TaxTMI 
TaxTMI 
2020 (3) TMI 296
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....loor, Nelson Manickam Road, Aminjakarai' Chenna,-600029 (hereinafter referred as 'Applicant-) is registered under the GST Act 2017 vide GSTIN No. 33AAIFP7751M1ZR. The applicant is engaged in providing Housekeeping/Cleaning including Pest Control services and Security services as bundled services to Directorate of Medical Education(DME) that includes Government Medical College Hospitals, Government Medical Colleges and Government Nursing Colleges. The applicant has sought Advance Ruling on the following questions:- 1. Whether services provided by Padmavathi Hospitality & Facilities Management Services (PHFMS) to DME are classifiable as a function entrusted to a Panchayat or a Municipality under the constitution? If not then can we conclude that no exemption is available to PHFMS? 2. Whether services provided by PHFMS to DME is exempted under Sl.No.3 of Notification 12/2017 Central Tax dated 28.06.2017 read along with amendment dated 25.01.2018? 3. Whether Services provided by PHFMS to DME including institutions of Government Hospitals and colleges are liable for GST or not? If yes, what is the rate of GST applicable to these services 4. Whether se....
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....not falling under the above categories of Article 243G and 243 W of Indian Constitution and so GST exemption is not available in this instance. iii. Sanitation and similar services are classified under SAC 99945. The applicant has referred to the Advance Ruling order of West Bengal, wherein it is ruled that ".......... It includes sweeping and cleaning, but only with reference cleaning of road/street. Cleaning of hospital premises is not therefore classified under sanitation or similar service. The service, the applicant bundled under the description 'Scavenging Services' are therefore not exempt under S.No.3 of exemption notification." 3.1 The applicant was given an opportunity to be personally heard and was heard on 26.09.2019. The applicant appeared and stated that they have filed a W.P. No.24412 of 2019 & WMP No. 24145 of 2019 on the same issue against TamilNadu Medical Services Corporation & Directorate of Medical Education and against the Department. The State Jurisdiction officer also appeared for the hearing and submitted that the WP was filed in Hon'ble High Court and gave a written submission stating that the applicant is not eligible for exemption at Sl.No. 3....
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....f services ie., pure services and not for services involving both goods and services no exemption can be granted to these kinds of services. Further the exemption is granted only when pure services are related 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 security services are neither enlisted in Article 243G nor in Article 243W of the Constitution. The hospital services are listed in Article 243G and in Article 243W of the Constitution (Health and sanitation including hospitals Primary health centres and dispensaries). The concerned matter deals with the tender floated by the Directorate of medical education which involves hospital and security services to hospitals, medical colleges, college of nursing and school of nursing. Though DME is falling under State government the hospital and security services in DME are not related to functions entrusted to Panchayat/Municipality under Articles 243G & 243W. iii. Whether services rendered by Padmavathy hospitality & Facility management services to DME are liable for GST? Yes, the serv....
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....vice tax on the services provided to DME as these services were taxable and PHFMS was collecting and paying service tax under the old regime. And even under the GST regime, PHFMS has collected and paid GST from DME from 01.07.2017 to till date. PHFMS used to raise Tax Invoice to DME for the above mentioned services rendered inclusive of GST and even the DME were Clearing the bills including GST, Now that the old tender contract period has expired and they had to apply afresh for the new tender contract to DME, they had made an application for the open Tender floated by DME on 19/02/2019 for providing housekeeping, Security Services, Pest Control & Bio Medical Waste Management Services in 95 government medical institutions under the control of Director of Medical Education Tamilnadu. PHFMS has quoted the bid value of tender including the GST applicable for the services rendered. • However DME is of the opinion that the services provided to them is exempt from GST under exemption notification No 12/2017 - Central Tax (Rate) dt 28/06/2017 read along with amendment dt 25/01/2018 and the tender should be placed excluding GST. DME has based their opinion on note given by an ....
