TaxTMI 
TaxTMI 
2023 (5) TMI 285
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.... & 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/AAR/61/2020-21 dtd 7.7.2020 in the case of M/s. Manpur Icon Technologies. *....
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....ation. 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 the form of samples. Discussion and findings 9. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provision....
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....r 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 Nil Notification No. 16/2021-C.T. (Rate). dated 18-11-2021 Exemption from CGST on intro-State supply of specified services (Nil Rated) - Amendment to Notification No. 12/2017-C.T (Rate) In exercise of the powers conferred by sub-sections (3) and (4) of section 9, sub-section (1) of sec....
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....ial 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 animals. 16. Vital statistics including registration of births and deaths. 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. 18. Regulation of slaughter houses and tanneries.] 12. We find that the applicant has been awarded work order nos. 172 dated 22.1.2021& 84 dated 1.2.2022 by SMC. On going through the work order no. 172, we find that the (i) scope of work (ii) professional charges and (iii) other conditions, states as follows, viz B. Scope of Work: (1) Development ....
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....ings (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 Consultancy Fees A All Inclusive consultancy Fee for Architectural & Structural Designing + Area Development & Land Scaping + MEPF (Mechanical, Electrical, EL V, HVAC, Plumbing, Fire) + Interior Designing + Health Care (incl. Hospital Expert Consultancy Fees) 3.66% B. Architectural Designing, Area development & Land Scaping, Health Care 1.00% C. Structural Designing 1.00% D. MEPF (Mechanical, Electrical, EL V, HVAC, Plumbing, Fire) 1.66% E. Interior Designing 2.90% * GST to be reimbursed separately, if applicable F Other Conditions (1) Service Tax/GST will he paid as per the prevailing rates decided by the Govt. It is bound to change with lime. (2) Consultant has to submit all the required drawing....
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....wer: 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 provided by business entities not involving any supply of goods would he treated as supply of pure services. On the other hand, let us take the example of a governmental authority awarding the work of maintenance of street lights in a Municipal area to an agency which involves apart from maintenance, replacement of defunct lights and other spares. In this case, the scope of the service involves maintenance work and supply of goods, which falls under the works contract services. The exemption is provided to services involves only supply of services and not, for works contract services. 16. On going through the two work orders, relevant portions of which have been reproduced supra, we find that the task entrusted as enumerated therein clearly depicts that it is a pure service that the applicant is supposed to render. The applicant's argument in the additional su....
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....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 the said advance ruling order vide paragraph 20.3, the then Advance Ruling authority on going through the contract felt that it did not appear to be a supply of pure service only but also included supply of goods along with supply of services. A bare perusal of the terms of the work order, which is reproduced in paragraph 12 supra, it is amply clear that as far as this contract in respect of which the applicant before us as sought an advance ruling is concerned, is a contract encompassing pure services only without any supply of goods and therefore the reliance on this ruling would not help the applicant. 20. The applicant we find has raised two issues in the second question, we would like to deal with the issues separately. Moving on to the first part of the second question, ie whether the exemption under entry no. 3 of notification No. 12/2017-Central (Rate) dated 28....
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....titution 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 interpreted strictly,- the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled. 24. The question posed by the applicant is a hypothetical question as no such contract seems to have been awarded. Whether a sub-contractor who is engaged in supplying the services to the main contractor would fall within the ambit of Sr. No. 3 of the notification No. 12/2017-CT(Rate) since the services of the main contractor to SMC is exem....
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....e 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-contractor to the main contractor; * Maharashtra Advance Ruling Authority held that the tax rate to be charged by the sub-contractor to the main contractor would be @ 12% GST; * The Jurisdictional Officer feeling aggrieved, challenged the ruling before the Appellate Authority contending that the activities carried out by the sub contractor will not fall under Sr. No. 3(v) of notification No. 11/2017-CT(Rate) dtd 28.6.2017, as amended by notification No. 1/2018- dtd 25.1.2018 as there is no specific inclusion of WCS services provided by sub contractor to main contractor; * The Appellate authority ruled that any supply of works contract pertaining to railways is subject to concessional rate @ 12%; that Shree Construction has entered into works contract with the main contractor who has entered into a works contract with railways; that the composite supply of works contract being carried out by Shree Construction is ultimately going to the use of ....