TaxTMI 
TaxTMI 
2022 (12) TMI 1324
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....December, 2021. b. If the supplies as per Question a are covered by Notification No. 15/2021- Central Tax (Rate), dated 18th November, 2021, r/w. Notification No. 22/2021- Central Tax (Rate), dated 31st December,2021, then what is the applicable rate of Tax under the Goods and Services Tax Act. 2017 on such Supplies made w.e.f. 01-01-2022; and c. In case if the supplies as per Question a are not covered by the Notification supra then what is the applicable rate of tax on such supplies under the Good's and Services Tax Act, made w.e.f. 01-01-2022. 4. As per the declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending in any proceedings nor decided in any proceedings in the applicant's case under any of the provisions of the CGST Act, 2017/UPGST Act, 2017. 5. The applicant has submitted that- (1) The Applicant is a Company registered under the Indian Companies Act. (2) It undertakes Contracts for Construction of Head works, Sumps, Pump Rooms, laying, jointing of pipe line and commissioning and maintenance of the entire work for Water Supply Projects I Sewerage Projects/ Facilities. ....
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....uently Notification No. 31/2017 dated 13th October, 2017 was issued to amend Serial No. 3(iii) viz - "Central Government, State Government, Union territory, a local authority, a Governmental Authority or a Government Entity". Further, this Notification also clarified the meaning of the term Government Authority and Government Entity to mean as under - "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 90 per cent or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution. "Government Entity" means an authority or a board or any other body including a society, trust, corporation, (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90 per cent or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government. Union Territory or a local a....
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.... (a) The said transaction is covered by Notification. No. 15/2021 Central Tax (Rate) dated 18th November, 2021 r/w. Notification No. 22/2021- Central Tax (Rate), dated 31st December, 2021; which after amendment now reads as "(iii) Composite supply of works contract as defined in clause (119) of Section 2 of the Central Goods and Services Tax Act, 2017, supplied to Central Government, State Government, Union territory or a local authority". (b) the said transaction is liable to tax under the GST Act @ 12%; and (c) Not Applicable 7.1 The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer his comments/views/verification report on the matter. The Assistant Commissioner, CGST & Central Excise Division Jhansi vide his letter C.No. V(30)41-Tech/Misc/JHS/18/pt 11/781 dated 01.09.2022 submitted that UPJN (Uttar Pradesh Jal Nigam) who will be the recipient of composite supplies qualifies as a "local authority" in terms of sub-section (3) of Section 3 of "The Uttar Pradesh Water Supply and Sewerage Act, 1975". and therefore supplies by the applicant seems to be covered under the Entry 3(iii) of the Notification No. 11/20....
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....ication No.22/2021- Central Tax (Rate), dated 31st December, 2021. b. If the supplies as per Question a are covered by Notification No.15/2021- Central Tax (Rate), dated 18th November. 2021. r/w. Notification No. 22/2021- Central Tax (Rate), dated 31st December, 2021. then what is the applicable rate of Tax under the Goods and Services Tax Act, 2017 on such Supplies made w.ef. 01-01-2022; and c. In case if the supplies as per Question a are not covered by the Notification supra then what is the applicable rate of tax on such supplies under the Goods and Services Tax Act, made w.ef 01-01-2022. 12.1 The applicant vide their email dated 09.09.2022 have sought ruling on following additional question- d. Whether a "Person" can have different Constitution of Business- i. Under the different Acts- Income Tax Act/GST Act ii. Under the same act-GST Act. 12 .2 As per Section 97(2) of the CGST Act 2017, advance ruling can be sought on following issues- 1. Classification of any goods and services or both under the act. 2. Determination of time, value, and supply of goods and services. 3. Applicability of a notificati....
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....ment, or (iii) sewerage treatment or disposal. 6 14. The questions raised by the applicant require examination as to whether the Uttar Pradesh Jal Nigam (hereinafter referred to as the UPJN) is local authority or not. The applicant have arrived at conclusion that UPJN is local authority on the basis of 4th character of PAN of UPJN being 'L' and the registration certificate of UPJN bearing constitution as 'local authority'. 15. Now we proceed to examine the constitution of UPJN. UPJN was created by the Government of Uttar Pradesh by enacting the U.P. Water Supply and Sewerage Act, 1975 (hereinafter referred to as the UPWSS Act). It is a body corporate having perpetual succession and a common seal and capable of suing and being sued in its name. It has power to acquire, hold and dispose of the property. The relevant provisions of the UPWSS Act is as under- (i) The preamble of the UPWSS Act indicates that U.P. Jal Nigam was brought into existence to provide for the establishment of a corporation, authorities and organization for the development and regulation of water supply and sewerage services and for matters connected therewith. ....
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....Government with the control or management of a municipal or local fund qualifies as a "local authority". 18. The definition of the 'local authority' is contained in Section 3(31) of the General Clauses Act, 1897 which is as under- "local authority" shall mean a municipal committee, district board, body of port Commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund; 19. Thus, it is seen that the term 'local authority' has been similarly worded in CGST Act, 2017 as well as General Clauses Act. 1897. The Apex Court in the landmark decision of Union of India Vs. R.C. Jain (1981) 2 SCC 308 while deciding whether the Delhi Development Authority is a 'local authority' or not, explained the scope of the term local authority under the General Clauses Act as follows- Let us, therefore, concentrate and confine our attention and enquiry to the definition of 'Local Authority' in Sec. 3(3) of the General Clauses Act. A proper and careful scrutiny of the language of Sec.3(31) suggests that an authority in order to be a local Authority, must be of like ....
