AI Drafter 
TaxTMI 
TaxTMI 
2022 (9) TMI 364
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....e Contract from State Urban Development Authority (herein after referred as "SUDA") and the Project Management Consultancy services (PMC") under the Contract for PMAY would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or Article 243W respectively, of the Constitution of India? (2) If answer to first question is in affirmative then, whether such services provided by the applicant would qualify as Pure services (excluding works contract service or composite supplies involving supply of any goods) as provided in serial number 3 of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017, as amended (S. No. 3A) by Notification No. 2/2018- Central Tax (Rate) dated 25 January, 2018 issued under Central Goods and Services Tax Act, 2017 (CGST') and corresponding Notifications No. KA.N.I.-2-843/X1- 9 (47)/17-UP. Act-1 - 2017 - Order - (10) - 2017 Lucknow, dated June 30, 2017 issued under Uttar Pradesh Goods and Service Tax Act, 2017 ('UPGST Act'), where the Project cost includes the cost of service rendered along with reimbursement of cost of procurement of goods for rendering such service, and, thus, b....
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.... was allotted against the Bid Quotation No.2 of the applicant dated 09.01.2019 wherein applicant committed to follow the terms and conditions as per tender allotted by SUDA's RFP No. 708/01/29/HFA/2016-17 dated 01-06-2017 in which main contractor participated and qualified. (6) The applicant is providing no other services to the main contractors other than the services mentioned in scope of work mentioned in section-5 of RFP No. 708/01/29/HFA/2016-17 for preparation of DPR and providing Project Management Consultancy (PMC) Service with the main contractors. (7) SUDA has been established as a state level nodal agency, under the department for Urban Employment and Poverty Alleviation by Uttar Pradesh Government to carry out any function entrusted to a municipality under article 243W of the Constitution. This agency is registered under the 'Registration of Societies Act since 20th November 1990. As per the "Memorandum of Association of State Urban Development Agency", it's main objectives shall be- (a) To identify the urban poor in the state. (b) To draw up plans and formulate schemes for the upliftment of the urban poor in the state. ....
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....ecessary data in reference to Slum Free city Plan in the DPR. • The DPR should be complete in all respect with all report drawings, statements and documents necessary for obtaining the grant from the Government of India. B. Scope of Work under Project Management Consultancy (PMC)/Supervision Services: • PMC will coordinate, execute and monitor the activities leading to the construction of approved DUS (Dwelling units) by Govt. of India. • All the activities till the completion of DUS will be taken care of by PMC. • PMC shall also administer the works by the beneficiaries and ensure that the agreement between the ULBs and beneficiaries whether related to quality or quantities of work are executed in accordance with its provisions. • PMC shall attach Beneficiaries to the project in PMAY-MIS and also upload Annexure 7A & 7C. • PMC shall execute all MIS related work of PMAY (U). • PMC will supervise the construction work to ensure adherence to the drawings, prescribed high standards of quality and timely completion of the project and verify and certify the progress of the work. â....
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....struction phase to provide the field supervision and sufficient staff for check on quality control of the work at site. For this purpose, the Consultant shall have to supervise and exercise adequate and undertake constant day to day technical supervision over the construction including giving layout, its checking, conformity to approved specifications and accepted standards. Submission of weekly or fortnightly progress report as per the directions of Client, including maintaining necessary site records, containing data in support of the same, carrying out field tests on materials, structures etc. and obtaining necessary approvals thereon and maintaining adequate records thereof on the forms prescribed by the Client. 6. The applicant has submitted statement containing the applicant's interpretation of law as under- (1) Issue raised in the application is squarely covered under Section 97(2) (b) of the CGST Act 2017 being a matter related to applicability of a notification issued under the provisions of this Act. (2) As per Constitution of India the text of Article 243G and 243W stands as follows- Functions entrusted to Panchayats as laid down under section 243G ....
