Pure manpower services to municipal schools qualify for GST exemption when linked to a municipal education function.

The supply of teachers and lecturers on an outsource basis was treated as a pure service because it involved manpower services only and no goods. BBMP was regarded as a municipality and therefore a local authority for GST exemption purposes. Supplying teachers and lecturers was considered activity in relation to a municipal function connected with the promotion of educational aspects under Article 243W of the Constitution, so the conditions of Entry 3 of Notification No. 12/2017-Central Tax (Rate) were satisfied and the supply was exempt from GST.

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Issues: Whether the supply of teachers and lecturers to BBMP schools and colleges on outsource basis is a pure service provided to a local authority by way of an activity in relation to a function entrusted to a municipality, so as to qualify for exemption under Notification No. 12/2017-Central Tax (Rate).

Analysis: The supply involved only manpower services and no goods, and therefore answered the description of pure services. BBMP was treated as a municipality and hence a local authority for the purpose of the GST exemption. The activity of supplying teachers and lecturers was held to be connected with promotion of educational aspects, which falls within the functions entrusted to a municipality under Article 243W of the Constitution of India. On that basis, the conditions of Entry 3 of Notification No. 12/2017-Central Tax (Rate) were found to be satisfied.

Conclusion: The supply of teachers and lecturers to BBMP schools and colleges on outsource basis is exempt from GST under Entry 3 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

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