Applicant's Composite Supply Exempt from GST; Public Health Dept. Not Liable for TDS

The applicant's activities were deemed to qualify as a composite supply of goods and services exempt from GST under entry No. 3A of Notification No. 12/2017-CT(R). Additionally, the Public Health Department, State of Haryana, was found not required to deduct TDS under Section 51 of the CGST Act, 2017 for the applicant's exempt services.

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Issues Involved:
1. Whether the applicant's activities qualify as a composite supply of goods and services exempt from GST under entry No. 3A of Notification No. 12/2017-CT(R), dated 28.06.2017 as amended by Notification No. 2/2018-CT(R), dated 25.01.2018.
2. Whether the service recipient, Public Health Department, State of Haryana, is required to deduct TDS under Section 51 of the CGST Act, 2017 given the applicant's services are exempt from GST.

Issue-wise Detailed Analysis:

1. Composite Supply and GST Exemption:
- Nature of Contracts: The applicant, a civil contractor, engaged in executing government works, sought an advance ruling for two contracts: the Water Supply Scheme and the Sewerage Scheme at Samalkha Town, Panipat, Haryana.
- Contract Details:
- Water Supply Scheme: Total cost Rs. 376.95 lacs, with 20.07% towards supply of goods and 79.93% towards supply of services.
- Sewerage Scheme: Total cost Rs. 66.35 lacs, with 2.04% towards supply of goods and 97.92% towards supply of services.
- Applicant's Interpretation: The applicant argued that the contracts qualify as composite supplies with the value of goods not exceeding 25% of the total value, thus exempt under entry No. 3A of Notification No. 12/2017-CT(R).
- Legal Provisions: Entry No. 3A of Notification No. 12/2017-CT(R) exempts composite supplies to the government where the value of goods is =25% of the total value, related to functions under Articles 243G and 243W of the Constitution.
- Authority's Findings: The contracts were found to be composite supplies with major portions being services (more than 75%). The activities were related to functions under Articles 243G and 243W, qualifying for exemption under entry No. 3A of Notification No. 12/2017-CT(R).

2. TDS Deduction Requirement:
- Applicant's Position: The applicant contended that since their services are exempt from GST, the Public Health Department should not deduct TDS under Section 51 of the CGST Act, 2017.
- Legal Provisions: Section 51 of the CGST Act mandates TDS deduction by government entities for contracts exceeding Rs. 2,50,000, unless the services are exempt from GST.
- Authority's Findings: Since the services provided by the applicant are exempt from GST under Notification No. 12/2017-CT(R), the Public Health Department is not required to deduct TDS.

Conclusion:
- Ruling on Composite Supply and GST Exemption: The applicant's activities qualify as a composite supply of goods and services exempt from GST under entry No. 3A of Notification No. 12/2017-CT(R).
- Ruling on TDS Deduction: The Public Health Department, State of Haryana, is not required to deduct TDS under Section 51 of the CGST Act, 2017 for the applicant's exempt services.

Ordered Accordingly: The advance ruling confirmed the exemption from GST for the applicant's services and clarified the non-requirement for TDS deduction by the Public Health Department.

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