TaxTMI 
TaxTMI 
2019 (9) TMI 694
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....e MPGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE: 1. M/s. Director of Skills Development Department of Technical Education Skill Development and Employment Govt of Madhya Pradesh (hereinafter referred to as "the Applicant"), having their registered office at Global Skill Park ITI Building Raisen Road Govindpura Bhopal Madhya Pradesh is unregistered in GST. 2. The project for the Establishment of Centre for Occupational Skills Acquisition within the Global Skills Park (herein after referred as GSP) in Bhopal, Madhya Pradesh was awarded to Directorate of Skill Development, Department of Technical Education, Skill Development & Employment, Government of Madhya Pradesh. 3. The said Project will assist the Government of Madhya Pradesh (GOMP) in transforming its technical and vocational education and training (TVET) system to create a skilled workforce that meets the evolving development needs of the state. 4. The project will establish a new advanced TVET Institute of international standards to introduce h....
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.... a. International Training Method with On-Job trainings. b. World Class Industrial Machinery, Tools & Equipment's. c. State of art classrooms, workshops and other facilities for students. d. Partnership with Institute of Technical Education Singapore for course curriculum and teacher training. 14. Global Skills Park (GSP), is a new-age world class technical training institution for providing career cluster curriculum skilling courses and opportunities of overseas employment, is getting established in Bhopal, Madhya Pradesh, India. 15. GSP will provide world-class technical training in precision engineering sector with six career oriented trades namely Conventional Lathe, Conventional Milling, CNC Milling, CNC Turning, Surface Grinding and Machining and Metrology with soft skills add on courses like IT Skills and Communication Skills. 16. As the state of Madhya Pradesh is developing state of India and mainly dependent of agricultural activities hence government wants to stimulate the industrial growth in the state of MP. To promote this objective skilled manpower is the need of the hour keeping this objective in mind the Global skill Park is b....
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.....6 An agreement was executed on 28.09.2018 between Directorate of Skill Development, Department of Technical Education, Skill Development & Employment, Government of Madhya Pradesh ("Client") and ITE Education Services Pte. Ltd, a Singapore based Consultancy Company. 6.7 The Project is to be executed by the ITE Education Services Pte. Ltd, Singapore between Nov 2018 to May 2023 the total consideration has been decided to be USD $ 38,12,740/-. Which is to be paid in 11 instalments. 6.8 In this regard we would like to reproduce here the Clause 38.1 of the Agreement describing the consideration agreed between the parties: - The Contract price is US $ 3,812,740 (inclusive of Consultant country taxes). The lump sum amount is exclusive of provisional sums and contingency, which will be covered separately under the project, if required. The lump sum amount is exclusive of all Indian taxes, levies and duties imposed by the Applicable Law. If the Applicable Law requires any Indian taxes, levies or duties to be paid, the Consultant shall be entitled to invoice the Client for a higher amount such that, after the payment/withholding of the relevant Indian taxes, levies ....
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....specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. Extract from Notification No. 10/2017 Integrated Tax (Rate) dated 28th June 2017 Table SI. No. Category of Supply of Services Supplier of service Recipient of Service (1) (2) (3) (4) 1 Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient. Any person located in a non-taxable territory Any person located in the taxable territory other than non-taxable online recipient 6.14 Extracts of Notification No 9/2017 dated 28 June 2017, exempts certain services received from a provider of service located in a non taxable territory by the State Government in relation to any purpose other than commerce, industry or any other business or profession; Chapter 99 Services received from a provider of service located in a non- taxa....
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.... the provision of sec 5(3) read along with Notification No 10/2017 IT(R). In other words, whether applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above? 7. DISCUSSIONS AND FINDINGS: 7.1 According to Section 7 of CGST Act (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; and (c) the activities specified in Schedule I made or agreed to be made without a consideration; So there are 2 important elements to categorise any transaction as a supply i.e. -- Consideration and -- in the course or furtherance of business. 7.2 According to Section 2(17) of CGST Act "business" includes- (a) Any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; ....
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.... processes Therefore we can say that applicant is engaged in Business or profession as defined in the Section 2(17) of CGST Act. Further the supply might be chargeable to tax if it is falling under Notification No 11/2017 - Central Tax (Rate) dated 28lh June 2019 (Similar Notification No 08/2017 - Integrated Tax (Rate)]. Or vice versa exempt from tax if the outward supply of service falling under Notification No 12/2017 - CT (R) dated 28th June 2019 [Similar Notification No 09/2017 - IT (R)]. 7.4 Applicability of Reverse Charge under IGST for Import of Services The applicant desired to know, whether the services received by it from a provider of service located in a non-taxable territory would attract the provision of sec 5(3) read along with Notification No 10/2017 IT(R). In other words, whether applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above? According to Section 5(3) of IGST Act, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both....