAR - Madhya Pradesh (Order no. 15/2018 dated 18-10-2018) where Madhya Pradesh Power Generating Company Limited, which was 100% owned by the government of Madhya Pradesh, was classified as a Government entity within the ambit of GST law. 1.4 In view of the above, it can be concluded that MJP is nothing but a wholly owned and controlled organization of the Maharashtra State Government and hence, can be termed as a Government entity within the ambit of GST law. Hence, all services provided to MJP can be said to be provided to a Government entity and tax waiver benefits under GST law shall be available. QUESTION - 2: WHETHER THE WORK INTENDED TO BE CARRIED OUT BY MDE QUALIFIES FOR EXEMPTION AS PER NOTIFICATION 12/2017- C.T.(RAT....
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.... Twelfth Schedule to Article 243W of the Constitution are as under: (e) Water supply for domestic, industrial and commercial purposes". 2.7 MJP is intending to have a detailed analysis of a drought prone area and work towards the supply of water for domestic, industrial and commercial usage. Thus, the initiative taken by MJP is well within the ambit of clause 'e' of the article 243 W. 2.8 Hence, service provided by MDE to MJP are forming part of the entry 'e' of the article 243W of the constitution 2.9 As per (Entry 3) of Notification 12/2017 CGST read with Notification 02/2018 CGST, services provided to a government entity which are in line with the article 243 W or 243 G shall be entitled to NIL rate of GST. The extract of the notification is reproduced below for quick reference:- Sl.No. Chapter, Section, Heading, Group or service code (Tariff) Description of Services Rate(percent.) Condition 3 Chapter 99 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 or a Government entity by way of any act....
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....at under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution The water management service in marathwada area falls within ambit of article 243 W QUESTION - 3: IF IT IS CONCLUDED FROM THE ABOVE THAT THE SUPPLIES MADE OR PROPOSED TO BE MADE BY MDE TO MJP QUALIFIES FOR EXEMPTION THEN THE CONSEQUENT QUESTION IS WHETHER MDE REQUIRES TO OBTAIN REGISTRATION UNDER GST LAW? 3.1 As concluded above, service provided by MDE to MJP is exempt from GST tax levy vide Notification 12/2017. As per Section 23 (1) (a) of the CGST Act, 2017, if an entity is providing fully exempt service, than the entity need not take registration under GST law. Section 23 (1) (a) is replicated below: "23. (1) The following persons shall not be liable to registration, namely:- (a) any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act; (b) an agriculturist, to the extent of supply of produce out of cultivation of land". 3.2 MDE may not be mandated to take GST registration based on ....
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....Plan (WSMP) and short term relief measures and create a Preliminary Design Report (PDR) based on the options selected by MJP from the WSMP. 5.5 As per the agreement, the Water Supply Master Plan (WSMP) is a long-term and comprehensive planning, for supply of water to certain region, which consists of investigation of the available water potential of all types of water and describes all works required in next 20-30 years for each consumption sector (domestic, industry and agriculture). Further, alternative development sequences may be identified to provide target service coverage and standards at affordable cost and designs and estimates are prepared approximately and finally, parameters are finalized so that advance actions could be taken. The master plan would also be updated periodically, or when the key attributes of the region/area changed significantly. 5.6 In view of the submissions made by the applicant we take up the second question for discussion, i.e. whether the work intended to be carried out by the applicant qualifies for exemption as per Notification No. 12/2017-C.T.(Rate) dated 28.06.2017. 5.6.1 The relevant Entry No. 3 of Exemption Notification No. 12/2017 dated ....
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....tity. 5.6.7 With respect to the above question we need to have a look at Notification No. 31/2017 Central Tax (Rate) dated 13th October, 2017. The relevant provisions pertaining to the present case are 31/2017 Central Tax (Rate) dated 13111 October, 2017 which are mentioned in Notification No. reproduced as under:- Notification No. 31/2017-Central Tax (Rate) dated the 13th October, 2017 G.S.R (E).- In exercise of the powers conferred by sub-section (1) of section 9, sub-section (1) of section 11,sub-section (5) of section 15 and sub-section (1) of section 16 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No.11/2017- Central Tax (Rate), dated the 281hJune, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 690(E), dated the 28thiune, 2017, namely:- In the said notification, (i) in the Table, - (a) Against serial numb....
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....t a function entrusted by the Central Government, State Government, Union Territory or a local authority." 5.6.9 Maharashtra Water Supply and Sewerage Board (MWSSB) was established as per MWSSB Act 1976 for Rapid development and proper regularization of water supply and sewerage services in the State of Maharashtra, by the Government of Maharashtra. MWSSB was subsequently named as Maharashtra Jeevan Pradhikaran in 1997. The Principal responsibilities of Maharashtra Jeevan Pradhikaran according to MWSSB Act 1976 are : Planning, designing and implementation of water supply and sewerage schemes including facilitation for necessary financial provisions, as directed by the Government of Maharashtra (Government of Maharashtra); taking over any water supply as well as sewerage scheme for operation and maintenance; to establish service level bench marks for water supply and sewerage sector; to extend relevant support, regarding water sector, to Government of Maharashtra as well as Local Self Governments; to support Government of Maharashtra to prepare Annual Plan and to establish / modify tariff / tax / cess structure in water sector. Therefore, the Maharashtra Jeevan Pradhikaran is also ....
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....to be registered under this Act in the State or Union Territory, other than special category States, from where he makes a taxable supply of goods or services or both. if his aggregate turnover in a financial year exceeds twenty lakh rupees. Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees. 5.7.3 Further, as per Section 23 (1) (a) of the CGST Act, 2017, any person engaged exclusively in the supplying of goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the IGST Act, 2017 is not liable for registration. 5.7.4 Thus, the applicant would be liable to obtain GST registration only if it supplies taxable good or services or both, in view of Section 22(1) mentioned above and in view of Section 23 (1) (a), no registration is required to be obtained by the applicant when it exclusively supplies goods or services or both that are not liable to tax or wholly exempt from tax under the CGST Act, 2017 or under the IGST Act, 2017. 5.7.5 The applicant has submitte....