services provided to municipal corporation

[giri gattupalli]

Respected Sir,

One of my client provided machinery on lease to the person who entered direct contract with municipal corporation for sewage processing .and our machinery is used for sewage processing purpose. whether lease amount received by my client exempted or not

please discuss

thanking you

giri

[KASTURI SETHI]

Sh.Giri Gattupalli Ji,

Your client provided (supplied) service (leased machinery) to the contractor and the contractor further provided (supplied) service i.e. leased machinery to Municipal Corporation for sewage. Your client is providing to the contractor and not to Govt.etc. Your client is not eligible for exemption. Also go through the following decision of AAR, Karnataka

2020 (3) TMI 70 - AUTHORITY FOR ADVANCE RULING, KARNATAKA IN RE : M.V. INFRA SERVICES PVT. LTD.

[Ganeshan Kalyani]

I fully agree with the views of Sri Kasturi Sir. You client engaged with a person and not Govt. directly so no exemption and tax is payable.

AI Summary

Supply to contractor: lease of machinery used for municipal sewage processing is taxable; exemption not available. Lease receipts from machinery provided to a private contractor who then supplies the machinery for municipal sewage processing are not exempt from GST because the supplier's contract is with the contractor, not the municipal corporation; entitlement to exemption depends on the immediate recipient and the nature of the supply, so GST is payable.