9911796707
TMI Blog2025 (5) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. At the outset, we would like to make it clear that the provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act are in pari materia and have the same provisions in like matters and differ from each other only on few specific provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act, 2017 would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act, 2017. 2. M/s. Kannivadi Town Panchayat (hereinafter 'the Applicant') submitted a copy of payment receipt vide reference No. 24073300285612 on 18.07.2024 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. The online application form for advance ruling was filed on 27th Aug, 2024 and the physical application was 16th Sep, 2024 as mandated under Rule 107A. 3. The applicant in the statement of relevant facts has narrated as below: * M/s Kannivadi Town Panchayat is a Panchayat as defined under cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services. * As per Notification No. 14/2017-CT (Rate) dated 28th June, 2017, "Services by way of any activity in relation to a function entrusted to a Panchayat under Article 243G of the Constitution (or to a Municipality under Article 243W of the Constitution), is not a service". * The activity of the applicant will fall under the functions entrusted to a panchayats under the Eleventh Schedule to Article 243G of the constitution under (22) Markets and Fairs out of 29 functions listed under the schedule. * The applicant quoted some of the Sections of The Tamilnadu District Municipalities Act, 1920 relating to 'Provision of Cart-stands, Powers, Authority and responsibilities of the Municipalities, public servant etc.' * The applicant has cited the decision of AAAR, Tamilnadu orders AAAR/21/2021(AR) dated 01.12.2021 and AAAR/20/2021 (AR), dated 01.12.2021. Comments by State and Centre Authorities: 5. The applicant falls within the administrative jurisdiction of 'STATE', and the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viding the functions entrusted to a Panchayat under Eleventh Schedule to Article 243G of the Constitution. They are rendering these functions directly as well as through contractors, by way of tender process. One such activity done through tender contractor is collection of entry fees for selling vegetables, fruits, birds and animals etc. for venders/ farmers/ public in the open space/temporary tents on the days fixed for weekly market days. They claim that the activity of giving the right to collect entry fees in the weekly market as per the prescribed conditions of tender. 7.2. The applicant required advance ruling on i) Whether the activity of leasing of weekly market to the tender contractors for the purpose collection of fee on the week market days basis from the merchants/ farmers/ public for usage of the open space for selling of fruits / vegetables / domestic animals / birds etc. is an activity covered under the function entrusted to Panchayat under the ELEVENTH SCHEDULE under Article 243G as a local authority in which we are engaged as public authority. ii) If so the above activity shall not be treated as a supply of service and in that case the same is covered as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usted to Panchayat' under article 243G of the constitution shall neither be treated as supply of goods not supply of services. The notification is reproduced below. In exercise of the powers conferred by sub-section (2) of section 7 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council hereby notifies that the following activities or transactions undertaken by the Central Government or State Government or any local authority in which they are engaged as public authority, shall be treated neither as a supply of goods nor a supply of service, namely :- "Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of the Constitution." 2. This notification shall come into force with effect from the 1st day of July, 2017. 7.7 Article 243G of the Constitution of India prescribes the powers, authority and responsibilities of Panchayats and lists the functions entrusted to them in the Eleventh Schedule to the article. Of the Twenty Nine functions of a Panchayat listed, the activity of the applicant would fall under "22. Market and Fairs". 7.8 From the detailed submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Notification No. 14/2017-CT (Rate) dated 28-06-2017, as amended as 'neither a supply of goods nor a supply of services' and out of purview of GST and the notification is available for the Contractor also provided the same are rendered as back to back services to the applicant. 9. 'Back to back contract' or agreement is a one where a main contractor pass on his obligations, responsibilities and liabilities to their sub-contractors bound by the same terms and conditions. Since a government cannot involve directly in all the functions entrusted to them, they may enter into back to back contract either partially or fully to complete the functions in a timely manner. Mainly this type of back to back contracts are provided to the sub-contractors to ensure smooth execution of the process without any hustle. 10. Based on the above discussion, we rule as under. RULING Based on the facts, records and evidences submitted along with the application, the queries are answered as follows. (i) The activity of leasing, to the tender contractor, the right to collect entry fees, for sell vegetables, fruits, birds and animals etc. for venders/ farmers/ public in the open space / tempora ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
