TaxTMI 
TaxTMI 
2019 (7) TMI 1332
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....l Institute of Technology, Nagpur (VNIT) is nil as per Serial no 3 of Notification No 12/2011-Central Tax (Rate) dated 28th June 2017. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- A. Statement of relevant facts having a bearing on the question(s) raised. Facts and Contentions We Security and Intelligence Services (India) Ltd, (SIS) are providers of security services to various entities all over India and have different type of customers included educational bodies and higher educational Institutions like IITs etc. We are providing services to Visvesvaraya National Institute of Technology, Nagpur (VNIT). VNIT as an institute was established in the y....
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....oviding services by way of,- (i) pre-school education and education up to higher secondary school or equivalent,' (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course" In terms of the aforesaid entry, exemption is only provided inter alia in relation to security services provided by a supplier of service to an educational institution providing services by way of pre-school education and education up to higher secondary school or equivalent. Therefore, the said exemption is not available to any and every kind of educational institution. Thus, in terms of the aforesaid exemption entry, there is no exception carved out in relation to an educational institution which qualifies as a Governmental authority. On perusal of Sr. No. 3 of Notification No. 12/2017, it would be seen that the same exempts 'pure services' provided to a Governmental authority 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 un....
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....under for ready reference: "Art. 243W. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow- (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to- (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule". 3B. Legal interpretation of a term: On perusal of the article & notifications mentioned in point 15, it would be seen that the same provides for similar powers, authority & responsibilities to a Municipality that have been endowed upon the....
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....ical institute is engaged in imparting under-graduate courses, post-graduate courses & Ph. D programs in the field of engineering, architecture and science, it would not be entitled to exemption provided under Sr. No. 66 of the exemption notfn. & hence, it would be liable to pay applicable GST. LEGAL OPINION 1.1 Security and Intelligence Services (India) Ltd. (hereinafter "the querist") is a company having its office at A - 28 & 29, Okhla Industrial Area, Phase - I, New Delhi, and is engaged in the business of providing security related services. The querist has obtained GST registration in various States from where it supplies service. 1.2 The querist has entered into an Agreement dated 29th Sep, 2017, with VNIT for providing Security services in relation to various premises owned by it. 1.3 VNIT, it is informed has objected to the payment of applicable GST in relation to the security services provided by the querist on the premise that it qualifies as a "governmental authority" & hence, is not liable to pay tax. We have been provided with a copy of legal opinion dated 28.09.2017, sought by VNIT from their Chartered Acctt. In terms of the said opinion, it has been advi....
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....vity 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 243 W of the Constitution. Nil Nil 3.2 Clause (zf) appended to Part 2 of the aforesaid notification provides for the definition of "governmental authority" to have the same meaning as assigned to it in the Explanation to clause (16) of Section 2 of the Integrated Goods and Services Tax Act, 2017 ("IGST Act"). Explanation appended to Sec 2(16) of the IGST Act provides for the meaning of the term "governmental authority" as under: "2(16) "non-taxable online recipient" means ........... Explanation.- For the purposes of this clause, the expression "governmental authority " means an authority or a board or any other body, (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution" 3.3 VNIT as an institute was established in the year 1960 under the scheme sponsored by Gov....
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....to mean "an institution providing services by way of, (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course 3.3 In terms of the aforesaid entry, exemption is only provided inter alia in relation to security services provided by a supplier of service to an educational institution providing services by way of pre-school education and education up to higher secondary school or equivalent. Therefore, the said exemption is not available to any and every kind of educational institution. Thus, in terms of the aforesaid exemption entry, there is no exception carved out in relation to an educational institution which qualifies as a Governmental authority. (Intentionally left blank) 4.0 APPLICATION OF LEGAL PROVISIONS TO THE FACTS OF THE PRESENT CASE: 4.1 On perusal of Sr. No. 3 of Notification No. 12/2017, it would be seen that the same exempts "pure services provided to a Governmental authority by way of any activity in relation to an....
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.... for powers, authority and responsibilities of Municipalities. The said article is reproduced hereunder for ready reference: "Art. 243W. Subject 10 the provisions of this Constitution, the Legislature of a State may, by law, endow (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and [he implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable to them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule". 4.5 On perusal of the aforesaid article, it would be seen that the same provides for similar powers, authority and responsibilities to a Munici....
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.... (i.e. junior college). Since VNIT as a technical institute is engaged in imparting under-graduate courses, post-graduate courses and Ph. D programs in the field of engineering, architecture & science, it would not be entitled to the exemption provided under Sr. No. 66 of the exemption notification & hence, would be liable to pay applicable goods & services tax to the querist. 4.9 Without prejudice, in our opinion, the reliance placed by VNIT on the Ld. Chartered Accountant's view is incorrect and is totally misplaced. Since the Ld. consultant has mis-interpreted the scope of exemption provided at Sr. No. 3 of Notification No. 12/2017, the entries at Sr. Nos. 3 and 66 and not contradictory in nature and hence, in our considered there is no scope for seeking Advance Ruling on the issue. 3.C. Additional submission on 10.05.2019 We have represented our case before your good office on May 02, 2019 wherein your good office has directed us to provide the detailed note on various terms used in the Entry no. 3 of the Exemption Notification no. 12/2017-Central Tax (Rate) dated 28/06/2017 and also, the remarks on the Advance Ruling given by Maharashtra Authority of Advance Ruling in....