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....1. One of the functions listed in twelfth schedule under article 243W of the constitution is "Public Health Sanitation, conservancy and solid waste management". 2. Some of the functions listed in the eleventh schedule under article 243G of the constitution are "Health and sanitation, including Hospitals, Primary Health centres and dispensaries" • DME view on the above said points is based on section 39 of the Tamil Nadu District Municipalities Act, 1920 wherein they have relied on the objects of Expenditure connected with public health stating that expenditure towards public health includes "(a) the construction and maintenance of hospitals and dispensaries and temporary places of reception within the municipality or without the municipality for treatment of infectious diseases occurring in the municipality; building hospitals, dispensaries or places of reception for the sick in general" • Hence DME is of the opinion that all the 95 government hospitals coming under the said DME falls under the Municipality and that the functions entrusted to the municipality under article 243W of the constitutions is Public Health Sanitation, conservancy and soli....
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....s as stated in twelfth schedule means sanitation and similar services which are classified under SAC 99945 which includes sweeping and cleaning but only with reference to cleaning of roads and street and cleaning of hospital premises is not covered under sanitation or similar services. • Their argument is based on one of the very recent advance ruling passed by west Bengal authority dt 09/09/2019 vide order no 21/WBAAR/2019-20 = 2019 (9) TMI 514 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL in the case of Altabur Rahman Mollah carrying business in the trade name of M/s Reliable Hospitality service. The said Reliable Hospitality services provides services similar to the services provided by PHFMS namely,- 1. Mechanised and automated cleaning of the Hospital premises including the toilets. 2. Mechanised and automated cleaning of the different parts of the academic and hostel area including the toilets 3. Manual cleaning of different parts of the campus of the institute. The applicant also supplies cleaning materials incidental or auxiliary to provisioning the cleaning services. 4. Security services etc All the above said service....
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....ave prayed the Hon'ble High Court to pass an order of interim injunction restraining the Tamil Nadu Medical Service Corporation from initiating or taking any further steps in finalizing the tender pending disposal of the main writ petition. The authorised representative of the applicant, while furnishing the WP, has stated that,- • The Writ petition was filed not for clarification of applicability of GST on the services provided by them to Govt. Hospitals • The writ petition was on the following grounds:- • The procedure which has been adopted by TNMSC is contrary to Rule 29(d) of the Tamilnadu Tender Transparency Rules 2000 read with Section 10 of the Tender Transparency Act. It is a well settled law that all the bidders should be placed in a same position and a level playing field must be provided to all the bidders and any discrimination would fall foul of Article 14 of the Constitution of India. Hence they moved this petition under Article 226 of the Constitution of India 1949 seeking for justice as there is an imminent threat to the fundamental rights which are guaranteed under the Constitution of India • An interim injunctio....
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....7.11.2019 the applicant submitted the order copy of Madras High Court dated 14/11/2019 for the WP 24412 of 2019 and WMP No.24145 of 2019 vide their letter dated 27.11.2019 and requested for a further hearing. It is seen from the submissions that the Advance Ruling Authority is made a party to the writ filed along with the State Jurisdictional Officers. Hon'ble Court admitted inclusion of the new respondents. Further the Court in Para 3 and Para 4 of the Order have ordered as under:- 3. Learned Senior Counsel appearing for the petitioner submits that the Petitioner had made an application for advance ruling on the applicability of Goods and Service Tax in respect of the tender, which forms the subject of this writ petition, before the sixth respondent, and in view of the first proviso to Section 98(2) of the Central Goods and Services Tax Act, 2017, seeks a clarification from this Court for enabling the Sixth Respondent to pass orders in that application. 4. Having regard to the facts involved in this case, and in particular, the Counter Affidavit dated 12.11.2019 filed by the Third Respondent, the pendency of this Writ Petition shall not preclude the Sixth Respond....
