Manpower supply

[Srinidhi HS]

Taxpayer is firm engaged in the business of Manpower Supply to Hospital, Medical institutes, University and supporting staff to Forest departments. They thought its exempted since providing it to hospital forest department and MGNREGA Scheme. They have not collected tax as well and filed as exempted. Now the order is passed asking to pay tax on that since it does not cover under sl.no 3 notification 12/2017. Any inputs on this. Thank you

[Sadanand Bulbule]

Refer the following in full:

2024 (2) TMI 170 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA - IN RE: M/S. MANISH MANPOWER AGENCY

Exemption under Article 243G of the Constitution or not - pure services provided to Zilla panchayat (social welfare department) and Taluk Panchayat - HELD THAT:- The applicant is providing manpower services like FDA, SDA, Typists, drivers Data Entry Operator, "D" Group etc to Zilla Panchayat/Taluk Panchayat/ Social welfare department/Backward Classes Welfare Department. But these manpower services are not provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. Hence provision of such manpower services is liable to tax at 18%.

The applicant is also providing manpower services like cleaning staff, cook, assistant cook, teachers, staff nurse and watchman to hostels and residential schools/colleges run by Social welfare department is exempted as it satisfies both the conditions mentioned under entry no. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. These manpower services are provided to Social welfare department which is a department of State Government. These manpower services are provided to weaker sections including scheduled caste and scheduled tribe which are in relation to the function entrusted to a Panchayat under article 243G of the Constitution which is covered by 27th entry of eleventh schedule which says 'Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes'.

AI Summary

Manpower Supply Firm's Services Not Exempt from GST Under MGNREGA, Must Pay Tax Per Notification 12/2017 Ruling. A firm engaged in supplying manpower to hospitals, medical institutes, universities, and forest departments believed their services were exempt from Goods and Services Tax (GST) under the MGNREGA Scheme. However, an order was issued requiring them to pay tax, as their services did not qualify for exemption under notification 12/2017. A reference was made to a ruling where similar services provided to certain government departments were not exempt, except when related to social welfare functions under Article 243G, which allows exemptions for services aiding weaker sections, including Scheduled Castes and Tribes.