TMI Blog2023 (12) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the municipal or local fund, is a proposition difficult to agree with. The appellant is neither a Municipal Committee, nor a Zilla Parishad nor a District Board. Now, as far as 'other authority' which is legally entitled to/entrusted by the Central/State Government with the control/management of a municipal or local fund is concerned, though they are granted Central funds as loan by AMC the appellant is not in control/management of a municipal/local fund - the appellant is not a 'local authority'. Ongoing through sections 25 to 29A, 342, 355 and 357, ibid, it is found that AMTS is a statutory authority discharging municipal functions as stipulated under the GPMC Act. It is on this ground that GAAR held AMTS to be a local authority. While relying on the advance ruling in the case of AMTS, the appellant failed to point out as to under which section of the GPMC Act the Ahmedabad Janmarg Limited was incorporated as a Public Limited Company and was entrusted with the Municipal functions of providing transportation facilities. Thus there is clear cut distinction as far as AMTS is concerned which is a statutory authority in terms of the GPMC Act, which incidentally is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . extended arm; that it does the activities as per the functions entrusted to Municipal Corporation; that it is established and managed by AMC that majority of its employees at top management are sent on deputation by AMC; that appellant is part of centrally funded scheme the lead planning implementing agency for all the practical purpose is AMC. that allotment of land for creating BRTS stations/providing space for parking of buses or managing day to day affairs of BRTS, AMC has played pivotal role; that AMC receives grants from various sources for operations/capital needs and deploys the funds for BRI'S operations; that since the appellant manages the fund provided by AMC, it can be construed to control/ manage local or municipal fund; that it is essential for the appellant to avail services of security contractors to ensure the safety of buses and smooth How of traffic; that the transportation services would falls under the ambit of provision of urban amenities and facilities listed under the 12th schedule; that the term in relation to' used in SI. No. 3 of exemption notification No. 12/2017-CT (Rate) dated 28.6.2017 is wide enough to cover every services that results in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Goods and Services Tax Act, 2017 in Part A, can be it construed to be a government entity or a governmental authority? 8. The GAAR vide its order No. GUJ/GAAR/R/27/2021 dated 19.07.2021, gave the following ruling to the aforementioned questions: 1. Ahmedabad Janmarg Limited is not a Local Authority. 2. Ahmedabad Janmarg Limited is liable to pay GST on security services under RCM, as per relevant Notification. 3. Ahmedabad Janmarg Limited is liable to pay GST on advertisement services supplied by it. 4. Ahmedabad Janmarg Limited is not required to be registered as a deductor under GST. 5. Ahmedabad Janmarg Limited is not a Government Entity/ Governmental Authority. 9. Being aggrieved with the aforementioned Ruling, the appellant has preferred the present appeal raising the following grounds: the appellant was created as an SPV for the purpose of BRTS under the direction of Gol; that AMC had obtained permission from the Dy. Secretary, Urban Development Urban Housing Department. GoG which substantiates that the appellant was established by the Government; that the entire shareholding is being held by AMC; that 90% or more participation by way of equity is by the Government; that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ]. 10, During the course of personal hearing held on 26.07.2023, Shri Hardik Shah, CA, Shri Pranav Barot and Ms Shweta Jain appeared on behalf of the appellant. He reiterated the written submissions made in the appeal. Discussions and Findings: 11. We find that the primary issue to be decided is whether the appellant is a 'local authority' as claimed by the appellant. As an alternate plea, the appellant claims that they may also be considered as a 'Government entity' or a 'Governmental authority'. The rest of the issues being a corollary to the primary issue. 12. Before dwelling on to the issue it would be prudent to reproduce the relevant extracts of the section, notifications etc. for ease of reference viz o Local Authority has defined under section 2(69) of CGST Act. 2017 (69) local authority means- (a) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of specific services (Nil Rated) Amendment to Notification No. 12/2017-C.T. (Rate) In the said notification, in the Table, - (a) against serial number 3, in the entry in column (3), after the words a Governmental Authority the words or a Government Entity shall be inserted; o Notification No. 16/2021-CT (Rate) dated 18.11.2021 Exemption from CGST on intra-State supply of specified services (Nil Rated)- In the said notification, in the TABLE, - (i) against serial number 3, in column (3), in the heading Description of Services , the words or a Governmental authority or a Government Entity shall be omitted; o Notification No. 13/2017-CT (Rate) dated 2S.06.2017 