Pure services exemption for architectural work to a municipal corporation applies where the activity relates to a municipal function under Article 243W.

Comprehensive architectural services supplied as pure services to a municipal corporation were treated as exempt under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) because the recipient was a local authority and the work related to a municipal function under Article 243W. The services concerned repairs, restoration and reconstruction of a recreation ground-cum-textile museum, and the relevant municipal nexus was traced to the municipal corporation's statutory functions under the applicable municipal law. The exemption was not denied merely because the activity was not expressly named in the Twelfth Schedule, as a direct statutory link to a municipal function was sufficient. The services were therefore held exempt from GST.

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Issues: Whether comprehensive architectural services supplied to a municipal corporation for repairs, restoration and reconstruction of a recreation ground cum textile museum are exempt under Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: The exemption under Sr. No. 3 applies where the supply is of pure services, the recipient is the Central Government, State Government, Union territory or a local authority, and the services are provided by way of an activity in relation to a function entrusted to a Panchayat under Article 243G or to a Municipality under Article 243W of the Constitution. The services in question were found to be pure services and the recipient was a local authority. On the third condition, the municipal functions relevant to museums and recreation grounds were traced to Section 63 of the Brihan Mumbai Municipal Corporation Act, 1888, which entrusts such matters to the municipal corporation. The activity was therefore held to be in relation to a function entrusted to the municipality under Article 243W, and the absence of a direct mention in the Twelfth Schedule did not defeat the exemption.

Conclusion: The services are covered by Sr. No. 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and are exempt from GST.

Ratio Decidendi: Pure services supplied to a local authority are exempt when the activity has a statutory nexus with a municipal function entrusted under Article 243W, even if the activity is not directly and specifically listed in the Twelfth Schedule.

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