9911796707
TMI Blog2022 (1) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... der the GST Vide GSTIN 33AAAAH2788P1Z8. They have sought Advance Ruling on the following question:- 1. Whether the claim of expenses incurred to handle the Cost Free Distribution Sarees & Dhothies and Cost Free School Uniform Scheme and supply to Revenue Department/Social Welfare Department will attract 18% GST or not. 2. If yes whether the Handling Charges related to Pre-GST period 2015-16 and 2016-17 will also attract GST or not. The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicants have contended that they have been appointed and acting as a Nodal Agency to inspect and procure Cost Free Distribution Sarees & Dhothies and Cost Free School Uniform under Government Flagship Schemes. The Cost Free Distribution of Sarees and Dhothies Scheme has been introduced during the year 1983 as one of the flagship schemes by the Government of Tamil Nadu. This scheme has been continued by the Government of Tamil Nadu with the twin objectives of providing continuous employment to 14,000 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue (Rs. in lakh) 1. Handloom 2.71 244.18 2. Pedalloom 86.83 5145.07 3. Powerloom 411.58 26188.17 TOTAL 501.12 31577.42 2.2 The Uniform cloth required by Adi Dravidar and Tribal Welfare Department, Backward Classes and Minorities Welfare Department and Most Backward Classes and De-notified Communities Welfare Department are also being supplied by the Department of Handlooms and Textiles. The uniform cloth requirements of various Departments for the academic year 2020 - 2021 are furnished below: Name of the Department Total cloth requirement (in lakh metres) Number of Students Social Welfare Department (I to VIII Std.) 501.12 3924848 Most Backward Classes and De-notified Communities Department (IV to X Std.) 3.51 17517 Backward Class and Minorities Welfare Department (Backward Classes Hostel Students from IV to X Std.) 3.56 19750 AdiDravidar Department (IX to XII Std. students) 13.20 65540 TOTAL 521.39 4027655 For which Handling Charges is being paid at the rate recommended by the Permanent Standing Committee for Fixation of Handling Charges as per the G.O. No. 123 dated 05.06.2013. At present they receive the stock from the Societies, inspecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andard are given 4 sets Uniform under the Scheme Noon Meal programme every year. By the above schemes, both producer and beneficiaries are poor and their survival is ensured by these schemes. They have contended that "As per serial number 3 of the table given in GST Notification No. 12/2017 - Central Tax (Rate) Dated:28.06.2017, "Pure Services" (excluding working contract services or other composite supplies involving supply of any goods) provided to the state Government were exempted from payment of GST. As per the services rendered by M/s. Co-optex towards Handling of Dhothies and Sarees from Co-operative Societies to Public Distribution System / Revenue Department is a "Pure Service" rendered to the State Government, it is exempted from payment of GST. Therefore, handling charges, a pure service to the government, would not attract GST and the GST claim is inadmissible. 3.1 Due to the prevailing PANDEMIC situation and in order not to delay the proceedings, the applicant was addressed through the Email Address mentioned in the application to seek their willingness to participate in a virtual Personal Hearing in Digital media. The applicant consented and the hearing was held on 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and Dhoties Scheme and Free Uniform Scheme. 4. To find out correctness of the claim for Handling Charges with reference to manpower deployed and the salary and wages actually incurred etc., 5. To find out the correctness of usage of manpower as to whether more number of persons were deployed over and above the requirement. 6. To verify the rate of freight, cartage of cooly with reference to the quantum of Sarees and Dhoties and Uniform Materials handled and with reference to the connected vouchers and to find the correctness of the rates with reference to the rates prevailed during the last year and the market rate for the reference period. 7. To verify the claim made towards rent with reference to the number of Godowns operated, the actual requirement of Godowns, the rent agreement entered with the godown owners, the correctness of rent claimed with reference to the market rent prevailing in the particular area. 8. To verify the claim of travelling allowances and conveyance as to their correctness in terms of rates, whether the claims are made in connection with the travel made by the manpower deployed, whether the travel was made in connection with Free Distribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 243 G of the Constitution and functions entrusted to a Municipality under Article 243 W of the Constitution as enumerated in their application; thus, these services are eligible for the benefit of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 and thus no GST is Payable. 6.1 We have considered the application filed by the applicant and various submissions made by them as well as the comments of the State and Central Tax officers. The applicants have stated that they have been appointed and acting as a Nodal Agency to inspect and procure Cost Free Distribution Sarees & Dhothies and Cost Free School Uniform under Government Flagship Schemes. They have sought ruling on the following questions:- 1. Whether the claim of expenses incurred to handle the Cost Free Distribution Sarees & Dhothies and Cost Free School Uniform Scheme and supply to Revenue Department/Social Welfare Department will attract 18% GST or not. 2. If yes whether the Handling Charges related to Pre-GST period 2015-16 and 2016-17 will also attract GST or not. It is observed that the applicant seeks to clarify whether they are eligible to claim the benefit of exemption at SI.No. 3 of Notification No. 12/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment or union territory or local 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 NIL NIL From the above, it is seen that the entry is applicable to,- * All Pure Services; * Provided to the Central/State Government or Union territory or Local authority; * By way of any activity; * In relation to any function entrusted to ;- o A Panchayat under Article 243G of the Constitution or ; o A Municipality under Article 243 W of the Constitution. Thus, the entry applies to Pure services provided to the defined clause of service recipients and the services are to be of any activity in relation to any function entrusted to a Panchayat/Municipality under Article 243 G/243W of the Constitution. 8.1 In the case at hand, it is seen that the applicant is entrusted with the work of undertaking quality check of the clothes, procurement, storage of the goods in warehouses and transport the uniforms/ sarees and dhothies for distribution to the designates places. For undertaking all these activities, they are pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of India are listed here under:- Eleventh Schedule (Article 243-G) 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. 16. Poverty allevation programme. 17. Education, including primary and secondary schools. 18. Technical training and vocational education. 19. Adult and non-formal education. 20. Libraries. 21. Cultural activities. 22. Markets and fairs. 23. Health and sanitation, including hospitals, primary health centres and dispensaries. 24. Family welfare. 25. Women and child development. 26. Social we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on systems - through which Sarees / Dhothies are distributed to the Ration Card Holders and SI. No. 17 Education including Primary and Secondary Education in relation to distribution of School Uniforms to the Children availing 'Noon Meal Scheme'. The implications of the term 'in relation to' is more tilted towards nexus, inseparability and identity of the activities involved with the functions. In the case at hand, the activities of the applicant, i.e., handling of Dhoties and Sarees/ School Uniforms from Co-Operative societies to public distribution system/ Revenue Department are definitely 'in relation to' the functions entrusted to a Panchayat under Article 243G/ municipality under Article 243W of the constitution of India. 8.4 To sum up, we find that the activities of 'Handling' carried out by the applicant in respect of Free distribution of Sarees and Dhothies and the School Uniform to the students of class 1 to 8 under 'Noon Meal Scheme' are activities in relation to the functions entrusted to Panchayats/Municipality in the Article 243 G/243W and the applicant supplies these services to the State Government and therefore, the exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
