TaxTMI 
TaxTMI 
2021 (1) TMI 597
X X X X Extracts X X X X
X X X X Extracts X X X X
....vernmental Authority (or a Government Entity) by way of any activity in relation 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. 2. The applicant has submitted that the Governmental Authority as per Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 (as amended) is as under: "(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 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution. (zfa) "Government Entity" means an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90per cent. or more participation by way of equity or control, to carry out a function entrusted by the Centr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rity (RUDA) for the work of Project Management consultant for preparing Estimates, Tenders, Evaluation of Tenders, consulting and supervision work of Affordable Housing (EWS-II Type) Project at Munjka RUDA Area and have submitted a copy of the Letter of Acceptance (LOA) issued by RUDA to them for the said work. They have submitted their point of view with regard to the aforementioned service supplied by them as under: (1) Contract for the service awarded involves supply of Service only; without involving supply of goods meaning thereby the service that they are providing to RUDA for the above work is Pure Service. * Meaning & scope of Pure Service is duly explained in detail by CBEC vide Question no.25 of FAQ on Government Services under Sectoral Series released. Notification no. 12/2017-Central Tax (Rate) notified certain supply exempt from Goods & Service Tax. This notification came into effect from inception i.e. 1st July 2017. Serial no. 3 of the said notification exempts Pure services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union territory or local aut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Development Act, 1976 with 100 per cent participation by government through appointed nominees. This fact can be verified from official website of RUDA under 'About Us'. Screenshots of the same are attached herewith. Appointment of the members of development authority is governed by section 22 of the Gujarat Town Planning & Urban Development Act. (4) As regards functions, definition refers to function entrusted to a Municipality under article 243W of the Constitution or to a Panchayat under article 243G of the Constitution. Article 243W of the Constitution of India is reproduced herein below: "243W. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow- (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, Disqualifications for membership. Powers, authority and responsibilities of Municipalities, etc. THE CONSTITUTION OF INDIA (Part IXA.-The Municipalities.-Arts. 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....horities and other statutory authorities functioning in Urban Development. (iv) To guide, direct and assist the local authorities of authority and other statutory authorities function in Urban Development Area in the matter pertains to planning, development area in the matter pertaining to planning, development and use of Urban land. (v) To control the development activities in accordance with the development plan in the Urban Development Area. (vi) To execute works in connection with water supply, disposal of sewerage and provision of other services and amenities. (vii) To acquire, hold manage and dispose of property movable or immovable as it may deem necessary. (viii) To enter into contract, agreement or arrangement with any local Authority/Person or organization as the urban development authority may consider necessary for performing its functions. (ix) To carry out any development work in the urban Development Area as may be assigned to it by the State Government from time to time. (x) To exercise such other powers and performs such other function as are supplemental, incidental or consequential to any of the foreg....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... which are akin with those of Rajkot Urban Development Authority. Further Rajasthan Authority for Advance Ruling in the case of M/s. PDCOR Limited clearly held vide Ruling no. RAJ/AAR/2018-19/13 that Jaipur Development Authority as Governmental Authority. Tagline of Jaipur Development Authority is "JDA, where town planning is tradition". Functions of Jaipur Development Authority are also akin with that of Rajkot Urban Development Authority. Thus, various judicial pronouncement also supports their contention. In view of the above, they requested to kindly deliver the verdict considering above brief & facts of the case. Though all the complete supporting documents were already submitted earlier, however relevant part of the same are attached for ready reference. 6. The applicant has made additional submission vide their letter dated 20.08.2020 (which was received by email on 27.08.2020) in which they have mentioned that in furtherance to their earlier submission, they wish to clarify that they have sought ruling under clause (b) of section 97(2) of the CGST Act; that to reiterate briefly what has been stated in their application & written submission is that they are engaged by Raj....
X X X X Extracts X X X X
X X X X Extracts X X X X
....during the course of personal hearing, we find that the issue to be decided is whether the Rajkot Urban Development Authority (Accredited Department of Gujarat State Government) falls under the definition of Government Authority or a Government entity as defined under para 2(zf) & 2(zfa) of the Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 and consequently Pure Service which the applicant is providing to them is exempt from tax or not by virtue of Notification No.12/2017. But before examining the above issue, we are required to find out the correct classification of the services provided by the applicant and the GST liability on the same for which we will be required to go through the Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 which contains the Chapter, Section, Heading, Group or Service Code of classification of services along with their GST rates. On going through the said notification, we find that Professional and Technical service provided by the applicant are classifiable under Heading 9983 of Notification No.11/2017-Central Tax(Rate) dated 28.06.2017 (which appears at Entry No.21 of the said notification) on which GST liability is 18%(9% SGST + ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to a (i) Panchayat under Article 243G of the Constitution; or (ii) Municipality under Article 243W of the Constitution. 12. On going through the above, it can be seen that the first condition to be verified is as to whether the services supplied by the applicant are pure services or otherwise. We, therefore, are of the opinion that if and only if, the first condition is satisfied, only then we will be required to look into the applicability of the other two conditions i.e. whether the other two conditions are also satisfied as per the current contract/agreement made by the applicant with Rajkot Urban Development Authority. So, the first condition to be discussed is as to what is meant by pure service? Since 'pure service' has not been defined under GST, the same can be construed in general terms as any supply which is either deemed as services under Schedule II of CGST Act or which are not covered under the definition of goods shall be categorized as pure services. However, as per the notification, works contract services or other composite supplies involving supply of any goods are not covered in entry no.3 of aforementioned notification. In other words, if ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....have hardly devoted any space in their submission to prove the fact that the services supplied by them to the Rajkot Urban Development Authority are pure. They have not even submitted the copy of the agreement made by them with the Rajkot Urban Development Authority with respect to the aforementioned service supplied by them. Here, we would like to emphasise that the primary condition for an applicant to be eligible for the exemption by virtue of Entry No.3 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 (as amended from time to time) is that the services supplied by them are pure i.e. services supplied/provided without any supply of goods and excluding Works Contract service or other composite supplies involving supply of any goods, and only if it is proved or established that the services provided by them are pure, will the applicability of the other conditions i.e. whether the recipient of the services is a Governmental Authority or Government Entity, whether the services supplied are in relation to functions entrusted to a municipality or a panchayat under Articles 243G or 243W of the Constitution etc. will be looked into. However, under the above circumstances, i....