TaxTMI 
TaxTMI 
2021 (1) TMI 427
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....to create centres of excellence for providing knowledge, education, training and research facilities of high order in specific fields which would advance education. The relevant extract of Section 4 of the Nirma University Act has been reproduced herein below, for ready reference: (ii) to create centres of excellence for providing knowledge, education, training and research facilities of high order in specific fields of science, technical, dental, medial, paramedical, physiotherapy, pharmacy, commerce, management, education and humanities and other related professional education as per its current status and such other manner as develop in future, including continuing education and distance learning; 4. During the normal course of its operations, the applicant procures several inputs and input services. At times, it requires the assistance of an advocate and accordingly, procures legal services including but not limited to representational services from individual advocates, including senior advocates. These services form an important input service for the applicant. 5. The GST regime envisages two types of supplies which are covered under RCM. The first type depends....
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.... university relevant to the needs of the economy at national and global level. During the Normal course of its operations, the University procures several input services including legal services. 12. The applicant refers to Notification No.13/2017-Central Tax (Rate) dated 28th June, 2017,which requires GST to be discharged under reverse charge mechanism in case of specific services. The list of services inter-alia includes: • Services supplied by an individual advocate, including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, or by a firm of advocates, by way of legal services, to business entity. • Services supplied by an arbitral tribunal to a business entity. 13. Considering the wide definition of the term 'business", the applicant is of the view that they would be considered as a business entity from GST prospective. Accordingly, legal services received by them would be subject to tax under reverse ch....
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....ith the following condition. While interpreting this punctuation, full Bench of the Punjab and Haryana High Court in Rajindra Singh v. Kultar Singh [AIR 1980 P&H 1: ILR (1979) 2 P&H 486 (FB)] = 1979 (7) TMI 243 - PUNJAB AND HARYANA HIGH COURT held as follows: "After the words 'administration of justice' in Entry 3, there is a semicolon and this punctuation cannot be discarded as being inappropriate. The punctuation has been put up with a definite object of making this topic as distinct and not having relation only to the topic that follows thereafter." 19. To buttress above point, the applicant would like to further submit that the definition of the 'Governmental Authority' was similar in the erstwhile service tax legislation and during erstwhile regime. Hon'ble Patna High Court had on occasion to deal with the similar issue in the case of Shapoorji Paloonji & Company Ltd Vs CCE, Patna (2016-TIOL-556-HC-PATNA-ST] = 2016 (3) TMI 832 - PATNA HIGH COURT. In that decision, the Court held that the condition attached to the definition viz. participation of government by way of 90% or more of equity and control to carry out the functions of municipality under Article 243W of t....
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....ting, preserving knowledge and understanding and making arrangements for training in higher education including professional education and allied fields. 24. The applicant wishes to understand if such service of providing higher education provided by them would qualify for exemption under Sr. No. 4 of the exemption notification. 25. From perusal of Article 243W, the applicant understands that one of the function entrusted to municipality is promotion of education aspects. Entire list of activities contained in Article 243W is provided in Annexure D. The relevant provision of Article is reproduced hereunder: "13. Promotion of cultural, educational and aesthetic aspects." 26. From review of above, the applicant submitted that the scope of function is very much wide and is not limited to one or two activities relating to education. In fact, the Constitution neither specifies nor restricts the scope of education covered by Article 243W. Accordingly, any function for promotion of education aspect should be covered within provisions of this Article. It should cover conferment of degree, diplomas or grant certificates, or other academic titles to students. Provision of h....
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....or opinion. Relevant extract is provided herein under: 5(1) No person shall be excluded from any office of the University or from membership of any of its authorities or from admission to any degree, diploma or other academic distinction or course of study on the sole ground of sex, race, creed, caste, class, place of birth, religious belief or political or other opinion. 30. Having said that, the Applicant would like to submit that incorporation of education institute and provision of various related services for offering training in higher education can be construed to be activities in relation with promotion of education. 31. Additionally, the Applicant would like to submit that the term 'in relation to' used in above exemption is very much wide enough to cover every kind of services provided in respect of functions as per Article 243W. 32. The Applicant wishes to rely on judgement of State Waqf Board Vs, Abdul Azeer sahibas reported in AIR 1968 Mad 79, wherein it was held that ""in relation to" are words of comprehensiveness which might both have a direct significant as well as an indirect significance, depending on the context. They are not words of restricti....
