GST Applicability to Services Provided by Applicant to Social Welfare Department

The services provided by the applicant to the Social Welfare Department were found not to be exempt from GST as they did not meet the criteria related to functions entrusted to a Panchayat or Municipality. Consequently, the Tax Deducted at Source (TDS) provisions were deemed applicable to the services provided. It was clarified that TDS notifications apply even if the supplier is unregistered under GST. However, the issue of entitlement to a refund of TDS deducted was not addressed in the decision.

---

---

Issues Involved:
1. Exemption of services provided to the Social Welfare Department from GST.
2. Applicability of TDS provisions on exempt services.
3. Applicability of TDS notification for an unregistered supplier under GST.
4. Entitlement to refund of TDS deducted.

Detailed Analysis:

Issue 1: Exemption of Services Provided to the Social Welfare Department from GST
The applicant sought clarification on whether the services provided to the Samaj Kalyan Department, State Government of Maharashtra for residential accommodation of underprivileged girls are exempt from GST. The applicant argued that the services fall under "pure services" as defined in Notification No. 12/2017-C.T. (R) dated 28.06.2017, which exempts services provided to the government by way of any activity related to functions entrusted to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution.

The authority examined the conditions for exemption under the notification:
1. The service should be a "pure service."
2. The service should be provided to the Central Government, State Government, local authority, or a Governmental authority.
3. The service should be related to functions entrusted to a Panchayat or Municipality under the respective Articles of the Constitution.

The authority concluded that while the applicant's service qualifies as a "pure service" and is provided to a State Government department, there was insufficient evidence to establish that the service is related to functions entrusted under Articles 243G or 243W. Consequently, the services provided by the applicant are not exempt from GST.

Issue 2: Applicability of TDS Provisions on Exempt Services
The applicant questioned whether TDS provisions apply when the supply of services is exempt. Since the authority determined that the services provided by the applicant are not exempt from GST, it held that the TDS provisions under Section 51 of the GST Act are applicable in this case.

Issue 3: Applicability of TDS Notification for an Unregistered Supplier under GST
The applicant, being unregistered under GST, sought clarity on whether TDS notifications issued under Section 51 would apply. The authority affirmed that TDS provisions are applicable even if the supplier is unregistered, provided the services are taxable.

Issue 4: Entitlement to Refund of TDS Deducted
The applicant asked if they would be entitled to a refund of TDS deducted. The authority refrained from answering this question, stating that entitlement to a refund is not covered under Section 97 of the CGST Act, 2017.

Conclusion:
1. The services provided by the applicant to the Samaj Kalyan Department are not exempt from GST.
2. TDS provisions apply to the services provided by the applicant.
3. TDS notification under Section 51 is applicable for deduction of TDS even if the applicant is not registered under GST.
4. The question regarding the refund of TDS deducted was not addressed.

---