TaxTMI 
TaxTMI 
2020 (1) TMI 1596
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....T, GOVT. OF MADHYA PRADESH, (hereinafter 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....
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....rmed by the DoSD is the execution of functions entrusted to the government hence it cannot be considered as business activity. 2. QUESTION 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 ....
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....nistry of Education; Government of Singapore after the parliament approved and enacted the ITE Acts. The ITE Education Services Pte. Ltd. (ITEES), a wholly owned subsidiary of ITE, Singapore 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 (in....
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.... Services received from a provider of service located in a non-taxable territory by- (a) the Central Government, State Government, Union territory, o local authority, a governmental authority or an individual in relation to any purpose other 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 applican....
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....gaged as public authorities; It is clear that the definition of business given in Sec 2(17) of the CGST Act is not explicit definition and is so broad that any activity performed by any person can be classified as business. So, now every time the above definition is to be seen in line with the objective of the activity performed to decide 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....
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.... alternatively exempt under Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017: 1. It is clearly evident from ground no. 1 that the import of service is covered under exemption given in entry no. 10 of Notification No. 9/2017- IT (R), even if we consider the order issued by the Ld. Authority for Advance Ruling that the exemption given in entry no. 10 is not applicable on the applicant then also as per the provisions of the GST Act, once the liability of reverse charge is imposed, all the provisions of the Act shall apply to recipient of service as if he is the person liable 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 R....
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....ven to Directorate of Skill Development, Department of Technical Education, Skill Development & Employment, (hereinafter referred as DoSD) Government of Madhya Pradesh. c. The GSP will impart training to 10,000 students every year by trainers of international standard. The park will function on the spirit of 'With Industry-For Industry' and the trained students will be given placement in India and outside India at international level. d. Some other key features of GSP are 1. International Training Method with On-Job trainings. 2. World Class Industrial machinery, tools, and equipment. 3. State of art classrooms, workshops and other facilities for students. 4. 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....
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....overnment, Union territory, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession; (b) - 7. Authority for Advance Ruling (AAR) duly considered the application and discussed entry number 10 of the notification 9/2017 IGST (Rate) dated 28.06.2017 threadbare. AAR concluded that Applicant's (Here Appellant) activity is "business" as defined under GST Act hence the notification does not apply to applicant. AAR on this basis held that Applicant (Here Appellant) shall be liable to pay IGST on import of Service under Reverse Charge Mechanism in terms of Notification No.10/2017-IT(R). 8. Appellant has stated that his activity is in line with the functions entrusted to Government in the Constitution and 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 ....
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....tion" the suave diligent Chartered Accountant says "It is evident from the above that even if we consider the liability of reverse charge on import of service by Government, the rate of tax applicable on the service provided by ITEES, Singapore to the applicant will be nil." 14. He has thus made his point very well. 15. Facts of the case and Statement of the case mention the object of GSP are as a. The GSP will impart training to 10,000 students every year by trainers of international standard. The park will function on the spirit of 'With Industry-For Industry' and the trained students will be given placement in India and outside India at international level. b. International Training Method with On-Job trainings. c. World Class Industrial machinery, tools, and equipment. 16. The services provided by ITEES to DoSD, Govt of MP have already 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 i....