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....y out any function, would be applicable to the body which is established by the Government. This means that the board/ body set up by an Act of Parliament or State legislature is independent and is not bound by above condition. 39. However, recently, a circular is issued vide reference No. 76/50/2018GST dated 31st December, 2018 wherein the clarity is provided on similar aspect or legal interpretation. Accordingly, to Circular, it has been clarified that the long line written in clause (a) in Notification No.50/2018-Central Tax dated 13.09.2018 is applicable to both the items (i) and (ii) of clause (a) of the said Notification. 40. In other words, the provisions of Section 51 of the CGST Act, are applicable only to such authority or a board or any other body set up by an Act of parliament or a State legislature or established by any Government in which fifty-one per cent. or more participation by way of equity or control, is with the Government. 41. On conjoint reading of above, the Applicant wishes to know whether the University is liable to be registered as a Deductor under GST. 42. At the time of personal hearing held through Video Conferencing on 18.06.2020, the Aut....
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.... applicant stated that during the normal course of its operations, the University procures several input services including legal services. Considering the wide definition of the term 'business", the applicant is of the view that they would be considered as a business entity from GST prospective. Accordingly, legal services received by them would be subject to tax under reverse charge mechanism. 46.2 The applicant referred to Notification No.13/2017-Central Tax (Rate) dated 28th June, 2017,which requires GST to be discharged under reverse charge mechanism in case of specific services. The list of services inter-alia includes: • Services supplied by an individual advocate, including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, or by a firm of advocates, by way of legal services, to business entity. • Services supplied by an arbitral tribunal to a business entity. 46.3 The applicant further pointed out th....
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....xempted. For proper appreciation of the case, relevant portion of the amended Entry of Sr. No. 45 of the said notification is reproduced herein below: Sr.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (percent) Condition 45 Heading 9982 or Heading 9991 Services provided by- (a) an arbitral tribunal to- (i)--------------; (ii)-------------; (iii) a Central Government, State Government, Union Territory, local authority, Governmental Authority or Government entity. (b) a Partnership Firm of Advocates or an individual as an advocate other than a Senior advocate, by way of legal services to- (i)-------------; (ii)-----------; (iii)---------; (iv) a Central Government, State Government, Union Territory, local authority, Governmental Authority or Government entity. a Senior advocate by way of legal services to- (i)--------------; (ii)-------------; (iii) a Central Government, State Government, Union Territory, local authority, Governmental Authority or Government entity. Nil Nil Further, the definition....
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.... Government. 49.1 From the applicant's submission and the Nirma University Act, 2003, it is amply clear that the applicant is a private university set up with the objectives of teaching, research and training at the university, by an Act passed by the Gujarat State Legislature, in which Government is having zero percent participation by way of equity or control. Being the similar issue raised by the applicant concerning the legal interpretation as clarified in Circular No. 76/50/2018-GST dated 31st December, 2018, we can state that the applicant does not fall under the "governmental authority", as defined under Section2(16) of the IGST Act, 2017. We, therefore, conclude that the condition of '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' would apply to both authorities whether set up by an Act of Parliament or a State Legislature; or established by any Government. 50. In view of the above, we hold that the applicant would not be eligible for claiming benefit of the exemption as provided in Sr. No.45 of the Notification No.12/2017-Central Tax (Rate) dated 28....
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....) dated 28.06.2017, which exempts: "Services provided- (a) by an educational institution to its students, faculty and staff;-----------" 55.1 Thus, the services provided by an educational institution to students, faculty and staff are exempt. The term "Educational Institution" is defined in para 2(y) of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, which reads as under: (y) an "educational institution" means an institute 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; 55.2 Within the term "educational institution", sub clause (ii) covers institutions providing services by way of education as a part of a Curriculum for obtaining a qualification recognised by any law for the time being in force. This is an area where doubts have been persisted as to what would be meaning of "education as a part of a Curriculum for obtaining a qualification recognised by....
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....authority; or (c) Govt. Agencies or other specified persons are required to deduct TDS @ 2% (IGST 2%, or CGST 1% + SGST 1%)from the payment made or credited to supplier, for supply of taxable goods or services or both, where the total value of such supply under a contract is more than Rs. 2.50 lacs." Further, Notification No. 33/2017-Central Tax dated 15th September, 2017 was issued specifying persons under clauses (a) and (b) of sub-section (1) of section 51 of the said Act and other persons specified therein required to deduct TDS u/s 51. Above Notification No.33/2017 dated 15.09.2017 was superseded by Notification No. 50/2018-Central Tax dated 13.09.2018, which provides that TDS provisions u/s 51 will be applicable w.e.f 01.10.2018 and provides other specified persons as below: (a) 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 fifty-one per cent. or more participation by way of equity or control, to carry out any function; (b) Society established by the Central Government or the State Government or a Local Authori....