2019 (4) TMI 112 - AAR - GST

Artists' Contract Cooperative: GST Exemption for Services

The ruling authority confirmed that the execution of 'Livelihood for Artists and Local Art Hubs' by a labor contract cooperative society as an ... Pure services - exemption under Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017 for pure services provided to Government in relation to functions in the Twelfth Schedule - services to safeguard interests of weaker sections and promotion of cultural, educational and aesthetic aspects - administrative agency services for government programmesPure services - exemption under Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017 for pure services provided to Government in relation to functions in the Twelfth Schedule - administrative agency services for government programmes - Whether the services rendered by the applicant as administrative agency for execution of the 'Livelihood for Artists and Local Art Hubs' programme are taxable or exempt under GST - HELD THAT: - The Authority found that the applicant's activities - arranging skill exhibition centres, empowering rural artists and artisans by improving skills, conducting exhibitions, connecting artisans to markets and creating sustainable livelihood opportunities - are services of a purely service nature and do not involve works contract or composite supplies involving supply of goods. Such activities fall within the ambit of functions aimed at safeguarding weaker sections and promoting cultural and educational aspects, which are reflected in the Twelfth Schedule. Accordingly, these services supplied to a State Government as an administrative agency qualify as 'pure services' covered by Sl. No. 3 of Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017, and are therefore exempt from GST under that Notification.The services rendered by the applicant as administrative agency for the said programme are 'pure services' and are exempt from GST under Sl. No. 3 of Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017.Final Conclusion: Advance ruling: the execution of the 'Livelihood for Artists and Local Art Hubs' programme by the applicant as administrative agency constitutes pure services supplied to the State Government and is exempt from GST under the cited notification. Issues:1. Whether the execution of 'Livelihood for Artists and Local Art Hubs' as an administrative agency falls under taxable servicesRs.Analysis:The case involved a labor contract cooperative society registered under the Kerala Co-operative Societies Act, primarily engaged in construction activities for the government and other institutions. The society was appointed by the Department of Cultural Affairs, Government of Kerala, as an administrative agency for a project aimed at empowering rural artists and artisans. The society sought an advance ruling on whether their services provided for this project would be taxable under the GST Act.During the hearing, it was revealed that the society was tasked with organizing skill exhibitions, creating sustainable livelihood opportunities, establishing market connections for rural artists, and collecting data for various government programs. The society argued that their activities, including improving the skills of rural artists, conducting art product exhibitions, and facilitating market access without involving middlemen, constituted pure services.The ruling authority examined Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017, which exempts 'pure services' provided to government authorities from GST. The notification specifies that services related to functions entrusted to Panchayats or Municipalities under the Constitution, such as safeguarding the interests of weaker sections and promoting cultural aspects, fall under this exemption. Considering these provisions, the authority concluded that the activities performed by the society as an administrative agency for the project were indeed pure services exempted from GST under the specified notification.Therefore, the ruling issued confirmed that the execution of 'Livelihood for Artists and Local Art Hubs' by the society as an administrative agency fell under pure services exempted from GST as per Notification No. 12/2017 Central Tax (Rate) dated 28-06-2017.