AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 29
X X X X Extracts X X X X
X X X X Extracts X X X X
....outreach and stakeholder consultations through seminars, conferences and forums. 3. The applicant has the following network of schools and centres through which it executes the above stated functions:- (i) Indian Corporate Law Services Academy (ii) School of Competition Law and Market Regulation (iii) School of Corporate Governance & Public policy (iv) School of Finance (v) School of Corporate Law (vi) Centre for E-governance (vii) Centre for Responsible Corporate Governance (viii) Centre for Micro Small & Medium Enterprises (ix) Centre for Business Innovation (x) Centre for Institutional partnerships & Corporate Communications (xi) Knowledge Resource Centre 4. For the purposes of learning and , development, providing metadata and implementation of projects in the field of corporate social responsibility, a body called National Foundation for Corporate Social Responsibility (NFCSR) was established at IICA in 2012 to be the apex national institution that aims to build an enabling environment for the corporate sector to work in partnership with the government, non-government and c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e and maintenance of toilets. (iv) Healthcare encompassing doctor's consultancy and basic medicine supplies for 1 year. (b) Consequently, AICL gave its consent for implementation as per the following details from the detailed project report: (i) Installation of solar water pumps - 122 in Nos; (ii) Installation of solar lights - 1230 in Nos; (iii) Sanitation (construction of toilets) - 3670 in Nos. 7. The relevant extracts from the MOU is produce below: (a) "SCOPE OF THE WORK" (i) The project Seeks to develop and improve village level facilities and infrastructure to mike significant difference in quality of life of the rural area. The specific objectives of the project are: a. Provision of drinking Water facility in covered Villages b. To provide solar street lights in villages c. To improve village sanitation by building household toilets and creating awareness (ii) Proposed project components: a. Provide one solar water lifting pump for a population of 1000 villagers b. Installing need-based solar street lights in selected villages c. Building house....
X X X X Extracts X X X X
X X X X Extracts X X X X
....humanitarian interest". In such a situation, service tax is not leviable, since the donation or grant-in-aid is not linked to specific trainee or training. 14. Similarly, in the arrangement between AICL and IICA there is no relationship, other than universal humanitarian interest, between the amount given by AICL and the charitable work done by IICA, as IICA carries full authority and decision making powers to decide as to who would be the recipient of the above mentioned services. PART-B 15. The activity done by IICA for the ultimate beneficiaries is a social activity/ without any consideration, therefore this would not fall under the definition of "Supply" given in section 7 of the CGST Act, 2017, and therefore, would not attract the provisions of GST Law. View-II 16. However, if the transaction between AICL and IICA is treated as supply from IICA to AICL as per the provisions of Section 9 of CGST Act, 2017, then the following questions would arise to determine its chargeability to GST provisions: (i) Whether the supply is of goods or services or both. (ii) Whether the supply is an exempt or taxable supply. 17. Regarding, whether the supply is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r, air and land, and human beings, other living creatures, plants, micro-organism and property. 28. From the definitions of preservation and environment, any activity which maintains the environment (water, air and land) in the present state or prevents it from further damage or destruction can be called as an "activity relating to preservation of environment." 29. The activities of installation of solar water pumps and solar street lights through use of LEO technology. I. Traditional use of fossil fuels such as coal, oil and natural gas to generate electricity requires burning of fossil fuels which emits a number of air pollutants that are harmful to environment and is major source of global warming. For instance, burning of coal emits sulphur-di-oxide, nitrogen oxides. mercury other harmful gases. II. Use of LED (Light Emitting Diode) used as lighting technology is superior to use of Compact Fluorescent Lamps (CFL) as it does not contain hazardous substances such as mercury as against CFL bulb and also emits significantly lower amount of Carbon dioxide (CO2) as compared to CFL bulb. III. The use of solar energy to generate electricity is an effect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ironment and measures required to deal with this menace. Open defecation in its general sense refers to the practice whereby people go out in fields, bushes, forests, open bodies of water, or other open spaces rather than using the toilet to defecate. The environment suffers as result of open defecation because it introduces toxins and bacteria into the ecosystem in amounts that it cannot handle or break down at a time. Further, it is an important cause of water pollution and causes various waterborne diseases such as diarrhea, typhoid, cholera and hepatitis. In order to eradicate the problem of open defecation, Ministry of Drinking Water and Sanitation, Government of India under its flagship "Swacch Bharat Mission" has vowed to achieve a clean and open defecation free India by 2^nd October, 2019 33. Open defecation free is defined as per Ministry of Drinking Water md Sanitation, Government of India as: "ODF is the termination of fecal-oral transmission, defined by: (a) No visible feces in the environment/villages; and (b) Every house as well as public/community institutions using safe technology option for disposal of feces." 34. Safe technology op....