2020 (11) TMI 1029 - AAR - GST

Applicant ineligible for GST exemption on work order from Rajya Gramin Ajivika Mission

The applicant, Centre for Entrepreneurship Development MP (CEDMAP), was found ineligible for the benefit under Entry No. 3 of Exemption Notification No. ... Levy of GST - work order received by the applicant from the Lila Panchayat. Singrauli under Madhya Pradesh Deendayal Antyodaya Yojana. State Rural Livelihood Mission. Panchayat & Rural Development Department. Govt. of M.P. for providing Skill. Training to the youth in the district of Singrauli in Tourism and Hospitality, Healthcare, Retail, IT-ITES and Construction sector - Entry No. 3 of Exemption Notification No. 12/2017-Central Tax (Rate). dated 28th June 2017 - work order received by the applicant from Jila Panchayat, Singrauli under Madhya Pradesh Deendayal Antyodaya Yojana. State Rural Livelihood Mission. Panchayat & Rural Development Department. Govt. of M.P. for providing Skill Training to the youth in the district of Singrauli in Tourism and Hospitality. Healthcare, Retail - HELD THAT:- It is evident that the work order is not issued by Jila Panchayat as claimed by the Applicant but has been issued by M.P. DAY Rajya Gramin Ajivika Mission. Therefore, services shall be deemed to be have been provided to M.P. DAY Rajya Gramin Ajivika Mission. It is not covered in the definition of local authority. Now. it is to be examined whether M.P. DAY Rajya Gramin Ajivika Mission is covered under governmental authority or government entity. The applicant has been asked to submit the constitution of M.P. DAY Rajya Gramin Ajivika Mission so as to examine whether it is covered under governmental authority or government entity. However, the applicant's could not give requisite information about constitution of M.P. DAY Rajya Gramin Ajivika Mission and how the Exemption is available to the applicant under entry no. 3 to Notification No. 12/2017 CT (Rate) dated 28th June 2017. The Applicant is not eligible to get benefit covered under the entry no 3 of Exemption Notification No. 12/2017 Central Tax (Rate) dated 28th June 2017 for the work order for which ruling has been asked for. Issues Involved:1. Whether the work order received by the applicant from the Jila Panchayat, Singrauli under the Madhya Pradesh Deendayal Antyodaya Yojana, State Rural Livelihood Mission, Panchayat & Rural Development Department, Govt. of M.P. for providing Skill Training to the youth is covered under Entry No. 3 of Exemption Notification No. 12/2017-Central Tax (Rate), dated 28th June 2017.2. Whether Goods & Service Tax is payable on the work order received by the applicant from Jila Panchayat, Singrauli under the Madhya Pradesh Deendayal Antyodaya Yojana, State Rural Livelihood Mission, Panchayat & Rural Development Department, Govt. of M.P. for providing Skill Training to the youth.Issue-wise Detailed Analysis:Issue 1: Applicability of Entry No. 3 of Exemption Notification No. 12/2017-Central Tax (Rate)The applicant, Centre for Entrepreneurship Development MP (CEDMAP), received a work order from Jila Panchayat, Singrauli for providing Skill Training to youth under various sectors. The applicant contended that the services provided fall under Entry No. 3 of Exemption Notification No. 12/2017-CT (R), which exempts 'Pure services (excluding 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 or a Governmental authority [or a Government Entity] 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.'The key conditions for exemption under Entry No. 3 are:1. Pure Service.2. Exclusion of works contract and composite supply.3. Provided to the Central Government, State Government, Union territory, local authority, Governmental authority, or Government Entity.4. Any activity in relation to any function entrusted to a Panchayat under Article 243G or a Municipality under Article 243W.The applicant argued that their services qualify as 'Technical training and vocational education' under Entry No. 18 of the Eleventh Schedule to the Constitution, which is a function entrusted to Panchayats under Article 243G. The applicant also emphasized that the services provided are pure services and do not involve works contract or composite supplies.Issue 2: Liability to Pay Goods & Service TaxThe applicant claimed exemption from GST based on the work order being covered under Entry No. 3 of Notification No. 12/2017-CT (R). The Department's viewpoint, however, indicated that the exemption would apply if the services provided are covered under 'Technical training and vocational education' and are pure services.Upon examination, it was found that the work order was issued by M.P. DAY Rajya Gramin Ajivika Mission, not Jila Panchayat, Singrauli. The mission is not covered under the definition of a local authority. The applicant failed to provide sufficient information about the constitution of M.P. DAY Rajya Gramin Ajivika Mission to ascertain if it qualifies as a governmental authority or government entity.Ruling:1. The applicant is not eligible for the benefit under Entry No. 3 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 for the work order in question.2. The applicant is liable to pay Goods & Service Tax on the work order for which the ruling was requested.This ruling is valid subject to the provisions under section 103 (2) until declared void under Section 104 (1) of the GST Act.