AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 1596
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....also referred to as the "appellant") against the order of Authority of Advance Ruling No. 10/2019/AAR /R-28/23 dated 18.07.2019. 1. BRIEF FACTS OF THE CASE 1. Appellant having their registered office at Global Skill Park ITI Building, Raisen Road, Govindpura, Bhopal, Madhya Pradesh is a part of State Government and has not taken registration under GST law. 2. The project for the Establishment of Center for Occupational Skills Acquisition within the Global Skills Park (hereinafter referred as GSP) in Bhopal, Madhya Pradesh was given to Directorate of Skill Development, Department of Technical Education, Skill Development & Employment (DoSD), Government of Madhya Pradesh. 3. The said Project is to assist the Government of Madhya Pradesh (GOMP) in transforming its technical and vocational education and training (TVET) system to create a skilled workforce that meets the evolving development needs of the State. 4. The project will establish a new advanced TVET institute of international standards to introduce a high quality, technology-oriented skills training for the State's priority sectors. 5. ITE Education Services Pte. Ltd, a Singapore based Consultancy Company (ITE....
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....RAISED BEFORE AUTHORITY FOR ADVANCE RULING (AAR) Relevant question decided against appellant before AAR is as under: - The Appellant desired to know, whether the services received by it from a provider of service located in a non-taxable territory would attract the provision of sec 5(3) read along with notification No. 10/2017 IGST(Rate) dated 28.06.2017. In other words, whether Applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above? 3. RULLING PRONOUNCED BY AAR 1. The Applicant shall be liable to pay IGST on import of Service under Reverse Charge Mechanism in terms of Notification No.10/2017-IT(R). 2. This ruling is valid subject to provisions under section 103 (2) until and unless declared void under section 104(1) of the GST Act. 4. QUESTION RAISED BEFORE THE APPELLATE AUTHOURITY FOR ADVANCE RULING (AAAR) The Appellant desired to know, whether the services received by it from a provider of service located in a nan-taxable territory would attract the provision of sec 5(3) read along with notification No. 10/2017 IGST(Rate) dated 28.06.2017. In other words, whether Appellant is liable to pay tax under reverse charge mechanism on ....
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....ngapore was set up in January 2003 with the objective of sharing ITE's expertise in Technical and Vocational Education & Training (TVET). !TEES having its registered office at ITE Headquarters, Blk A, A2-01, 2 Ang Mo Kio Drive, Singapore 567720. 6. Cabinet approval of GOMP was given vide order S No F-7/2018/42(2) Bhopal dated 28.07.2018 to engage ITEES as a single sourced consulting firm to support the implementation and operation of GSP. ADB vide its letter dated 16th April 2018 supported the decision of single sourcing ITEES. 7. Contract between DoSD and ITEES was signed on 28.09.2018. The main scope of work is to advise and guide in the development of Global Skills Park (GSP), in campus design and infrastructure development, equipment design, laboratory and classroom design; curriculum adaptation, academic structuring, training of trainers; leadership development; and examination. 8. As per special conditions of the contract (SCC) 38.1 the total price of the contract is US$3,812,740 (inclusive of Consultant country taxes) i.e. Singapore taxes. 9. As per the loan and project agreement signed between ADB and GOI and GOMP respectively, there is a provision of direct payment....
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....than commerce, industry or any other business or profession; (b).... (b).... (c).... Nil Nil 14. The applicant filed an application u/s 97 of the Central Goods & Service Tax Act, 2017 and MP Goods & Services Tax Act, 2017 before the Authority for Advance Ruling to know whether the services received by it from a provider of service located in a non-taxable territory would attract the provision of sec 5 (3) read along with Notification No 10/2017 IT(R) and Notification No.9/2017 IT(R). In other words, whether applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above? 15. The Authority for Advance Ruling held that Applicant shall be liable to pay IGST on import of services under Reverse Charge Mechanism considering the fact that the exemption given under entry no. 10 of Notification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 does not apply on services received by the applicant since the import of service is for the purpose of business or commerce. 6. GROUNDS OF APPEAL Ground No. 1: The activity performed by applicant is not business, and therefore the applicant is not liable for GST on reverse charge mechanism: 1. The ruling giv....
