Ruling: Services to CMWSSB qualify as 'Pure Services' to 'Governmental Authority' under Constitution

The Authority for Advance Ruling determined that the services provided by the Applicant to Chennai Metro Water Supply and Sewerage Board (CMWSSB) qualify as 'Pure Services' rendered to a 'Governmental Authority' in relation to functions entrusted to a municipality under Article 243W of the Constitution. Consequently, the services, including Project Management Consultancy (PMC) and preparation of detailed project reports for smart water supply and sewerage services, are exempt from Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) under the relevant notifications.

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Issues Involved:
1. Determination of whether the services rendered by the Applicant to Chennai Metro Water Supply and Sewerage Board (CMWSSB) are exempt under SI. No. 3 of Notification No. 12/2017-CT (Rate) dated 28th June 2017.
2. Clarification on whether CMWSSB qualifies as a 'Governmental Authority' as defined in the Notification.
3. Examination of the nature of services provided by the Applicant to ascertain if they qualify as 'Pure Services.'

Issue-wise Detailed Analysis:

1. Exemption under SI. No. 3 of Notification No. 12/2017-CT (Rate):
The Applicant sought an advance ruling on whether their services to CMWSSB are exempt under SI. No. 3 of Notification No. 12/2017-CT (Rate) dated 28th June 2017. The services in question include Project Management Consultancy (PMC) for the construction, management, and supervision of Tertiary Treatment Reverse Osmosis (TTRO) plants at Kodungaiyur and Koyambedu, and consultancy for preparing a detailed project report for smart water supply and sewerage services in T.Nagar under the Smart City Mission.

2. Qualification of CMWSSB as a 'Governmental Authority':
The Applicant provided documentation indicating that CMWSSB is a Board constituted by the Chennai Metropolitan Water Supply and Sewerage Act, 1978, with 100% government contribution and control. The Board carries out functions such as water supply for domestic, industrial, and commercial purposes, and sanitation conservancy, which are entrusted to a municipality under Article 243W of the Constitution. This qualifies CMWSSB as a 'Governmental Authority' under Section 2(16) of the IGST Act, as amended by Notification No. 32/2017-Central Tax (Rate) dated 13.10.2017.

3. Nature of Services Provided by the Applicant:
The services provided by the Applicant include supervision of construction works, design, quality assurance, third-party inspection, environmental and social management, and expenditure sign-off for the TTRO plants. Additionally, the Applicant is involved in preparing a detailed project report for smart water supply and sewerage services in T.Nagar, including preliminary investigations, surveys, GIS mapping, and design distribution systems. These services are categorized as 'Pure Services,' which exclude works contract services or other composite supplies involving the supply of goods.

Conclusion and Ruling:
The Authority for Advance Ruling concluded that the services provided by the Applicant to CMWSSB are 'Pure Services' rendered to a 'Governmental Authority' in relation to functions entrusted to a municipality under Article 243W of the Constitution. Therefore, these services are exempt from CGST under SI. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017, and from SGST under SI. No. 3 of G.O. (Ms) No. 73 dated 29.06.2017.

RULING:
The services rendered by the Applicant to CMWSSB for Project Management Consultancy (PMC) and preparation of detailed project reports for smart water supply and sewerage services are exempt from CGST and SGST under the relevant notifications.

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