PCSCL qualifies as Government Entity but rental services attract 18% GST under Section 51

The AAR Maharashtra ruled that PCSCL qualifies as a Government Entity under GST law, being established by Maharashtra State Government with 50:50 stake between Government of Maharashtra and PCMC to implement Smart Cities Project. However, renting of immovable property services to PCSCL are not exempt under Notification 12/2017-CTR as this activity is not related to functions under Articles 243G or 243W of the Constitution. Therefore, GST at 18% is applicable on such services. PCSCL is liable to deduct TDS under Section 51 of CGST Act on payments for renting services. The AAR declined to rule on utility charges due to insufficient details provided by the applicant.

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Issues Involved:
1. Whether PCSCL is termed as Government or Local Authority or Government Authority or Governmental Entity as per GST Law.
2. Whether PCSCL is eligible to claim benefits of Government or Local Authority or Governmental Authority or Governmental Entity (e.g., Exemption as per Notification 12/2017-Central Tax (Rate) dated 28/06/2017).
3. Whether Renting of Immovable Property Services provided to PCSCL is exempt as per GST Law. If taxable, at what rate GST will be applicable.
4. Whether Utility charges recovered from PCSCL are exempt as per GST Law. If taxable, at what rate GST will be applicable.
5. Whether PCSCL is liable to deduct tax at source (GST TDS as per provisions of GST Law).

Detailed Analysis:

1. Whether PCSCL is termed as Government or Local Authority or Government Authority or Governmental Entity as per GST Law:
The question pertains to the recipient of the supply and is not related to the supply of goods or services by the applicant. Therefore, it cannot be answered under Section 95 of the CGST Act, 2017.

2. Whether PCSCL is eligible to claim benefits of Government or Local Authority or Governmental Authority or Governmental Entity (e.g., Exemption as per Notification 12/2017-Central Tax (Rate) dated 28/06/2017):
Similar to the first question, this also pertains to the recipient of the supply and is not related to the supply of goods or services by the applicant. Hence, it cannot be answered under Section 95 of the CGST Act, 2017.

3. Whether Renting of Immovable Property Services provided to PCSCL is exempt as per GST Law. If taxable, at what rate GST will be applicable:
The applicant provides Renting of Immovable Property Services to PCSCL and claims exemption under Sr. 3, Chapter 99 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017. The exemption applies to pure services provided to the Central Government, State Government, Union territory, local authority, Governmental authority, or Government Entity by way of any activity in relation to functions entrusted to a Panchayat under Article 243G or a Municipality under Article 243W of the Constitution.

PCSCL is considered a Government Entity as it is established by the State Government of Maharashtra with 50:50 participation by the Government of Maharashtra and PCMC. However, the service of renting immovable property does not fall under the functions entrusted to a Municipality under Article 243W or a Panchayat under Article 243G. Hence, the service is not exempt and is taxable at 18% GST.

4. Whether Utility charges recovered from PCSCL are exempt as per GST Law. If taxable, at what rate GST will be applicable:
The applicant did not provide sufficient details or relevant agreements regarding the utility charges. Due to incomplete details, this question cannot be answered.

5. Whether PCSCL is liable to deduct tax at source (GST TDS as per provisions of GST Law):
PCSCL is liable to deduct TDS under Section 51 of the CGST/SGST Act 2017, as it is an authority established by the Government with 51% or more participation by way of equity or control. Therefore, PCSCL must deduct TDS in respect of payments made to the applicant for renting immovable property services.

Order:

- Question 1: Not answered.
- Question 2: Not answered.
- Question 3: Renting of Immovable Property Services provided to PCSCL is not exempt and is taxable at 18% GST.
- Question 4: Not answered.
- Question 5: PCSCL is liable to deduct TDS as per GST Law.

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