TaxTMI 
TaxTMI 
2021 (8) TMI 356
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....r the Pure services provided to Zilla Panchayat, City Corporations, Education institutions and Rural Water Supply Divisions are exempted under Article 243G and 243W? 3. Admissibility of the application: The question is about "applicability of a notification issued under the provisions of this Act" and hence is admissible under Section 97(2)(b) of the CGST Act 2017. BRIEF FACTS OF THE CASE 4. The applicant furnishes some facts relevant to the issue: 4.1 The Applicant is a Contractor providing manpower services to Zilla Panchayat and City Corporation, Educational institutions, Rural Water Supply Divisions. The nature of manpower services provided are in the form of 'D' Group, Data Entry Operators, Cooks, Assistant Cooks, Security Guards, cleaning staff and clerical staff. 4.2 The Applicant states that they are providing Manpower Services like Data Entry Operator, Drivers, "D" Group etc. to Zilla Panchayat departments and they are claiming that manpower services provided to them are exempted from GST under SI.No.3 of Notification No. 12/2017-Central Tax (Rate), dated 28th June 2017 as pure services. 4.3 The Applicant contended that they are providing Manpower Service....
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....ment in compliance to the Audit Report; that in this regard a reference is made to the Dy. Commissioner, Tax Department, Dharwad and based on the information received from him further action will be initiated. 2. Letter of Zilla Panchayat, Gadag dated 08-10-2020 addressed to him. In the letter it is informed to the taxpayer that -with regard to payment of Service Tax and GST for supply of manpower during 2017-18, and 2018-19, the Chief Accounts officer during the Audit on the record has pointed out that same is not correct; that in this regard a reference is made to the revenue department for seeking clarification; that till receipt of clarification the GST part will not be paid him. 3. Letter of Zilla Panchayat, Gadag dated 29.09.2020 addressed to Special Officer (Z.P), and Ex-Officio Deputy Secretary to Government, Finance Department, Bengaluru, contents of the letter are as under: "Zilla Panchayat, Gadag is hiring the services of Stenographer, Data Entry operator, Drivers and Attenders from an outsourced agency. The agency is adding 18% GST and the same is being paid to the agency after TDS @ 2%. The AG audit team during the compliance audit of the acc....
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....pecified in the corresponding entry in column(4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column(5) of the said Table, namely:- SL.No. Chapter Description of Service Rate Condition 3 Heading 9954 (Construction services) 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 authority or a Governmental 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. NIL NIL Notification No.12/2017-State Tax (Rate) dated 29.06.2017 is similarly worded. 6. In terms of the above Notification-the GST leviable is nil in respect of - 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 authority or a Governmental auth....
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....ctivity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India. 11. Hence, the Authority on the Advance Ruling in its ruling - sounded caution as to adhering to the conditions attached to the Notification i.e., activities are in relation to functions listed under Article 243G and 243W. 12. In the instant case when, such documents are not submitted-Authority may consider to call for the relevant records for examination of functions for which the supply is being made. If the applicant fails to submit the records the Authority may reject the application." 6. This office had addressed a letter to the Assistant Commissioner of Commercial Taxes, LGSTO-320, Hubballi on 17-04-2021 to file comments on the application filed. In response to the same, the said officer has furnished comments as below: "In case of M/s. Madivalappa Karveerappa Belwadi opinion is sought regarding advance ruling related to 'GST on supply of man power services'. Further, on verification of the cited subject, as per Notification No. 12/2....
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....services as per SI.No. 66(Heading 9992) of Notification No. 12/2017 central Tax(R) dated 28.06.2017 12. Whether the manpower services provided to Zilla Panchayat, City Corporation/Municipalities is exempted under entry no.3 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, is to be examined and the said entry reads as under: "Pure Services (excluding works contract service or other composite supplies involving any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority 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." 13. From the above said entry of the notification it is observed that, in order to claim exemption on supply of man power services two conditions should be satisfied: i. Pure Services (excluding works contract service or other composite supplies involving any goods) provided to the Central Government, State Government or Union territory or local authority or a Governmental authority ii....
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.... 12. Fuel and fodder. 13. Roads, culverts, bridges, ferries, waterways and other means of communication. 14. Rural electrification, including distribution of electricity. 15. Non-conventional energy sources. 16. Poverty alleviation programme. 17. Education, including primary and secondary schools. 18. Technical training and vocational education. 19. Adult and non-formal education. 20. Libraries. 21. Cultural activities. 22. Markets and fairs. 23. Health and sanitation, including hospitals, primary health centres and dispensaries. 24. Family welfare. 25. Women and child development. 26. Social welfare, including welfare of the handicapped and mentally retarded. 27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes. 28. Public distribution system. 29. Maintenance of community assets. 13.4 243-W. Powers, authority and responsibilities of Municipalities, etc Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow (a) the Municipalities wi....
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....epartments. But these manpower services are not provided 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. Hence provision of such manpower services is liable to tax at 18% (9% CGST and 9% SGST). 13.7 The Provision of man power services to Zilla Panchayat, City Corporation/Municipalities are exempted only when they are provided 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. 13.8 The Applicant has submitted a copy of work order given by office of Deputy Commissioner of Chikkaballapur which says that the applicant has to provide Manpower Services like clerical staff (FDA, SDA), Typists, cleaning staff, cook, assistant cook, teachers, staff nurse and watchman to district and taluk offices of Social Welfare Department and hostels, residential schools working under Social Welfare Department, Government of Karnataka. 13.9 The Provision of manpower services like cleaning staff,....