Ruling: PHFMS services to state hospitals exempt from GST under Notification 12/2017.

The ruling clarified that services provided by PHFMS to DME and DMS are not directly classified under functions entrusted to Panchayats or Municipalities. The services were considered comprehensive facility management solutions and exempt under Entry No.3 of Notification 12/2017-C.T.(Rate) dated 28.06.2017, as they were pure services provided to state government hospitals. The services were not liable for GST and were categorized as pure services, not composite supplies. The exemption applied to services related to public health and sanitation functions at state government hospitals.

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Issues Involved:
1. Classification of services provided by PHFMS to DME/DMS under functions entrusted to Panchayat or Municipality.
2. Exemption applicability under SI.No.3 of Notification 12/2017 Central Tax.
3. GST liability and applicable rate for services provided by PHFMS to DME/DMS.
4. Classification of services as pure services or composite supplies.

Issue-wise Detailed Analysis:

1. Classification of Services Provided by PHFMS to DME/DMS:
The applicant sought clarification on whether the services provided by PHFMS to the Directorate of Medical Education (DME) and Directorate of Medical & Rural Health Services (DMS) are classifiable as functions entrusted to a Panchayat or Municipality under the Constitution. The ruling clarified that the services provided, which include housekeeping, security, and assistance in various maintenance tasks, are not directly classified under the functions entrusted to Panchayats or Municipalities as per Articles 243G and 243W of the Constitution. The services are considered as comprehensive facility management solutions.

2. Exemption Applicability under SI.No.3 of Notification 12/2017 Central Tax:
The applicant queried whether the services provided to DME/DMS are exempt under SI.No.3 of Notification 12/2017 Central Tax dated 28.06.2017. The ruling examined the scope of work under the tender, which includes pure services like housekeeping, security, and maintenance services provided to state government hospitals. It was determined that these services are indeed pure services provided to a state government entity, fulfilling the conditions of the exemption notification. Therefore, the services are exempt under Entry No.3 of Notification 12/2017-C.T.(Rate) dated 28.06.2017.

3. GST Liability and Applicable Rate for Services Provided by PHFMS to DME/DMS:
The ruling addressed whether the services provided by PHFMS to DME/DMS are liable for GST and, if so, the applicable rate. It was concluded that since the services are exempt under the specified notification, they are not liable for GST. The services provided are considered pure services related to functions entrusted to a Panchayat or Municipality, thereby qualifying for the exemption.

4. Classification of Services as Pure Services or Composite Supplies:
The applicant sought clarification on whether the services rendered by PHFMS to DME/DMS can be classified as pure services or composite supplies. The ruling clarified that the services provided, which include housekeeping, security, and various maintenance services, are pure services. The services do not involve significant supply of goods and thus do not constitute composite supplies. The exemption applies as these are pure services in relation to functions entrusted to Panchayats or Municipalities.

Additional Notes:
- The ruling did not address the applicability of GST on services provided to Medical Colleges and Nursing Colleges under the Directorate of Medical Education (DME) as the applicant did not provide sufficient evidence of current or proposed services to these institutions.
- The ruling emphasized that the exemption under SI.No.3 of Notification 12/2017-C.T.(Rate) applies to services provided to state government hospitals for functions related to public health and sanitation.

Ruling Summary:
1. The proposed supply of housekeeping, security, and various maintenance services to 93 government hospitals under DMS is exempt under Entry No.3 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017.
2. The question regarding the supply to Medical Colleges and Nursing Colleges under DME was not admitted due to lack of sufficient evidence.

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