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2023 (5) TMI 285
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....ding the project namely SMIMER Hospital & College Campus & further to prepare architectural and working drawings as required for the construction of the project. 4. It is the applicant's averment that SMC, the recipient of the service, has contended that SMIMER Hospital and College is covered under the 12th Schedule of Article 243W of the Constitution of India & is thus exempt, in terms of entry no. 3 of notification No. 12/2017-Central (Rate), it being a pure service. Contra- the applicant however states that according to them, their services would be covered under entry no. 21 of notification No. 11/2017-Central Tax (Rate) & is liable to GST @ 18%. 5. The applicant's next contention is that if the activity is exempt as contended by the SMC, then the same exemption should also be available to the sub-contractors of the said pure service. To substantiate this contention the appellant has also relied upon the below mentioned rulings viz • Advance Ruling No. Raj/AAR/19-20/28 dtd 18.12.19 in the case of Sevak Ram Sahu. • Advance Ruling No. MAH/AAAR/SS-RJ/15/18-19 dtd 3.1.2019 in the case of M/s. Shree Construction. • Advance Ruling No. UP/A....
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....granted on 28.2.2023 wherein Shri Vedraj Agarwal and Shri Ajit B Jariwala appeared on behalf of the applicant and reiterated the facts as stated in the application. During the course of personal hearing the applicant sought time to file additional submission. In the additional submission dated 1.3.2023, the applicant further stated viz o that in terms of paragraph f of the work order, the GST is payable as per prevailing government rate; o that the work allotted is a comprehensive work looking to the terminology and words used in the said clauses (A) All inclusive consultancy fee for Architectural & Structural designing + Area development & landscaping; o that it is very difficult to conclude that it pertains purely to services only; that the work order does not appear to be a supply of pure service but also includes supply of goods along with supply of services in the form of providing of various physical models of the medical college block, hospital block and residential campus. o that various samples of the hardware materials, sanitary items, electrical items, various knobs, handles and all sample of ELV system, all are required to supply in t....
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....sfied that it is necessary in the public interest so to do, on the recommendations of the Council. hereby exempts the intra-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely: - Table Sl. No. Chapter, Section or Heading, 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 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....
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.... be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule. TWELFTH SCHEDULE (Article 243W) 1. Urban planning including town planning. 2. Regulation of land-use and construction of buildings. 3. Planning for economic and social development. 4. Roads and bridges. 5. Water supply for domestic, industrial and commercial purposes. 6. Public health, sanitation conservancy and solid waste management. 7. Fire services. 8. Urban. forestry, protection of the environment and promotion of ecological aspects. 9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. 10. Slum improvement and upgradation. 11. Urban poverty alleviation. 12. Provision of urban amenities and facilities such as parks, gardens, playgrounds. 13. Promotion of cultural, educational and aesthetic aspects. 14. Burials and burial grounds; cremations, cremation grounds; and electric crematoriums. 15. Cattle pounds; prevention of cruelty to a....
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....ission of SMC should be taken for such appointments. (6) It should he strictly noted that, SMC will not make any kind of payments to the structural engineer or other experts appointed by the Consultant. On going through the work order no. 84 dated 1.2.2022, we find that the (i) scope of work (ii) professional charges and (iii) other conditions, states as follows, viz B. Scope of Work: (7) Development of Master Plan for SMIMER Hospital & College Campus as per the prevailing norms of National Medical Counsels (NMC) (8) To prepare the sketch plans for various buildings as per approval. (9) To prepare micro to macro level detailed Architectural Drawings (including Architectural, Structural, Electrical, HVAC, Interior, Fire Fighting, Plumbing and others) (10) To Prepare detailed working drawings jiff actual execution on site. (11) To prepare detailed item wise estimate and tender documents for respective projects. (12) Time to time site visit (including visit by various Experts / Consultants) during construction works as and when required. C. Professional Charges: S.No. Description of Works Consultanc....
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....o. 3 of notification No. 12/2017, ibid, clearly shows that three conditions need to be satisfied for a service to be covered under this entry of the notification viz [a] It must be a pure service not involving any supply of goods; [b] It must be provided to the Central Government, State Government or Union Territory or Local authority. [c] It must be an activity in relation to any function entrusted to a [i] Panchayat under Article 243G of the Constitution of India; or [ii] Municipality under Article 243 W of the Constitution of India. 15. Further, in the FAQs issued by the Government on sectoral series on Government Services, it was clarified as follows: Question 25: What is the scope of 'pure services' mentioned in the exemption notification No. 12/2017-Central Tax (Rate). dated 28.06.2017? Answer: In the context of the language used in the notification. supply of services without involving any supply of goods would he treated as supply of 'pure services'. For example, supply of man power for cleanliness of roads, public places, architect services, consulting engineer services, advisory services, and like services ....
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....emes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule. The SMC has awarded the work order to the applicant and the work so awarded i.e. providing consultancy services as campus architect for various works at SMIMER Hospital & College Campus for SMC clearly falls within the ambit of 12th schedule, thus satisfying both the conditions [b] and [c]. 18. In view of the foregoing, we find that the pure services [excluding works contract service or other composite supplies involving supply of any goods] provided to the local authority [i.e. in this case to the SMC] by way of any activity in relation to a function entrusted to a Municipality under article 243 W of the Constitution of India is exempt from GST. Having said so we hold that supply by the applicant to SMC being a pure service meets the criterion set out vide Sr. No. 3 of notification No. 12/2017-CT(Rate), dated 28.6.2017, and hence, the supply is exempt from GST. 19. The applicant has relied upon the Advance Ruling No. GUJ/GAAR/R/94/2020 dated 17.9.2020 in the case of M/s. INI Design Studio P. Ltd., to substantiate his plea that their supply is also leviable to GST. In t....
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.... we find that the applicant before us has no locus standi in seeking a ruling in the facts of the present case. In view of the foregoing, we refuse to answer this portion of the second question. 22. The second part of the second question for ruling is that if the applicant provides sub contract of pure services to another contractor of the SMC whether he as a sub-contractor can avail the exemption provided the exemption is available to the direct contractor of SMC? There are diverse rulings in this regard. We find that the main contractor if exempt would not lead automatically to a sub-contractor providing service to the main contractor being exempt as has been held by the AAR in the case of M V Infra Services P Ltd KAR ADRG 04/2020 dated 17.2.2020]. 23. The question of the interpretation/applicability of exemption is no longer res-integra having been decided by the Constitution Bench of the Hon'ble Supreme Court of India in the case of Dilip Kumar & Company [2018 (361) E.L.T. 577 (SC)]. The Hon'ble Supreme Court in the said case held as follows [relevant extracts] 52. To sum up, we answer the reference holding as under (1) Exemption notification should he i....
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....he description of the services, qua the said Si. No. states as follows viz Services provided by way of pure labour contracts of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the beneficiary-led individual house construction or enhancement under the Housing jiff All (Urban) Mission or Pradhan Mantri Awas Yojana The aforementioned SI. No. nowhere states that the service has to be rendered to the Central Government, State Government, local authority, etc.. The description of the services being different, the facts not being similar to the present dispute, the reliance on the said advance ruling by the applicant to substantiate the plea that a sub-contractor would be eligible for exemption is not legally tenable. * Advance Ruling No. MAH/AAAR/SS-RJ/15/18-19 dtd 3.1.2019 in the case of M/s. Shree Construction. On going through the advance ruling it is observed as follows: • M/s. Shree Construction was providing composite supply of works contract as defined under clause 2(119) of the CGST Act, 2017 as a sub-c....