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...., moving to decide as to whether such services provided would qualify as "Pure services (excluding works contract service or other composite supplies involving supply of any goods)" as provided in serial number 3 of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017, as amended (S. No. 3A) by Notification No. 2/2018- Central Tax (Rate) dated 25 January, 2018 issued under Central Goods and Services Tax Act, 2017 ('CGST') and corresponding Notifications No. KA.N.I.-2-843/X1-9 (47) / 17-UP. Act-1 -2017 - Order - (10) - 2017 Lucknow, dated June 30, 2017 issued under Uttar Pradesh Goods and Service Tax Act, 2017 ('UPGST Act'), where the Project cost includes the cost of service rendered along with reimbursement of cost of procurement of goods for rendering such service and, thus, be eligible for exemption from levy of CGST and UPGST, respectively. (5) The extracts of Notification No. 12/2017-Central Tax (Rate) dated 28 June, 2017 are as follows: Table S.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 w....
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....on No. 12/2017-Central Tax (Rate) dated 28 June, 2017, as amended. As per the said entry, the main conditions for the exemption are: a. It should be a pure service (excluding works contract service or other composite supplies involving supply of any goods). b. Provided to the Central Government, State Government or Union Territory or Local Authority or a Governmental Authority, c. 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. (9) From perusal of entry no. 03 of the Notification No. 12/2017, it may be observed that service should be pure service, supplied to specific class of recipient and should be in relation to any function entrusted to panchayat or municipality under article 243G or 243W of the constitution. Accordingly it may be established that the service of providing "Preparation of Detailed Project Report (DPR)/ Beneficiary Document Preparation" and providing "Project Management Consultancy Service (PMC)/Supervision Services" under Pradhan Mantri Awas Yojna, by the applicant, in ....
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....thority for Advance Ruling Under GST, Maharashtra, in its Order No. MAH/AAAR/SS-RJ/15/2018-19 dated 03.01.2019 has observed that "...In the instant case though the respondent i.e. M/s Shree Construction is providing works contract service to its main contractor who has entered into works contract agreement with Railways, the composite supply of works contract being carried out by M/s Shree Construction is ultimately going to the use of Railways without being subjected to any change or modification, thus the said work contract, though undertaken by the sub-contractor is undoubtedly pertaining to the Railways and no one else. Thus the condition specified under item (u) of the sr. 3 of the said Notification is completely fulfilled and therefore the service provided by the sub-contractor would attract concessional rate of 12% GST.........there was no need to include such sub-contracts in the item (v) of the Notification as there was no confusion whether the sub-contractor will be eligible to such concessional rate of GST, since the activities described under item (v) of sr. no. 3 of the Notification are services specific. The service provider and the service recipient are immaterial fo....
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....the AAR. (16) Thus this has been established that based on the above Notification No. 12/2017 and 02/2018 issued under Central Tax (Rate), GST is exempt in the hands of applicant in case of DPR/Beneficiary Document Preparation and PMCs/Supervision Services. 7. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer his comments/views/verification report on the matter. The Joint Commissioner, CGST & Central Excise Division-1, Lucknow vide his F.No. 19-CGST/LKO-I/AAR/R-11/2022/1461 dated 08.06.2022 has informed that no proceedings on the questions raised is pending or decided under any of the provisions of the Act. He, however, offered no comments on the questions raised by the applicant. 8. The applicant was granted a personal hearing in the matter. In compliance, Shri Pankaj Shukla, Chartered Accountant & Authorized representative, attended personal hearing on 27.06.2022 through virtual mode on behalf of the applicant. During the personal hearing, he reiterated the submissions already made in the application of advance ruling. DISCUSSION AND FINDING 9. At the outset, we would like to make it clear that the provisions of both the CG....
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....ment of cost of procurement of goods for rendering such service, and, thus, be eligible for exemption from levy of CGST and UPGST, respectively. 12. We observe that as per Si. No. 3 of Notification No. 12/2017-CT (Rate) dated 28.06.2017 "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" are exempt from tax. 13. We observe that SUDA has been established as a state level nodal agency, under the department for Urban Employment and Poverty Alleviation by Uttar Pradesh Government. As per the "Memorandum of Association of State Urban Development Agency", its main objectives shall be- (a) To identify the urban poor in the state. (b) To draw up plans and formulate schemes for the upliftment of the urban poor in the state. (c) To implement schemes for the benefit of the urban....
