TaxTMI 
TaxTMI 
2021 (8) TMI 783
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....Long Jump/ High Jump Court, Toilet Block, Chainlink Fencing type Compound wall, Entrance gate, Parking, Bore well, Security cabin, Service Room. The said construction involves the supply of labour plus supply of various goods such as cement, bricks, sand, TMT, steel wires, sanitary wares etc. 2. The applicant has submitted that the activity of "construction of sports complex" is a supply of service within the meaning of Section 7(1)(a) of the CGST Act, 2017 read with Section 2(102) of the said Act. The said supply of service is an intra state supply within the meaning of Section 8(2) of the IGST Act, 2017 and is chargeable CGST under Section 9 of CGST Act, 2017 and SGST under Section 9 of CGST Act, 2017. 3. The applicant has submitted that Section 2(119) of CGST Act, 2017 defines "work contract" as: Work Contract means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration, commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. The government vide Noti....
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....on 2(119) of the CGST Act, 2017. 6. The applicant is of the view that since the said Sports Complex is not for the purpose of any business or profession and also that the recipient of service i.e. AUDA, is local authority within the meaning of Section 2(69) of the CGST Act 2017, accordingly, the said service of "Development and Construction of Sports Complex" for the Ahmedabad Urban Development Authority, merits classification under the entry at Sr. No. 3(vi)(a) of the said Notification and applicable CGST rate is thus 6 % CGST +6% SGST. 7. The applicant has given additional submission vide letter dated 21.06.2021 wherein they have submitted following as under: (1) Regarding constitution of the AUDA: (i) In exercise of the powers conferred by Section 3 of the Gujarat State Legislature (Delegation of Powers) Act, 1976, the Honourable President of India enacted The Gujarat Town Planning and Urban Development Act, 1976 (hereinafter referred to as the said Act). The said Act was notified on 21.06.1976 vide the Gujarat Government Gazette. The objective of the said Act is to consolidate and amend the law relating to the making and execution of development plans an....
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....be nominated by that Government, ex-officio; (iv) the Presidents of the district panchayats functioning in the urban development area, or, as the case may be, part thereof, ex-officio; (v) the Chief Town planner or his representative, ex-officio;, (vi) the Chief Engineer or Engineers (Public Health) of the local authority or authorities functioning in the urban development area or his or their nominee or nominees, ex-officio; [(vi-a) the Municipal Commissioner of the Municipal Corporation, if any, functioning in the urban development area, ex-officio;] (vii) a member secretary to be appointed by the State Government who shall also be designated as the Chief Executive Authority of the Urban Development Authority. (2) Powers and functions of urban development authority. - (1) As per the provisions of Section 23(1) of the said Act, the functions of an urban development authority shall be as under : (i) to undertake the preparation of development plans under the provisions of this Act, for the urban development area; (ii) to undertake the preparation [and execution] of town planning schemes [or local Area ....
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....ards the expenses incurred by the urban development authority in the discharge of its functions. (3) Regarding the status of the Ahmedabad Urban Development Authority under the Central Goods and Services Tax Act, 2017 and the Gujarat State Goods and Services Tax Act, 2017 : (1) As per para 4(ix) of the Notification Number : 11/2017 - Central Tax (Rate) dated : 28.06.2017, the phrase " Governmental Authority" has been defined as under : (ix) "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 90per 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 the Constitution. (2) The Ahmedabad Urban Development Authority is constituted under an Act of the State Legislature i.e. under the The Gujarat Town Planning and Urban Development Act, 1976. Also, the full control of the said Ahmedabad Urban Development Authority is with the State of Gujarat as is evident from the c....
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...., if any. (2) A town planning scheme may be made in accordance with the provisions of this Act in respect of any land which is- (i) In the course of development; 1 [(ii) likely to be used for residential or commercial or industrial or for building purposes; or] (iii) Already built upon. Explanation:- For the purpose of this sub-section the expression "land likely to be used for building purposes" shall include any land likely to be used as, or for the purpose of providing, open spaces, roads, streets, parks, pleasure or recreation grounds, parking spaces or for the purpose of executing any work upon or under the land incidental to a town planning scheme, whether in the nature of a building work or not. (3) A town planning scheme may make provision for any of the following matters, namely:- (a) The laying out or relaying out of land, either vacant or already built upon; (b) The filling up or reclamation of low-lying, swampy or unhealthy areas, or levelling up of land; (c) Lay-out of new streets or roads, construction, diversion, extension, alteration, improvement and closing up of streets and roads and ....
