TaxTMI 
TaxTMI 
2019 (6) TMI 1483
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....e property service provided by NDDB to an educational institute would be exempted under Sr. 4 of Notification No. 12/2017-Central Tax (Rate) ? 3.1 M/s. NDDB referred to the definition of 'Governmental authority' given under Section 2(16) of the Integrated Goods and Services Tax Act, 2017 and submitted that since it is set up by an Act of Parliament, it would be 'Governmental authority' from GST perspective as per clause (i) of the said definition. It submitted that the condition of 'ninety percent or more participation by way of equity or control, to carry out any function entrusted to municipality under Article 243W of the Constitution' given below clause (ii) of the definition would not be applicable to clause (i) of the said definition. In support of this contention, it relied upon the decision of Hon'ble High Court of Patna in case of Shapoorji Paloonji & Company Ltd. Vs. CCE, Patna = 2016 (3) TMI 832 - PATNA HIGH COURT. 3.2 As regards the eligibility of exemption under Sr. 4 of Notification No. 12/2017-Central Tax (Rate), M/s. NDDB submitted that one of the function entrusted to municipality is 'promotion of cultural, educational and aesthetic aspects', the scope of which is....
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.... of Hon'ble Madras High Court in the case of Dr. T. Rajakumari and others vide W.P. No. 39022 and 36735 of 2015 wherein Hon'ble High Court stated that till the time decision of High Court is struck down by the Supreme Court or the Supreme Court stays the operation of the judgement, the decision of High Court would be applicable. 7.2 The appellant has submitted that the word used in the definition is 'or' between (i) & (ii) and both are separated by way of semi colons, which means the condition of 90% or more participation by way of equity or control, to carry out any function entrusted to municipality under Article 243W would be applicable to body which is established by the Government. Therefore, the board / body set up by an act of parliament is independent and is not bound by above condition. The Judgement of Hon'ble High Court of Patna in the case of Shapoorji Paloonji & Company Ltd. Vs. CCE, Patna = 2016 (3) TMI 832 - PATNA HIGH COURT has been relied upon in this regard. The Advance Ruling issued by the Uttarakhand Advance Ruling Authority in the case of NHPC Limited [2018-VIL-284-AAR] = 2018 (11) TMI 1265 - AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND has also been referred. T....
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....ducational Society'. The said Sr. 4 of Notification No. 12/2017-Central Tax (Rate) reads as follows :- TABLE Sl.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 4 Chapter 99 Services by [* * *] governmental authority by way of any activity in relation to any function entrusted to a municipality under article 243 W of the Constitution. Nil Nil 12.1 As the aforesaid Sr. 4 of Notification No. 12/2017-Central Tax (Rate) provides exemption to specified services by 'governmental authority', the appellant has raised a question whether it would be qualified as 'Governmental Authority' from GST perspective. The term 'Governmental Authority' has been defined at clause (zf) of Para 2 of the said Notification as follows :- "(zf) "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 90 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 or to a Panchayat under artic....
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....er of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit. 13.1 In the definition of "Governmental Authority" at clause (zf) of Para 2 of the Notification No. 12/2017-Central Tax (Rate), there is a long line after the words "Governmental Authority" means an authority or a board or any other body', which is applicable to both sub clauses (i) and (ii). Further, had it been the intention of the legislature to make the conditions below clause (ii) applicable only to clause (ii) and not to clause (i), then such conditions could have been written alongwith clause (ii) and there was not need to write such conditions separately below clause (ii). It is therefore evident that the condition that an authority / board / other body, to be qualified as 'Governmental Authority' should have been set up or established 'with 90 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 or to a Panchayat under article 243G of....
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....Central Tax (Rate) would be available to it, if it fulfils both the limbs of the condition below sub-clause (ii) of definition of 'Governmental Authority. The said Para 7 and 8 of the Advance Ruling is reproduced below for ease of reference. "7. We therefore observe that the exemption shall be available to the applicant if the applicant fulfils the common condition namely "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". As it is not submitted by the applicant as to whether it fulfills the said condition, if in the case of the applicant, this condition is fulfilled, then it attract the benefit of the exemption, otherwise not. 8. In view of the foregoing, we rule as under :- R U L I N G (i) National Dairy Development Board (24AADCN2029C1Z5) would be qualified as 'governmental authority' from Goods and Services Tax perspective, if it fulfils the condition namely 'with ninety percent or more participation by way of equity or control to carry out any function entrusted to a municipality under article 243W of the Constitution". (ii) ..........." 13.6 As the app....
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....e the supplier is providing. In order to be covered under Sr. 4 of Notification No. 12/2017-Central Tax (Rate), the service by a 'governmental authority' itself should relate to an activity listed under Article 243W read with Twelfth Schedule of the Constitution. 'Renting of Immovable Property' is not covered under Article 243W read with Twelfth Schedule of Constitution. 14.4 In view thereof, we hold that the exemption provided vide Sr. 4 of Notification No. 12/2017-Central Tax (Rate) is not admissible to appellant for providing service of 'Renting of Immovable Property' to 'Anandalya Educational Society'. 15. Therefore, we modify the Advance Ruling No. GUJ/GAAR/RULING/2019/2 dated 22.02.2019 = 2019 (3) TMI 1119 - AUTHORITY FOR ADVANCE RULING, GUJARAT of the Gujarat Authority for Advance Ruling by holding that - (i) In absence of sufficient information, it cannot be determined whether M/s. National Dairy Development Board is "Governmental Authority" as per definition of "Governmental Authority provided vide clause (zf) of Para 2 of Notification No. 12/2017-Central Tax (Rate) and corresponding State Notification No. 12/2017-State Tax (Rate), or otherwise; and (ii) Exemption pr....