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....commencement of the Constitution, shall be in a State the Governor, and in an Union Territory the Central Government. B.7. As per Article 154 of the Constitution, the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or indirectly through officers subordinate to him in accordance with the Constitution. B.8. Further, as per Art. 166 of the Constitution, all executive actions of the Government of State shall be expressed to be taken in the name of Governor. Therefore, State Government means the Governor, or the officers subordinate to him who exercise the executive powers of the State vested in the Governor and in the name of the Governor. Para C: Definition of "Local Authority C.1. Local authority is defined in clause (69) of section 2 of the CGST Act, 2017 and means the following: - a "Panchayat" as defined in clause (d) of article 243 of the Constitution; - a "Municipality as defined in clause (e) of article 243P of the Constitution; - a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any ....
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....f land-use and construction of buildings. (c) Planning for economic and social development. (d) Roads and bridges. (e) Water supply for domestic, industrial and commercial purposes. (f) Public health, sanitation conservancy and solid waste management, (g) Fire services, (h) Urban forestry, protection of the environment and promotion of ecological aspects. (i) Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded, (j) Slum improvement and upgradation. (k) Urban poverty alleviation, (l) Provision of urban amenities and facilities such as parks; gardens, playgrounds, (m) Promotion of cultural, educational and aesthetic aspects, (n) Burials and burial grounds; cremations, cremation grounds; and electric crematoriums, (o) Cattle pounds; prevention of cruelty to animals, (p) Vital statistics including registration of births and deaths. (q) Public amenities including street lighting, parking lots, bus stops and public conveniences. (r) Regulation of slaughter houses and tanneries. Part F: Arti....
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.... development. (xxvi) Social welfare, including welfare of the handicapped and mentally retarded: (xxvii) Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes. (xxviii) Public distribution system. (xxix) Maintenance of community assets. Para G: A statutory body, corporation or an authority created by the Parliament or a State Legislature is neither 'Government' nor a local authority' G.1. FAQs on Government Services under GST issued by CBEC (question number 6) has provides that a statutory body, corporation or an authority created by the Parliament or a State Legislature is neither 'Government' nor a 'local authority'. Such statutory bodies, corporations or authorities are normally created by the Parliament or a State Legislature in exercise of the powers conferred under article 53(3)(b) and article 154(2)(b) of the Constitution respectively. It is a settled position of law (Agarwal Vs. Hindustan Steel AIR 1970 Supreme Court 1150 = 1969 (12) TMI 109 - SUPREME COURT) that the manpower of such statutory authorities or bodies do not become officers subordinate to the President under arti....
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....rnmental authority as mentioned in Para G supra. 1.3. Pure service is not defined in the GST Act. However, it appears from the context that services involving no supply of goods are considered as pure service. 1.4. Serial no. 3 of Notification No. 12/2017, exempts only pure service provided to a Governmental authority 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 243 W of the Constitution. 1.5. A study of the two lists, as given above (Para E.2 & Para F .2.), makes it clear that "Security Services" provided to Governmental Authority, as institutions of Central State/District/Local authorities, are clearly not covered under the either list. 1.6. In view of the above, as the services provided by the applicant to VNIT does not appear to be the "pure services", as mandated under article 243G & 243 W of the Constitution and also VNIT would not be qualifies as a Governmental authority, applicant is on the view that VNIT would not be entitled to the exemption in terms of the serial no. 3 of the exemption notification number 12/2017 - Cen....
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....mption notification, appears to be correct. Para 15:- Statement of Relevant facts having bearing on the questions raised, as submitted by the applicant:- (i) In respect of 2nd Question Raised (in Para 14): Whether rate of tax on services provided to Visvesvaraya National Institute of Technology, Nagpur, (VNIT) is nil as per Serial No.3, of Notification No. 12/2017Central Tax (rate) dated 28-06-2017 (ii) Departments contention: a) that since VNIT has been conferred the Deemed University status and declared as an Institute of National Importance by an Act of Parliament, it would qualify as a Governmental authority. b) that Sr. No. 3 of Notification No. 12/2017, exempts 'pure services' provided to a Governmental authority 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. The aforesaid entry seeks to exempt pure services provided by a supplier of service, which are in the nature of functions entrusted to a Panchayat or a Municipality under the Constitution. c) that not all services supp....
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....under University Grants Commission Act, 1956). VNIT awards bachelors, masters and doctoral degrees in engineering, technology and architecture and runs nine Under-graduate and twenty one Post-graduate courses apart from Ph. D programs in the field of engineering, architecture and science. Henee it is submitted that VNIT should qualify as a Governmental authority. In view of the above submissions they have raised two questions which are taken up for discussion as follows:- Question No. 1: Whether the services provided to Visvesvarayya National Institute of Technology, Nagpur will qualify for exemption under Serial No. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28th June 2017, considering it to be an educational Institution. We find from their submissions that the applicant is of the opinion that the said Sr.No. 66 is not applicable in their case but VNIT has informed them that GST is not applicable on security services provided by the applicant to them. As per Sr.No.66 (b) (iii) security services or cleaning services or housekeeping services supplied to an educational institution attracts NIL rate of GST. Hence to avail of the benefit of Sr. No.66 mentioned a....
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....coaching institutes would not be covered as such training does not lead to grant of a recognized qualification. We find that the applicant has been given the status of a Deemed University by the University Grants Commission. The UGC was formally established 1956 as a statutory body of the Government of India through an Act of Parliament for the coordination, determination and maintenance of standards of university education in India. Since the VNIT has been recognized by the UGC, this would imply that the courses conducted by the applicant are recognized by law. We find that the education provided by VNIT is a part of a curriculum for obtaining a qualification recognised by any law for the time being in force. We now reproduce Serial No. 66 of Notification No. 12/2017 which provides for exemption in relation to certain service availed by educational institution as under: S.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (%) Condition 66 Heading 9992 Services provided - (a) by an educational institution to its students, faculty and staff; (b) to an educational institution, by way of, (i) transpor....