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....whether any particular activity is business or not. In the present case the activity performed by applicant is solely for the purpose of social welfare of the society and it is not engaged in any Business or profession as defined the Section 2(17) of the CGST Act. 3. Extract of the functions entrusted to a Panchayat under the Eleventh Schedule to Article 243G of the Constitution 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) Nonconventional energy sources. (xvi) Poverty alleviation programmed. (xvii....
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....able for paying the tax in relation to the supply of such goods or services or both. So, in order to arrive at the GST liability of the applicant, first the Ld. Authority should have verified the tax liability on services provided by ITEES to the applicant. The Ld. Authority has erred in not considering the exemption given under entry no. 3 of Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017. 2. Extract from Notification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 SI. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) 3 Chapter 99 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 1[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 If we analyze the above entry in light with the service provided by ....
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..... Partnership with Institute of Technical Education Singapore for course curriculum and teacher training. e. ITE Education Services Pte. Ltd, (ITEES), a Singapore based Consultancy Company as per agreement with Government of Madhya Pradesh is to provide Consulting Services to the Directorate of Skill Development for the said Project. f. Contract between DoSD and ITEES contains the main scope of work as to advise and guide in the development of Global Skills Park (GSP), in campus design and infrastructure development, equipment design, laboratory and classroom design; curriculum adaptation, academic structuring, training of trainers; leadership development; and examination. g. The total consideration has been decided to be USD $38,12,740/- which is to be paid in 11 installments. 2. Appellant has put forth following question before AAR whether the services received by it from a provider of service located in a non-taxable territory would attract the provision of sec 5(3) read along with notification No. 10/2017 IGST(Rate) dated 28.06.2017. In other words, whether Applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above? 3. Authority f....
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.... it is the social responsibility of Government to impart Technical and Vocation training to create skilled workforce. There is no commercial or business motive in the set-up of this Global Skill Park rather the sole objective is to discharge the duties entrusted in the Constitution of India. 9. He has thus argued before us that his activity does not constitute business and has given elaborate arguments in that direction. 10.Alternatively learned Chartered Accountant has put forth his question again by raising his plea that his sole object, after accepting this transaction to be falling under reverse charge, was to learn if he is exempted by virtue of notification 9/2017 IGST (Rate) dated 28.06.2017. He says that he as recipient of service, who is government of MP, wanted to learn in advance about the taxability of transaction. The application referred entry 10 of the notification 9/2017 to persuade the AAR to look deep into notification. Fundamental question was summed up in the last line of his question before AAR as "In other words, whether Applicant is liable to pay tax under reverse charge mechanism on the transaction mentioned above?" 11. At this point instead of analysing ....
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.... been accepted by appellant and held by us as falling under reverse charge as per section 5 (3) of IGST Act, 2017 read with notification 10 IGST (Rate) dated 28.06.2017. These services are found awfully close to entry XVIII of Eleventh Schedule of Constitution of India. While reading the relevant entry in the notification it is found that it also covers "by way of any activity in relation to any function". This phrase enlarges the scope of every entry to a very wide degree. The services being provided by ITEES may not be directly that of entry XVIII of Eleventh Schedule but when we delve deeper and resort to "in relation to" the function entrusted to a Panchayat under article 243G of Constitution of India, it attains the status which fits very properly. The entry requires the services to qualify either 243G or 243W. 243W being relevant for Municipality. Thus, the services provided by ITEES to DoSD are held to find favour with entry 3 of notification 9/2017 IGST (Rte) dated 28.06.2017 and thereby are held to be exempt from GST. 17. Without prejudice to the discussion above as the appellant has been adjudged falling under reverse charge provisions as per section 5 (3) of the IGST Ac....