Payment of CGST on specified services on Reverse Charge basis TABLE SI. No. Category of Supply of Services Supplier of service Recipient of Service (1) (2) (3) (4) 5 Services supplied by the Central Government, State Government, Union territory or local authority to a business entity excluding. (1) renting of immovable property, and (2) services specified below- (i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and agency services provided to a person other than Central Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central funds, which is routed through AMC, they are in control/management of the municipal or local fund, is a proposition difficult to agree with. The appellant is neither a Municipal Committee, nor a Zilla Parishad nor a District Board. Now, as far as 'other authority' which is legally entitled to/entrusted by the Central/State Government with the control/management of a municipal or local fund is concerned, though they are granted Central funds as loan by AMC the appellant is not in control/management of a municipal/local fund, 17. In view of the foregoing, and in terms of para 18.2 of the impugned GAAR's order of which we are in complete agreement, we hold that the appellant is not a 'local authority'. 18. We find that the appellant has relied upon two advance rulings, to substantiate their averment that they are a local authority viz [i] AMC [Ruling No. GUJ/AAR/R/13/21 dtd 27.1.21] and [ii] Vidarbha Infotech P Ltd (Ruling No. GST-ARA-131 /18-19/B-70 dtd 13.6.19], Having gone through both the rulings, we find it apt to reproduce the following from the said ruling viz o AMC [Ruling No. GUJ/AAR/R/13/21 dtd 27.1.21] 66. From the perusal of the above discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1960. 5. Clause (1A) was and was deemed always to have been inserted by Guj. 5 of 1970, s. 2 (1) Ongoing through sections 25 to 29A, 342, 355 and 357, ibid, we find that AMTS is a statutory authority discharging municipal functions as stipulated under the GPMC Act. It is on this ground that GAAR held AMTS to be a local authority. While relying on the advance ruling in the case of AMTS, the appellant failed to point out as to under which section of the GPMC Act the Ahmedabad Janmarg Limited was incorporated as a Public Limited Company and was entrusted with the Municipal functions of providing transportation facilities. Thus there is clear cut distinction as far as AMTS is concerned which is a statutory authority in terms of the GPMC Act, which incidentally is not the case with the appellant as far as the present dispute is concerned. In view of the foregoing, the reliance on the aforementioned ruling is not legally tenable, the facts being different. o Vidarbha Infotech P Ltd [Ruling No. GST-ARA-131/18-19/B-70 dtd 13.6.19] Governments Resolution As per Nagpur city Municipal Corporation Act. 1948, section 58 B thereof, the Corporation can implements its duties allotted by the Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r RCM, in terms of exemption notification Nos. 12/2017-CT(Rate) dated 28.6.2017, and 9/2017-IGST (Rate) dated 28.6.2017, as amended, the appellant's first argument is that they are a 'local authority'. In the preceding paragraphs, we have already held that the appellant is not a local authority. The alternate plea is that they are also a 'Government entity' or a 'Governmental authority'. We have reproduced the basic notification viz 12/2017-CT (Rate) with all its amendments. We find that notification No. 9/2017-IGST (Rate) has undergone similar amendments and for brevity we have not reproduced the same. What is evident is that vide notification No. 16/2021-CT (Rate) dated 18.11.2021, the words 'Governmental authority' or a 'Government Entity' stand omitted. In view of the aforementioned omission, we find that it would be an academic exercise to examine whether the appellant would fall within the ambit of 'Government entity' or a 'Governmental authority' [in respect of the period post the amendment] as no benefit would accrue to the appellant even if this authority were to rule in favour of the appellant in view of the word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made if the location of the supplier and the place of supply is in a Slate or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient. Explanation -For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the central tax, State tax. Union territory tax. integrated tax and cess indicated in the invoice. o Notification No. 50/2018 -Central Tax dated 13.9.2018 In exercise of the powers conferred by sub-section (3) of section 1 of the Central Goods and Services Tax Act. 2017 (12 of 2017) and in supercession of the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 33/2017-Central Tax. dated the 15th September, 2017, published in the Gazette of India. Extraordinary, Part II, Section 3, Sub-section (i) vide number GSR. 1163(E), dated the 15th September. 2017, except as respects things done or omitted to be done before such supersession, the Centeral Government hereby appoints the 1st day of October. 2018, as the date on which the provisions of section 51 of the said Act shall come into force with respect to persons specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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