TMI Blog2022 (9) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... the exemption under entry No. 3 of Notification No. 12/2017-CT (Rate). Availability of ITC - HELD THAT:- The applicant is receiving services from the Registered Taxable person of same line of the business for rendering the car hiring service to the Ahmedabad Municipal Corporation. ITC shall be available on the input services used for making an outward taxable supply of the same line of business. Thus the applicant is eligible to avail the Input Tax Credit on receipt of the service from the same line of business entity subject to the condition prescribed under Notification No. 11/2017-CT (Rate) - in terms of the provision of 17 (5) (b) and entry No. 10 of Notification No. 11/2017-CT (Rate) dated 28-6-17 as amended hold that the applicant is eligible of ITC on receipt of the direct service from the same line of business subject to the conditions specified therein. Whether Direct input services of the same line of business received by the 'service provider' to render the above services as stated in work order No.445/1 dated 01-11-21 issued by Ahmedabad Municipal Corporation is also exempt? - HELD THAT:- The question of levy of GST is in relation to supply of Motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies 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; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule. 6. Further it is submitted that Sr. No. 6 of Twelfth schedule of article 243W of constitutions states as Public Health, Sanitaion Conservancy and Solid Waste Management. The copy of Twelfth schedule is attached here with for ready reference. 7. The applicant has submitted that Ahmedabad Municipal Corporation has stated in the work order bearing no. 445/1 dated 01-11-2021 that Car hiring services is exclusively used for transporting their health and administration department team for the purpose of prevention and cure of Covid-19 third wave and other public health care related services. Further, it is submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices from the same line of business for rendering the Car Hire services to Ahmedabad Municipal Corporation as per work order No.445/1 dated 01-11-21. 5. Whether Direct input services of the same line of business received by the service provider to render the above services as stated in work order No.445/1 dated 01-11-21 issued by Ahmedabad Municipal Corporation is also exempt. Personal Hearing: 11. Virtual hearing granted on 5-4-22 was attended by Shri Saiyum Khan Pathan, CA and he reiterated the submission. Further, Virtual hearing was granted on 02-08-2022, the representative of the applicant vide mail dated 2-8-22 has requested that on the basis of written submission as well submission made in the hearing made earlier release, the order at the earliest. 12. Authority of Advance Ruling has written a letter No Nil dated 12-05-22 to the The Joint Director (Mechanical), Ahmedabad Municipal Corporation, Ahmedabad for the clarification in the subject matter. The same is reproduced as under: 2. With reference to subject it is requested to clarify the following : (i) Is the subject hiring service supplied by M/s Varun to AMC being utilised in relation to the Mun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 243 W of the constitution includes Public Health, sanitation, conservancy and solid waste management hence it does not fall under Sr. No. 6 (Public Health) of Twelfth Schedule of the article 243W of the constitution. Comments on Question No. 2 B. As comments given in point (1) services provided by the applicant does not fall under Sr. No. 6 (Public Health) of Twelfth Schedule of the 243W of the constitution hence it also does not fall under exempted category of services as stated in Sr. No. 3 of Notification No. 12/2017-CT (Rate) dated 28-6-17, chapter 99 Pure service (excluding works contract service or other composite supplies involving supply of any goods) provided to Government, a local authority or a Government Authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or to any function entrusted to a Municipality under Article 243 G of the Constitution is exempted services. Comments on Question No. 3 C. It depends on the actual requirements of the recipient hence no comments required. Comments on Question No. 4 D. Input tax credit can be claimed after fulfilling the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y their own expenses. 25. These contract rate of motor vehicles are for requirement of corona period and other fortuitous emergency requirement. These contract rate are not for regular requirement of motor vehicle. Appendix -1 Tender Name :- Providing Different type / Category vehicles on rental rate contract base emergency work as per tender terms - conditions and requirements of AMC. Part A : Tempo Traveller Part B: AC Innova/ Maruti Ertiga Part C : AC Car (Seating Capacity 1+5) Part D : Dead Body Vehicle Part E : Ambulance Van with Oxygen, Stretcher and attendant 15.1 We find that AMC has issued tender / Bid for hiring of different types of Motor Vehicles for Emergency base work and in the Tender it is specifically mentioned that these contract rate of hiring Motor vehicle is for corona period and other emergency basis work. Further, AMC has issued work Order No. 445/1 dated 1-11-21 to the applicant and free English translation of work order is as follows: In reference to above captioned subject you are being informed that you had participated in the publicly published e tender for providing Air Conditioned Vehicles on rent at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 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 15.3 We hold that for the applicant service to fall under entry at 3 of said NT, the following criteria is to be satisfied: a. Supply shall be Pure Service excluding works contract service or Composite supply of any goods. b. Service Recipient shall be Central/State Government or the Union Territory or a local authority. c. Supply shall be 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. 16. The phrase pure service has not been specifically defined in any of the notifications/circulars. However, in common parlance, pure services in this context would intend to cover all the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanning 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 management. (7) Fire services. (8) Urban forestry, protection of the environment and promotion of ecological aspects. (9) Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. (10) Slum improvement and upgradation. (11) Urban poverty alleviation. (12) Provision of urban amenities and facilities such as parks, gardens, playgrounds. (13) Promotion of cultural, educational and aesthetic aspects. (14) Burials and burial grounds; cremations, cremation grounds and electric crematoriums. (15) Cattle pounds; prevention of cruelty to animals. (16) Vital statistics including registration of births and deaths. (17) Public amenities including street lighting, parking lots, bus stops and public conveniences. (18) Regulation of slaughter houses and tanneries. It transpires from above that the functions entrusted to a municipality as listed in the Twelfth Schedule include the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, we hold that the applicant supply do not cover under the work listed in the Twelfth Schedule in relation to functions entrusted to a municipality under Article 243W of the Constitution of India and is not eligible to the exemption under entry No. 3 of Notification No. 12/2017-CT (Rate) 18. The applicant in their application has not submitted any details with regard to question No. 3, 4 and 5. We take up question No. 3, 4 and 5 one by one. 18.1 We find that question No. 3 does not cover under the questions (a) to (g) of Section 97 (2) of CGST Act on which this Authority can pronounce the Ruling. Thus, to give Ruling on question No. 3 is out of the jurisdiction of this Authority and is not maintainable. 18.2 We take up the question 4 for discussion. We find that the applicant is receiving services from the Registered Taxable person of same line of the business for rendering the car hiring service to the Ahmedabad Municipal Corporation. In this regard, we refer to the provision of Section 17 (5) of CGST Act, stipulate that, Section 17 (5) CGST Act (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is eligible to avail the Input Tax Credit on receipt of the service from the same line of business entity subject to the condition prescribed under Notification No. 11/2017-CT (Rate). Relevant Entry No. 10 of Notification No. 11/2017-CT (Rate) dated 28-6-17 is reproduced as under : 10 Heading 9966 (Rental services of transport vehicles) (i) Renting of motorcab where the cost of fuel is included in the consideration charged from the service recipient. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)] 18.4 Notification No. 11/2017-CT (Rate) dated 28-6-17 amended vide Notification No. 31/2017-CT (Rate) dated 13-10-2017 is reproduced as under : against serial number 10, for item (i), in columns (3), (4) and (5) and the entries relating thereto, the following shall be substituted, namely : - (3) (4) (5) (i) Renting of any motor vehicle designed to carry passengers where the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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