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....l authority' as given under Section 3(31) of the General Clauses Act.- (1) The authorities must have separate legal existence as corporate bodies. It must be legally independent entities. (2) The authority must function in a defined area and ordinarily, wholly or partly, directly or indirectly be elected by the inhabitants of the area. (3) The authority must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. (4) The authority must be entrusted by Statute with such Governmental functions and duties as are usually entrusted to municipal bodies. (5) The authority must have the power to raise funds for the furtherance of their activities and the fulfillment of their projects by levying taxes, rates, charges, or fees. (6) Essentially, control or management of the funds must vest in such authority. 21. The UPJN is not satisfying some of the above conditions for qualifying as "local authority' as discussed below- 21.1 The Apex court in the RC Jain case (supra) has held that that the authority should be elected by the inhabitants of the are....
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.... a statement of programme of its activities to the State Govt, before the commencement of financial year and may at any time during financial year. Further, the accounts of UPJN shall be audited by such auditor as the State Govt, may direct. Moreover, the accounts of the Nigam and a Jal Sansthan, as certified by the Auditor together with the audit report thereon shall be forwarded annually to the State Government and the Nigam respectively, who may issue such directions to the Nigam or the Jal Sansthan, as the case may be, as it may deem fit, and the Nigam or the Jal Sansthan shall comply with such directions. The State Government shall- a) cause the accounts of the Nigam together with the audit report thereon, received by it under section 50(4) to be laid annually before each House of the State Legislature, and b) cause the accounts of the Nigam to be published in such manner as it thinks fit. (7) As per Section 89 of the UPWSS Act. the UPJN shall be guided by such directions on questions of policy as may be given to it by the State Govt. (8) As per Section 90 of the UPWSS Act, the UPJN shall submit to the State Govt, an annual report giving an ....
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..... the law settled by Hon'ble Supreme Court in the cases of Valjibhai Muljibhai Soneji (supra), R.C. Jain (supra). Commissioner of Income Tax. Vs. U.P. Forest Corporation (supra). Agricultural Produce Market Committee, Narela, Delhi (supra), read with Part IX and IXA of the Constitution and Section 3 (31) of General Clauses Act, the U.P. Jal Nigam does not seem to be the 'local authority' under Section 10 (20) of the Income Tax Ad, 1961 even prior to Finance Act, 2002. The word, "local authority" has been defined in the Section 3 (31) of the General Clauses Act, 1897, an old Central Act, which has been interpreted by the Hon'ble Supreme court by catena of judgments (supra). Order dated 22.09,2011 delivered by Hon'ble Justice Satish Chandra Further, Hon'ble Apex Court held that the U.P. Forest Corporation is not an authority, though, under section 3(3) of the U.P. Forest Corporation Act, 1974 it is provided that for all purposes, it shall be the 'local authority'. Hence, on the similar analogy, provisions of Section 3 (3) of U.P. Act no. 1975 is of no use to the assessee. Thus, to hold statutory body as an "authority", it shall be nec....
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....he status of local authority is in respect of dispute of Income Tax,, the same is applicable to instant case as the order of the Hon'ble High Court has been passed after analyzing the definition of 'local authority' contained in General Clauses Act. It has already been discussed that the term 'local authority' has been similarly worded in CGST Act, 2017 as well as General Clauses Act, 1897. 24. Further, the relevant clarification contained in Service Tax Educational Guide published in erstwhile tax regime is reproduced below- "2.4.9 Are all local bodies constituted by a State or Central Law local authorities? No. The definition of 'local authority' is very specific as explained in point no 2.4.8 above and only those bodies which fall in the definition comprise 'local authorities'. It would not include other bodies which are merely described as a local body by virtue of a local law. 25. Thus, we are of the view that the UP.TN is not a 'local authority'. 26. Now we proceed to examine as to whether the UPJN is 'Governmental Authority'. It is relevant to note that the term "Governmental Authority" is not def....
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....June 28, 2017, was restricted to works contract supplied to Central Government, State Government, Union territory and a local authority only with effect from 01.01.2022. As the UPJN does not qualify as a 'local authority' and it qualifies as a governmental authority, tax rate of 18% is applicable on the works contract services provided to UPJN by way of Entry 3(xii) of Notification No. 11/2017- Central Tax (Rate) dated June 28, 2017. The said Entry 3(xii) of the Notification No. 11/2017 reads as follows: Description of Service Rate (percent) "(xii) Construction services other than (i). (ia), (ib), (ic). (id), (ie), (if), (iii), (iv), (v), (va), (vi), (vii), (viii), (ix), (x) and (xi) above." 9 30. Further, the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 was amended vide Notification No. 03/2022-Central Tax (Rate) dated 13 July 2022 and following changes have been made in serial No. 3 of the Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 with effect from 18.07.2022- In the said notification,- (A) in the Table, - (I) against serial number 3, in column (3), - (a) items (iii), (iv), (v), (va), (....