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.... participation, and affordable Housing in Partnership. As per the details available on website SUDA is the state level nodal agency for PMAY(U) in the state of Uttar Pradesh. 17. Now coming to the functions entrusted to Panchayats/Municipalities, the matters listed in the 11th and 12th schedule to the constitution (details 243G and 243W, respectively), are inter alia: (a) Safe water for drinking, (b) Maintenance of community assets, (c) Family welfare, (d) Markets and Fairs, (e) Poverty Alleviation Programmes, (f) Regulation of land use and construction of land buildings, (g) Urban planning including the town planning, (h) Planning for economic and social development, (i) Urban poverty alleviation, (j) Slum improvement and up-gradation etc. Further as per the preface to the PMAY, Housing for All (Urban) Scheme Guidelines:- "The Mission seeks to address the affordable housing requirement in urban areas through following programme verticals: * Slum rehabilitation of Slum Dwellers with participation of private developers using land as a resource * Promotion of Afford....
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....tities of works are executed in accordance with its provisions. • PMC shall attach Beneficiaries to the project in PMAYMIS and also upload Annexure 7C/7D/7E. • PMC shall execute all MIS related work of PMAY (U). • PMC will supervise the construction work to ensure adherence to the drawings, prescribed high standards of quality and timely completion of the project and verify and certify the progress of the work. • Preparation of Physical and Financial progress and shall submit to respective ULBs and DUDA • Preparation of individual files consist of application, copy of Aadhar card, bank details, land documents, consent letters etc, stage wise photographs for every beneficiaries. • PMC will assist Beneficiaries at various stages such as Plinth Level, Lintel Level, roof level and final finishing works and assist to get timely installments. • PMC will make sure that the project / DUs construction must complete as per the agreement made with the beneficiaries for the successful and timely implementation of the Project. • PMC will implement the Geo tagging of constructions of all the s....
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....desh vide Appeal Order No. 17/AAAR/02/7/2021 dated 02.07.2021 has held as under- In view of above discussion, we hold that the Services rendered by the appellant to the State Urban Development Agency, Uttar Pradesh (SUDA), and for PMAY are in relation to functions entrusted to Municipalities under Article 243W and to Panchayats under Article 243G of the Constitution of India and such services would qualify as Pure Service (excluding works contract service or other composite supplies involving supply of any goods)". 22. However, in the instant case, the applicant is providing services of Project Development Service (i.e. Detailed Project Report Service/Beneficiary Document Preparation) and Project Management Consultancy services (PMCS)'/Supervision Services to SUDA as a sub-contractor. SUDA Lucknow had entered into an agreement dated 31.07.2017 with "M/s Wapcos Limited" (main contractors) for provisioning of above services and Work Order No. 1172/01/29/HFA/2018-19 dated 16.01.2019 was issued by the SUDA to M/s WAPCOS Limited. The applicant was back to back awarded with same work i.e. Preparation of Detailed Project Report (DPR) and providing Project Management Consul....
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....ited v. Commissioner, Trade Tax, Uttar Pradesh, (2009) 2 SCC 90 has observed- "The question of applying the principle of strict or liberal interpretation would arise only when the plain meaning attached thereto is found to be absurd or anomalous. If a plain meaning given to the provision for the purpose of considering as to whether the applicant had fulfilled the eligibility criteria as laid down in the notification or not is found to be clear, purpose and object the notification seeks to achieve must be given effect to." (4) Authority of Advance Ruling Order No. 61 dated 07.07.2020, in the case of M/s. Manpar Icon Technologies, Lucknow, Uttar Pradesh wherein also SUDA Lucknow has entered into an agreement with "M/s Creative Consortium, and M/s Rudrabhishek Enterprises Limited for "Preparation of Detailed Project Report" and providing "Project Management Consultancy Service" under Pradhan Mantri Awas Yojna (PMAY in short). The above two parties made an agreement and awarded, back to back, same work to M/S Manpar Icon Technologies, Lucknow, Uttar Pradesh. In the said case, exactly the same two questions as raised in this application were raised before the Authority for adva....