IIM Tiruchirappalli: Government Entity under GST Law, Liable for Tax Deduction & Reverse Charge Obligations

The ruling determined that the Indian Institute of Management, Tiruchirappalli (IIM) qualifies as a Government Entity under GST Law. It was held that IIMT is liable to deduct tax at source under Section 51 of the CGST Act, 2017. Additionally, the institute is required to discharge liability on a reverse charge basis for legal services received. However, the question regarding the applicability of specific notifications related to works contract services was not admitted for consideration.

---

---

Issues Involved:
1. Whether Indian Institute of Management, Tiruchirappalli (IIM) is a Government Entity under GST Law.
2. If the answer to the first question is affirmative:
2.1. Whether the applicant is liable to deduct tax at source (TDS) under Section 51 of the CGST Act, 2017.
2.2. Whether the applicant is required to discharge liability on reverse charge basis on supply of services as per Section 9(3) and 9(4) of the CGST Act, 2017.
2.3. Whether the entry provided under Serial No.3/3A of Notification 12/2017 is available to IIMT and whether the composite supply of works contract provided to the applicant is covered by Serial No.3(vi) of Notification 11/2017 dated 28th June 2017.

Detailed Analysis:

1. Whether Indian Institute of Management, Tiruchirappalli (IIM) is a Government Entity under GST Law:
The applicant, IIMT, was originally established as a society in 2011 and later became a body corporate under the Indian Institute of Management Act, 2017. The institute is under the direct supervision and control of the Ministry of Human Resources Development of India, with its initial corpus fund provided by the Government of India. The term "Government Entity" as defined in Notification No. 32/2017 - Central Tax (Rate) dated 13.10.2017 includes bodies set up by an Act of Parliament or State Legislature with 90% or more participation by way of equity or control. Given that IIMT was set up by an Act of Parliament and receives more than 90% of its funding from the central government, it qualifies as a Government Entity under the GST law.

2.1. Whether the applicant is liable to deduct tax at source (TDS) under Section 51 of the CGST Act, 2017:
Section 51 of the CGST Act mandates certain entities, including those set up by an Act of Parliament with more than 51% participation by way of equity or control, to deduct tax at the rate of 1% on account of CGST and 1% on account of SGST from the payment made to suppliers where the total value of the supply under a contract exceeds Rs. 2,50,000. Since IIMT is a body set up by an Act of Parliament with more than 51% participation by way of funding, it is liable to deduct TDS from its suppliers under Section 51 of the CGST Act, 2017, read with Notification No. 50/2018 dated 13.09.2018.

2.2. Whether the applicant is required to discharge liability on reverse charge basis on supply of services as per Section 9(3) and 9(4) of the CGST Act, 2017:
Section 9(3) of the CGST Act allows the government to specify categories of supply of goods or services on which tax shall be paid on a reverse charge basis by the recipient. The applicant receives security and legal services. As per Notification No. 13/2017 dated 28.06.2017, security services provided by any person other than a body corporate to a registered person are taxable on a reverse charge basis. However, the applicant submitted invoices showing that the security services were provided by a registered private limited company, thus not liable under RCM. In contrast, legal services provided by an individual advocate or a firm of advocates are taxable on a reverse charge basis. The applicant submitted invoices for legal services received from an individual advocate, making them liable to pay tax under RCM for these services.

2.3. Whether the entry provided under Serial No.3/3A of Notification 12/2017 is available to IIMT and whether the composite supply of works contract provided to the applicant is covered by Serial No.3(vi) of Notification 11/2017 dated 28th June 2017:
The applicant contended that they are entitled to exemption under Serial No. 3 & 3A of Notification 12/2017 as they provide educational services covered under the Twelfth Schedule under Article 243W and the Eleventh Schedule under Article 243G of the Constitution of India. They also sought eligibility for preferential rates under Serial No. 3(vi) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 for works contract services provided by CPWD. However, as per the ruling, advance ruling cannot be sought by recipients of a supply regarding the classification or taxability of such supply received by them. Therefore, the question regarding the applicability of Serial No. 3/3A of Notification 12/2017 and Serial No. 3(vi) of Notification 11/2017 was not admitted for consideration.

RULING:
1. The Indian Institute of Management, Tiruchirappalli (IIM) is a Government Entity under GST Law.
2.1. The applicant is liable to deduct tax at source (TDS) under Section 51 of the CGST Act, 2017, read with Notification No. 50/2018-C.T dated 13.09.2018.
2.2. The applicant is required to discharge liability on reverse charge basis on supply of services as per Section 9(3) of the CGST Act, 2017, in respect of legal services received by them for which documentary evidence was submitted.
2.3. The question regarding the applicability of Serial No. 3/3A of Notification 12/2017 and Serial No. 3(vi) of Notification 11/2017 was not admissible and therefore not admitted.

---