TaxTMI 
TaxTMI 
2021 (9) TMI 481
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....ckam Road, Aminjakarai, Chennai-600029 (hereinafter referred as 'Applicant' or 'PHFMS') is registered under the GST Act 2017 vide GSTIN No. 33AAIFP7751M1ZR. The applicant is engaged in providing Mechanized and Manual Housekeeping services/Cleaning services including Pest Control services; Security services, non-medical Man Power supply to support Medical and paramedical services in hospital projects; Bio Waste Management for all Hospitals under DME as bundled services to Directorate of Medical Education (DME) that includes Government Medical College Hospitals, Government Medical Colleges and Government Nursing Colleges. The applicant has sought Advance Ruling on the following questions:- 1. Whether services provided by Padmavathi Hospitality & Facilities Management Services (PHFMS) to DME are classifiable as a function entrusted to a Panchayat or a Municipality under the constitution? If not then can we conclude that no exemption is available to PHFMS? 2. Whether services provided by PHFMS to DME is exempted under SI.No.3 of Notification 12/2017 Central Tax dated 28.06.2017 read along with amendment dated 25.01.2018? 3. Whether Services pr....
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....ith AAR in this regard and a fresh application is made. 2.2 On the interpretation of law, they have stated that GST@18% will be applicable to Mechanised and Manual housekeeping services and cleaning services, Pest control and security services provided as bundled services to Government hospitals and colleges due to below reasons.- • As per Exemption Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017 under Chapter 99 read along with amendment issued on 25.01.2018 BOTH refers to services provided "to the Central Government, State Government or Union territory or local Authority or Governmental Authority by way of any activity in relation to any function entrusted to Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. • Their services i.e Mechanised and manual Housekeeping/cleaning services including Pest control services Security services are not falling under the above categories of Article 243G and 243W of Indian Constitution and so GST exemption is not available in this instance and also as per the advance ruling Given in case No. 34/2018 vide ord....
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....relation to any function entrusted to Panchayat is clearly listed out in the eleventh schedule the functions entrusted to a Panchayat are as under:- (i) Agriculture, including agricultural extension. (ii) Land improvement, implementation of land reforms, land consolidation and soil conservation. (iii) Minor irrigation, water management and watershed development. (iv) Animal husbandry, dairying and poultry. (v) Fisheries. (vi) Social forestry and farm forestry. (vii) Minor forest produce. (viii) Small scale industries, including food processing industries. (ix) Khadi, village and cottage industries. (x) Rural housing. (xi) Drinking water. (xii) Fuel and fodder. (xiii) Roads, culverts, bridges, ferries, waterways and other means of communication. (xiv) Rural electrification, including distribution of electricity. (xv) Non-conventional energy sources. (xvi) Poverty alleviation programme. (xvii) Education, including primary and secondary schools. (xviii) Technical training and vocational education. (xix) Adult and non....
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....ing street lighting, parking lots, bus stops and public conveniences. (r) Regulation of slaughter houses and tanneries From out of the above list the functions relevant to the applicant are the services as specified under clause (f) viz "Public Health Sanitation, Conservancy and Solid Waste Management ...................... " Hence it is very clear that the functions entrusted to Municipalities under article 243W which are relevant to the applicant is only Public Health Sanitation, Conservancy and Solid Waste Management ................... ". However they are providing Manual and Mechanised housekeeping services and Man power and security services to Hospitals covered under DME tender falling under municipalities and are not falling under clause f of article 243W of the constitution. • The dictionary meaning of the term public health sanitation is "Sanitation refers to public health conditions related to clean drinking water and adequate treatment and disposal of human excreta and sewage. ... Sanitation systems aim to protect human health by providing a clean environment that will stop the transmission of disease, especially through the fecal-oral rou....