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....3W. v. letter correspondences of TNMSCL dt. 10/8/2019 revising their bid for zone 5; vi. TNMSCL letter dtl4.8.2019 to applicant stating that GST is not applicable as per Notification No 12/2017 dt 28.6.2017 and hence, KRYSTAL is the LI for Zone 1 to 4 and to confirm for negotiation of price for Zone 5 without GST; vii. Reply letter to TNMSCL dated 16/8/2019 reiterating that GST is applicable for the services in question as they are ineligible for the exemption under Notification no 12/2017 viii. letter dt 17.8.2019 from TNMSCL rejecting their request ix. Screen shot of Advance Ruling application made by the client in the GST portal, Screen shot of page wherein the attachments made to the application is displayed 5.3 The applicant again vide their letter dated 06th January 2020 has inter-alia stated that the issue before the members is the services offered as per tender by PHFMS to DME is mainly Supply of Man power supply services (such as Managerial , Supervisors, House keeping staff, attenders and security staff ) which comes around 75% for all 3 shifts to 95 Hospitals and medical colleges covered under DME and the material portion c....
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....) to DME are classifiable as a function entrusted to a Panchayat or a Municipality under the constitution? If not then can we conclude that no exemption is available to PHFMS? 2. Whether services provided by PHFMS to DME is exempted under Sl.No.3 of Notification 12/2017 Central Tax dated 28.06.2017 read along with amendment dated 25.01.2018? 3. Whether Services provided by PHFMS to DME including institutions of Government Hospitals and colleges are liable for GST or not? If yes, what is the rate of GST applicable to these services 4. Whether services rendered by PHFMS to DME can be classified as pure services or Composite Supplies? 7.1 The Hon'ble High Court has gave an order dated 14/11/2019 for the WP 24412 of 2019 and WMP No.24145 of 2019 that "the pendency of this Writ Petition shall not preclude the Sixth Respondent from deciding the aforesaid application for advance ruling said to have been made by the petitioner."Accordingly, this application is taken up by this authority. The question before this authority is the applicability of GST on the services for which Tender No. 432/outsourcing/DME/TNMSC/ ENGG/ 2019 dated 19/02/2019 for 'outsourcing ....
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.... statement or issuance of the said notice, order or certificate in such Forms as appended to these rules. CBIC has issued Circular No. 25/2017 dated 21st December 2017 under the provisions of Section 168(1) of the GST Act 2017, on the Manual filing of applications for Advance Ruling is prescribed. In the Circular, it is stated that,- "2. Therefore, in exercise of the powers conferred by sub-section (1) of section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as 'the CGST Act') on the recommendations of the Council and for the purpose of ensuring uniformity in the processing of such manual applications till the advance ruling module is made available on the common portal, the following conditions and procedure are prescribed for the manual filing and processing of the applications. Form and Manner of Application to the Authority for Advance Ruling 3. An application for obtaining an advance ruling under sub-section (1) of section 97 of the CGST Act and the rules made thereunder, shall be made in quadruplicate, in FORM GST ARA-01. The application shall clearly state the question on which the advance ruling is sought. The application shall ....
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....Tamilnadu Medical Service Corporation has floated a tender for outsourcing of house keeping and security services in which the applicant has participated. > Para 4 & 5 states that KRYSTAL , a bidder to the said tender has submitted their bid by stating GST as "Zero"and emerged as the successful bidder in respect of Zone 1 to Zone 4 and that the applicant would have been the successful bidder after including GST and that KRSTAL had taken a calculated risk in submitting their bid without GST and subsequently cannot amend their bid which is contrary to Transparency in Tenders Act 1988. Non inclusion of GST indicated that the level playing field was not adopted. • Para 6 states that Form F of the tender document reveals that when the bid is submitted, the applicable taxes would also have to be included while submitting the bids and in the instant case GST would be applicable on the services in the tender. • Para 7 states that TNMSC responded to their representation with letter dt 14.8.2019 stating that as GST is not applicable in the tender, the bid of KRYSTAL was the lowest. • Para 8 states that the applicant vide their letter 16.8.2019 it was....