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....e of objectionable uses of lands in any area in specified periods, parkings space and loading and unloading space for any building and the sizes or locations of projections and advertisement signs; (l) the suspension, so far as may be necessary, for the proper carrying out of the scheme, of any rule, bye-law, regulation, notification or order made or issued under any Act of the State Legislature or any of the Acts which the State Legislature is competent to amend: Provided that any suspension under this clause shall cease to operate in the event of the State Government refusing to sanction the preliminary scheme, or in the event of the withdrawal of the scheme under section 66, or on the coming into force of the final scheme; (m) such other matters not inconsistent with the objects of this Act as may be prescribed. Section 91: Fund Of The Appropriate Authority :- (1) An appropriate authority shall have and maintain its own fund to which shall be credited- (a) All moneys received by the authority by way of grants, loans,1[advances, fees, development charges or otherwise;] (b) All moneys derived from its undertakings, pro....
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.... thereon, shall be forwarded annually to the State Government. 8. Thus, the development of the AUDA Sports Complex, at Manipur, Ahmedabad is for providing general public utility services which is the object behind formation of AUDA by the Government of Gujarat. Such development of the said AUDA Sports Complex is thus not a venture in the nature of trade, commerce or business or industry. There is no element of any profit involved in the said development. Advancement of general public utility is the sole object behind formation of AUDA, which is clearly forthcoming from the above referred provisions of the said Act. 9. In this regard, the Honourable Delhi Court in the case of Bureau of Indian Standards Vs. DGIT (exemptions) reported in [2013] 212 Taxman 210 , has made very poignant observation , which is reproduced as under : In these circumstances, "rendering any service in relation to trade, commerce or business" cannot, in the opinion of the Court, receive such a wide construction as to enfold regulatory and sovereign authorities, set up under statutory enactments, and tasked to act as agencies of the State in public duties which cannot be discharged by private bod....
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....Central Government, the State Government, the Union Territory, a local authority, a Government Authority. (iv) The civil structure or original works must be predominantly meant for use other than for commerce, industry, or any other business or profession. 16. We find that the subject contract is for the construction of immovable property wherein transfer of property in goods is involved in the execution of subject contract. We hold that subject supply is a composite supply of works contract service. 17.1 The service recipient is AUDA. Its fund have not been notified by State Government Acts or Treasury Rules as local/municipal funds. We find no merit to term AUDA as 'local authority' as per section 2(69) (c) CGST Act. We find if apt to refer to CBIC's Sectoral FAQ of Government Services which is reproduced herein as follows: Question 5: Are all local bodies constituted by a State or Central Law regarded as local authorities for the purposes of the GST Acts? Answer: No. The definition of 'local authority' is very specific and means only those bodies which are mentioned as 'local authorities' in clause (69) of section 2 of the CGST Act, 2017. It woul....
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....b-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; [(h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities'. 19.2 We note that the definition of business is an inclusive definition and the activities specified are only indicative and not exhaustive. 19.3....
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....nal Photo Identity Proof in case of (Personal/Group or Professional Booking) and Original Identity Card of Educational Institution Representative. • Payment gateway charges if applicable has to be barred by user. • AUDA can change the timings as per the weather/seasonal conditions or sudden unavoidable circumstances and, Charges as well." 20. We have given much thought to the issue before us. We find the commercial uses of an already existing Sports complex at Bopal location as detailed in previous pages. We note the chargeable bookings and their rates, the non refundable nature of bookings too. With the plain reading of the inclusive definition of the word 'business' in CGST Act as reproduced at paragraph 19.1 with the nature of commercial activities in which AUDA is involved as evidenced with the above illustration, with nothing to dissuade us from what is a glaring and clear illustration of activity of AUDA w.r.t. a sports facility already existing, We are of the strong opinion that subject proposed Sports Complex is not predominantly meant for use other than for commerce, industry, or any other business or profession. There is nothing contrary that ....