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.... services provided to government hospitals and medical colleges are not covered under either of the eleventh schedule or twelfth schedule of the Constitution. 'Cleaning and Sweeping services' can be considered as related to the function listed under Sl.No23 of the Eleventh Schedule, namely "Health and Sanitation, including hospitals, primary health centres and dispensaries", provided 'Sanitation service', as classified under SAC 99945, includes sweeping and cleaning of places like hospitals etc • As the scope of the functions listed under the Eleventh Schedule is considered with respect to applicability of the Exemption Notification under the GST, the scope of any service should be determined in terms of the Scheme of classification of the Services referred to in Explanation 3(i) of the Exemption Notification. • 'Sanitation and similar services', classified under SAC 99945, includes sweeping and cleaning, but only with reference to cleaning of a road or street. Cleaning of hospital premises is not, therefore classified under 'Sanitation or similar service' 3.1 Due to the prevailing PANDEMIC situation and in order not to d....
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....017 along with the roceedings of the Director of Medical Education, Chennai-10 in Ref. No. 34457/OSC/2017 dated 17.05.2017 4. Copy of Tax Invoice No. AP2021P0620010 dated 04/03/2021 raised on The Principal, Govt. Medical College, Vijayawada, Andhra Pradesh along with the copy of tender and the service agreement copy for pest control services supplied to hospitals in the state of Andhra Pradesh. 5. Copy of Tax Invoice No. AP2021P0550011 dated 04/03/2021 raised on The Superintendent, Govt. General Hospital, Kurnool, Andhra Pradesh along with the Agreement copy. 6. Tamil Nadu Medical Services Corporation Bid Reference 97/DMS-Outsourcing/DME/TNMSC/ENGG/2021 dt 05.07.2021 in which the applicant propose to participate 3.3 They furnished a Write up on the activities covered under the proposed tender- with its similarities/variance with the activity undertaken in hospitals in Andhra Pradesh. 3.4 On perusal of the documents, it is noticed that at present they are not providing any service to DME and the proposed Tender is called for by Tamil Nadu Medical Services Corporation Limited(TMSCL) for Outsourcing of Housekeeping, Security Services and Assistance in ....
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....tion (DME) that includes Government Medical College Hospitals, Government Medical Colleges and Government Nursing Colleges. They were providing above said services to 95 hospitals since 2013 and their contract expired on 2019. At present they are not providing any services to Directorate of Medical Education (DME). The applicant has sought Advance Ruling on the following questions:- 1. Whether services provided by Padmavathi Hospitality & Facilities Management Services (PHFMS) to DME/DMS are classifiable as a function entrusted to a Panchayat or a Municipality under the constitution? If not then can we conclude that no exemption is available to PHFMS? 2. Whether services provided by PHFMS to DME/DMS is exempted under SI.No.3 of Notification 12/2017 Central Tax dated 28.06.2017 read along with amendment dated 25.01.2018? 3. Whether Services provided by PHFMS to DME/DMS including institutions of Government Hospitals and colleges are liable for GST or not? If yes, what is the rate of GST applicable to these services 4. Whether services rendered by PHFMS to DME/DMS can be classified as pure services or Composite Supplies? The questions raised as a....
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....licability of entry No.3 of Notification No. 12/2017-C.T.(rate) dated 28.06.2017 as amended, in as much as the activities for which the tender is floated are 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 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. In this case, the applicant has stated that they propose to participate in this tender and as a proposed activity they seek ruling, which is admissible and within the ambit of this authority as per Section 95(a)/97(2) of GST Act and therefore the question raised in respect of the activities tendered and to be provided to DMS, if awarded to the applicant, is taken up for consideration on merits. 7.1 On perusal of the documents produced by the applicant, it is seen that Tamil Nadu Medical Service Corporation Ltd., (TNMSC) has called for a tender vide Bid Reference 697/Outsourcing/DMS/TNMSC/ENGG....
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....¢ 1.3 Bid Format-B for each hospital covered under each zone indicating the minimum requirement of equipment for 3 years, consumables per month and durables for 3 months; Format- C Summary of cost for A) Manpower cost for Hospital level and B) Resource cost equipment/consumables for the Hospitals covered in Zone cost; Format D -Indicates the prices/cost for the Zone level Management/Monitoring Services; Format E-Indicates the prices/cost for the Zone level Resource Requirement administration which includes the cost for Computer System, on-line, identity card, visitors card, biometric systems, Profit/margin, supervision/monitoring, contingencies and other administrative cost; Format-F provides for the consolidation of all costs at Format C,D, E; It is also specified that the contractor is advised to provide manufacturer specifications for all the equipment and consumables to be provided for performing the Overall Management/Operational Services at the Hospitals under the control of DM&RHS / DM &RHS(ESI) and the cost of equipment should be amortized for 3 years and annual costs to be specified in summary sheets • 2.1.2 The Tender inviting authority and Tender Accepting....