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es but includes activities relating to the use money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; 41. Section 2(119) of the CGST Act, 2017 reads as follows: "works contract" means a contract for building, construction, fabrication, completion, erection, installation fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the executive of such contract; 42. Section 7 of the CGST Act, 2017 reads as follows: (1) For the purposes of this Act, the expression "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oods or services or both, (5) The government may, on the recommendations of the Council, by notification specify categories of services the tax on intra-state supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where on electronic commerce operator does not have a physical presence in the taxable territory also he does not have a representative in the said territory, such commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. 44. The Circular No. 127/09/2010-ST dated 16.08.2010 regarding Service Tax on commercial training and coaching-clarification whether 'donation' is &#....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Insurance Company of India Limited (AICL) for implementation of "Integrated Village Development Programme" for improving infrastructure facilities in 50 villages in the States of Bihar, Jharkhand, Madhya Pradesh, Maharashtra and Uttar Pradesh. under this MoU arrangement, the applicant is required to provide Solar Street lights, Solar Water pumps and construction of toilets in the selected villages. By implementing this social welfare project, the AICL wanted to discharge its Corporate Social Responsibility (CSR) for the financial year 2016-17. 47. The IICA had submitted a proposal to AICL on 04.07.2016, namely, 'Developing a CSR road map and undertake CSR projects'. Thereafter, a MoU was signed between the two on 03.08.2016 for conducting a comprehensive baseline and need assessment survey. Thereafter, the IICA had submitted a Detailed Project Report (DPR) to AICL. 48. As per the Detailed project Report (DPR) submitted by the applicant, IICA to M/s AICL, further study and secondary data analysis was conducted to identify 50 underserved villages from the five states to take up following much-needed interventions in the selected villages with an objective of making a m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e village. Solar Street Lights Minimum 20 solar lights to be installed in each village having population structure between 0-500 households. 30 solar street lights to be provided to villages having 500-1000 household. 40 solar street lights to be provided to all villages having more than 1000 households. Construction of Household Toilets Villages having 0-500 households-cover at least 25% households or 100 toilets, whichever is lower. Villages having 500-1000 households-cover 25% household or 130 toilets per village, whichever is lower. Installation of Solar Water Pump Villages: 54. Objectives: 1. Improved, easy and quick access of safe water 2. Availability of water throughout the day and night even in non-electrified locations. 3. Environment conservation by using solar energy instead of electricity of the water pump with boring. Installation of Solar Street Lights: 55. Lighting is the basic amenity which is needed by all. Most of the villages in India do not have adequate facilities for street lighting, Installation of solar street lights is proposed to improve safe navigation on village streets and conserving energy th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub section (1) of section 9 of the said Act, as is in excess or said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) Of the said Table, namely:- Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) 1. Chapter 99 Services by an entity registered under section 12AA of the Income Tax Act, 1961 (43 of 1961) by way of Charitable activities. Nil Nil 76 Heading 9994 Services by way of public conveniences such as provisions of facilities of bathroom, washroom, lavatories, urinal or toilets. Nil Nil 64. The issues for decision in this case are: (i) Whether the activities of the applicant can be considered as supply of goods or services and whether the applicant is liable to pay GST on the amount received by them from AICL if the Said amou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e applicant has also mentioned that as per Service Circular No. 127/09/2010- ST dated 16.08.2010, the amount received by them from AICL should be considered as grants-in-aid and the same cannot be called "consideration" towards services supplied by them to the beneficiaries. 68. However, it is observed from the said circular that the main issue which has to be examined in such cases is the presence or absence of a link between the consideration and the taxable service. In case, the amount paid and service provided have no link or nexus, the same would be treated as non-taxable grant-in-aid. However, if the amount paid and the service provided have link or nexus, the said amount would be treated as consideration for the said services. In the present case, there is a direct link between the amount paid and the supply of taxable service of installation of solar pumps, solar street lights and construction of toilets. The MoU clearly provides that the amount of Rs. 20,35,76,800 is to be paid by AICL to the applicant for installation of specific numbers solar pumps and solar street lights and for construction of Specific numbers of toilets. Further, the MoU specifies the details of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) of the Income Tax Act, 1961 does not cover all incomes or activities of the applicant. The exemption under said provisions are admissible based on the nature of activity and source of such incomes. In the present case, such income has not been received by the applicant for either any Charitable purpose of for running any Institute. Hence, exemption under CGST Act, 2017 on income is admissible only if the Same is towards charitable activity. 73. It is observe that vide clause (r) of para 2 of the said Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, the expression "charitable activities" has been defined as follows: (r) 'charitable activities" means activities relating to- (i) public health by way of,- (A) care or counselling of (I) terminally III persons or persons with severe physical or mental disability; (II) persons afflicted with HIV or AIDS; (III) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or (B) public awareness of preventive health, family planning or prevention of HIV infection; (ii) advancement of religion, spirituality or yoga; (i....