Technical consultancy services to government authority exempt until January 2022, then 18% GST applies after notification amendment

AAR Maharashtra ruled on GST rates for technical consultancy services provided to Maharashtra Jeevan Pradhikaran (MJP) under Jal Jeevan Mission. Services invoiced before 01.01.2022 were held exempt under Entry 3 of Notification 12/2017-Central Tax (Rate). Services invoiced after 01.01.2022 attracted 18% GST (9% CGST + 9% SGST) under SAC 998399, as exemption was withdrawn after deletion of "Government Authority" from the notification. The applicant's argument that services were effectively provided to Central/State Government through PFMS was rejected as speculative and unsupported by evidence.

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Issues Involved:
1. Rate of tax for work allotted, performed, and invoiced before 01.01.2022.
2. Rate of tax for work allotted before 01.01.2022 but performed and invoiced after 01.01.2022.
3. Rate of tax for work allotted, performed, and invoiced after 01.01.2022.
4. Identification of the service receiver under Sec. 2 (93) of CGST/MGST Act for services provided before 01.01.2022.
5. Identification of the service receiver under Sec. 2 (93) of CGST/MGST Act for services provided after 01.01.2022.
6. Whether MJP's appointment as an agency to implement water supply schemes amounts to delegation of sovereign functions under the Constitution of India.

Detailed Analysis:

1. Rate of Tax for Work Allotted, Performed, and Invoiced Before 01.01.2022:
- Applicant's Submission: The services provided are pure services exempt under Notification No. 12/2017-Central Tax (Rate) as they are provided to a government authority.
- Authority's Finding: The services provided to MJP before 01.01.2022 are exempt from tax under Entry No. 3 of Notification No. 12/2017-Central Tax (Rate).
- Decision: The rate of tax is Nil for services provided before 01.01.2022.

2. Rate of Tax for Work Allotted Before 01.01.2022 but Performed and Invoiced After 01.01.2022:
- Applicant's Submission: The services should remain exempt as they are provided to a government authority.
- Authority's Finding: After 01.01.2022, the exemption is not applicable due to the deletion of the words "government authority or entity" from Notification No. 12/2017-Central Tax (Rate).
- Decision: The rate of tax is 18% (9% CGST and 9% SGST) for services performed and invoiced after 01.01.2022.

3. Rate of Tax for Work Allotted, Performed, and Invoiced After 01.01.2022:
- Applicant's Submission: The services should be exempt as they are for a government mission.
- Authority's Finding: The exemption is not applicable due to the deletion of the words "government authority or entity" from Notification No. 12/2017-Central Tax (Rate).
- Decision: The rate of tax is 18% (9% CGST and 9% SGST) for services performed and invoiced after 01.01.2022.

4. Identification of the Service Receiver Under Sec. 2 (93) of CGST/MGST Act for Services Provided Before 01.01.2022:
- Applicant's Submission: The Central and State Governments are the service receivers as they provide the grants.
- Authority's Finding: MJP is the service receiver as per the contractual agreement and GST provisions.
- Decision: The service receiver is the Maharashtra Jeevan Authority (MJP).

5. Identification of the Service Receiver Under Sec. 2 (93) of CGST/MGST Act for Services Provided After 01.01.2022:
- Applicant's Submission: The Central and State Governments are the service receivers as they provide the grants.
- Authority's Finding: MJP is the service receiver as per the contractual agreement and GST provisions.
- Decision: The service receiver is the Maharashtra Jeevan Authority (MJP).

6. Whether MJP's Appointment as an Agency to Implement Water Supply Schemes Amounts to Delegation of Sovereign Functions:
- Applicant's Submission: MJP acts as an agent of the government, performing sovereign functions.
- Authority's Finding: The issue is outside the purview of Section 97(2) of the GST Act.
- Decision: Not answered, as it is beyond the scope of the authority's jurisdiction.

Final Orders:
1. Question 1: Rate of tax is Nil for work allotted, performed, and invoiced before 01.01.2022.
2. Question 2: Rate of tax is 18% for work performed and invoiced after 01.01.2022 but allotted before 01.01.2022.
3. Question 3: Rate of tax is 18% for work allotted, performed, and invoiced after 01.01.2022.
4. Question 4: The service receiver is the Maharashtra Jeevan Authority (MJP) for services provided before 01.01.2022.
5. Question 5: The service receiver is the Maharashtra Jeevan Authority (MJP) for services provided after 01.01.2022.
6. Question 6: Not answered, as it is outside the purview of Section 97(2) of the GST Act.

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