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....rvices' which by the clauses of the tender includes goods and services. From the part of the tender pages 1 to 55, furnished before us, we find that the person bidding for the tender has to provide the man-hour cost and the cost of resources such as equipment(amortized), consumables, etc to be used by the bidder for effective provision of the comprehensive management solution related to cleaning, housekeeping, security and maintenance of the Hospitals under the DM&RHS. 8.1 The applicant has sought ruling on the applicability of entry No. 3 of the Notification No. 12/2017-C.T.(Rate) to the scope of work to be undertaken in the 86 Government Hospitals under the control of Directorate of Medical & Rural Health Services and 7 Hospitals under the control of Directorate of Medical & Rural Health Services(ESI) in the proposed tender Document issued by TNMSC. Entry No.3 of Notification 12/2017 CT(R) dated 28.06.2017 is examined as under: SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 3 Chapter 99 Pure services (excluding works contract service or other composite supplies involving supply of ....
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....he tender bid furnished before us envisages receipt of service of housekeeping, cleaning including Bio medical disposal & pest Control, Security services, maintenance of the Hospitals by assisting in electrical, plumbing, etc. Thus, in the case at hand, the scope of work is the supply of Comprehensive facility management service for the upkeep/running of the hospitals, i.e., the successful bidder uses the materials required for provision of such services and the various services are supplied to the recipient by such successful bidder. Hence, the recipient is supplied with 'Pure services' of Housekeeping/cleaning including Pest Control services; Security services; manpower for various maintenance services. The first limb of the said notification specifies 'Pure Services (excluding works contract service or other composite supplies involving supply of any goods)', in the instant case, the services provided are 'Pure Services' and the said entry covers all the 'Pure services', therefore, this limb is fulfilled. 8.3 The webpage https://tnhealth.tn.gov.in/tngovin/orgnstructure.nhp. gives the Organisational structure of Ministry of Health and Family Wel....
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....on has decade by decade paved way for organisation of various separate Departments for better administration and from 1.1.99 onwards, this Department namely the Department of Medical and Rural Health Services is being entrusted with the responsibility of rendering Medical Care services to the public through the Non-Teaching Medical Institutions. " In view of the above said position, it is clearly evident that Directorate of Medical & Rural Health Services, and Directorate Medical & Rural Health Services (ESI) are Directorates under Health & Family welfare Department, Government of Tamil Nadu. In the case at hand, the tender issuing and accepting authority, alone is the TNMSC. The role of the Tamil Nadu Medical Service Corporation Ltd., (TNMSC), a Government of Tamil Nadu Undertaking is to be understood in the backdrop of the tender offer document of Tamil Nadu Medical Services Corporation Bid Reference 697/Outsourcing/DMS/TNMSC/ENGG/2021 dt 05.07.2021. The Tamil Nadu Medical Service Corporation Ltd., (TNMSC) was set up with the primary objective of ensuring ready availability of all essential drugs and medicines in the Government Medical Institutions throughout the State by adop....
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....ty management services' and in view of the above discussion, it is clear that third limb of said entry of the exemption notification is also satisfied. 8.5 To summarize, the scope of work in the tender document as furnished to us is 'Comprehensive facility management services' which are 'Pure Services' of Housekeeping, cleaning including pest control services, Security services, assistance in the form of Electrician, Plumber, etc for effective maintenance of the hospital facility; the supply is proposed for the hospitals under DM&RHS, which is a Directorate under Ministry of Health & Family Welfare, State of Tamil Nadu, i.e., State Government; the activities being in relation to the up-keeping/running of the Hospital facility, is in relation to the activities entrusted to a Panchayat or a Municipality under Article 243G/W of the Constitution and therefore, the exemption at Entry No. 3 of Notification no. 12/2017-C.T.(Rate) dated 28.06.2017 as amended is applicable in respect of the scope of work tendered by TNMSC for the supply to be made to hospitals under DMS. 9. The applicant has stated that they are rendering similar services in the State of Andhra Pra....