GST Exemption for Services under PMAY and SUDA

The services provided by M/s. Saryu Babu Engineers For Resource Development to the State Urban Development Authority (SUDA) and under the Pradhan Mantri Awas Yojna (PMAY) qualify as activities related to functions entrusted to Panchayat or Municipality under Article 243G or 243W of the Constitution of India. Additionally, these services are considered "Pure services" and are exempt from GST under Notification No. 12/2017-Central Tax (Rate) and corresponding notifications under the UPGST Act.

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Issues Involved:

1. Qualification of Project Development Service and Project Management Consultancy services as activities related to functions entrusted to Panchayat or Municipality under Article 243G or 243W of the Constitution of India.
2. Eligibility of these services as "Pure services" under Notification No. 12/2017-Central Tax (Rate) for exemption from GST.

Issue-wise Detailed Analysis:

1. Qualification of Services under Article 243G or 243W:

The applicant, M/s. Saryu Babu Engineers For Resource Development, sought an advance ruling on whether the Project Development Service (Detailed Project Report Service) and Project Management Consultancy services (PMCS) provided to the State Urban Development Authority (SUDA) and under the Pradhan Mantri Awas Yojna (PMAY) qualify as activities related to functions entrusted to Panchayat or Municipality under Article 243G or 243W of the Constitution of India.

The Authority examined the purpose and scope of work under the contracts with SUDA and PMAY. SUDA, as a state-level nodal agency, is involved in urban poverty alleviation, which includes identifying urban poor, formulating and implementing schemes for their benefit, and reviewing the progress of these activities. PMAY aims to provide central assistance for urban housing and slum rehabilitation, which aligns with functions listed in the 11th and 12th schedules of the Constitution, such as urban planning, poverty alleviation, and slum improvement.

The scope of work for the applicant under these contracts includes detailed project reporting, physical verification, data collection, and project management, which are in direct relation to the functions entrusted to Panchayats and Municipalities. Thus, the services provided by the applicant under these contracts qualify as activities related to functions entrusted to Panchayat or Municipality under Article 243G or 243W.

2. Eligibility as "Pure Services" for GST Exemption:

Given the affirmative ruling on the first question, the second issue addressed whether these services qualify as "Pure services" under Notification No. 12/2017-Central Tax (Rate), as amended by Notification No. 2/2018-Central Tax (Rate), and corresponding notifications under the UPGST Act, thus being eligible for exemption from GST.

The Authority examined the sample contract and scope of work, concluding that the services provided by the applicant are indeed "Pure services" as they do not involve works contract services or composite supplies involving the supply of goods. The services include project management, data collection, and reporting, which are purely service-oriented activities without any supply of goods.

Therefore, these services qualify for exemption from GST under serial number 3 of Notification No. 12/2017-Central Tax (Rate), dated 28 June 2017, as amended, and corresponding notifications under the UPGST Act.

Rulings:

1. The services rendered under the contract with SUDA and for PMAY are in relation to functions entrusted to Municipalities under Article 243W and to Panchayats under Article 243G of the Constitution of India.
2. Such services qualify as "Pure services" and are accordingly exempt from the payment of GST under Notification No. 12/2017-Central Tax (Rate), dated 28 June 2017, as amended, and corresponding notifications under the UPGST Act.

Validity:

This ruling is valid within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh and subject to provisions under Section 103(2) of the CGST Act, 2017, until declared void under Section 104(1) of the Act.

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