Security services, manpower supply, and pest control denied GST exemption under Notification 12/2017-CT(Rate) for composite supply classification.

AAR Rajasthan ruled that the applicant cannot claim GST exemption under Notification No. 12/2017-CT(Rate) for various services. Security services were denied exemption as they were not entrusted to Panchayats or Municipalities under Constitutional provisions. Manpower with machine supply, anti-termite treatment, and pest control services were classified as composite supply rather than pure services since they involved goods supply alongside services, making them ineligible for the claimed exemption benefits.

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Issues Involved:
1. Eligibility for exemption benefit under Sr. No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2017 for pure services provided to various government entities.

Summary:

1. Security Services:
The applicant provided security services to Gram Panchayats and other government entities. The Authority examined whether these services qualify as "pure services" under the GST Act and whether they meet the exemption criteria under Notification No. 12/2017-CT (Rate). The Authority concluded that the security services do not fall under the functions entrusted to a Panchayat under Article 243G of the Constitution. Therefore, the applicant is not entitled to the exemption benefit for security services.

2. Manpower Supply (Man with Machine):
The applicant supplied manpower along with machines to Panchayat Samitis and other government entities. The Authority noted that the applicant did not provide sufficient documentation to determine the nature of the service. However, based on the available information, the Authority concluded that these services involve the supply of goods, making them composite supplies rather than pure services. Consequently, the applicant is not eligible for the exemption benefit for manpower supply.

3. Anti-Termite Treatment Services:
The applicant provided anti-termite treatment services to Gram Panchayats and other government entities. The Authority found that these services also involve the supply of goods, classifying them as composite supplies. Therefore, the applicant is not entitled to the exemption benefit for anti-termite treatment services.

Conclusion:
The Authority ruled that the applicant is not eligible for the exemption benefit under Sr. No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2017 for the services of security, manpower supply with machines, and anti-termite treatment provided to Central Government, State Government, Local Authorities, Governmental Authorities, and Government Entities such as Gram Panchayats and Panchayat Samitis.

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