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2023 (6) TMI 528
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....e Contract from State Urban Development Agency (SUDA) under the Contract for PMAY-U 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) provided to the Central Government, State Government or Union territory or local 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 as provided in serial number 3 of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017, as amended 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, as amended, issued under Uttar Pradesh Goods and service Tax Act, 2017 ('UPGST Act), where the Project cost includes cost of service rendered along with reimbursement ....
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....es/Union Territories. State Level Nodal Agencies (SLNAs), Urban Local Bodies (ULBs)/ implementing Agencies (IAs), Central Nodal Agencies (CNAs) and primary Lending Institutions (PLIs) are main stake holders who play in important role in implementation and success of PMAY(U). The mission covers the entire area consisting of Statutory Towns, Notified Planning Areas, Development Authorities, Special Area Development Authorities, Industrial Development Authorities or any such authority under State legislation which is entrusted with the functions of urban planning & Regulations. The scheme has been divided into four verticals as given below: *Slum rehabiliations of slum dwellers with Participation of private developers using land as resource * Promotion of Affordable housing for weaker section through credit linked subsidy * Affordable housing in Partnership with Public and Private sectors * Beneficiary- Led individual house construction 3. M/s RUDRA ABHISHEK ENTERPRISES LIMITED", among others qualified the terms and conditions of above RFP and Shortlisted as an agency for "Preparation of Detailed Project" and providing Project Mana....
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....rance of the economic interest of the urban poor. 7. As per the Memorandum of Association the Secretary, Urban Employment and Poverty Alleviation Program, will be the Chairman of the SUDA. Further, as per point no. 33 of Article Of Association, the accounts of SUDA shall be subject to an audit by the Comptroller and Auditor General of India and as per point no. 43, "Members to receive no profit upon dissolution of the society if after disposal and settlement of the property of the society and its claims and liabilities, there are any surplus assets, such assets shall not be paid to or distributed amongst the members of the society or any of them but shall be disposed off as directed by the Government of India or State Government. Memorandum of SUDA is attached herewith. 8. As SUDA has been established as a state level nodal agency, under the department of Urban employment And Poverty Alleviation by Uttar Pradesh Government and as per the information contained in Memorandum Of Association (in para 15.vi above), it is clear that SUDA is a part of State Government of UP. In view of facts stated above, it can be established that SUDA falls under Government ca....
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.... * Key stakeholder consultations. * preparation of beneficiaries wise detailed Architectural/Engineering designs Drawing and estimates for all sizes of plots, project structuring under appropriate development and funding mechanism. * Assistance in obtaining appropriate approvals from concerned agencies/departments. * Appropriating all necessary 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....
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....ll accounts of the beneficiaries with the ULBs. * Provide project completion report/closure report which shall contain all technical and financial information of the project. 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. The provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling Application, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the CGST Act'. 3. As per Constitution of India the text of Article 243G and 243 W stands as follows- Functions entrusted to Panchayats as laid down under section 243 G of the Constitution of India ar....
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....ks 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 (relevant portion is reproduced below), 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') as amended (relevant portion attached as per Annexure- 9 (Page Nos. 148-153)), 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. 6. The extracts of Notification No. 12/2017-Central Tax (Rate) dated 28 June, 2017, as amended 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 works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State....
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....e (PMC)" under Pradhan Mantri Awas Yojna (Urban), by the applicant, in terms of contract entered between applicant and SUDA, as per scope of RFP issued by SUDA, are PURE services and are exempt from GST. 10. M/s. KDS Services Private Limited, Lucknow, Uttar Pradesh was providing Project Development Service (i.e. Detailed Project Report Service) and Project Management Consultancy services ('PMCS') under the back to back Contract to SUDA under the Contract for Pradhan Mantri Awas Yojna-Urban "PMAY-U". In this regard copy of AAR Order No. 07/2022 dated 01.07.2022, in the case of M/S KDS Services Private Limited, Lucknow, Uttar Pradesh is attached herewith as per Annexure- 10 (Page Nos. 154-169) where the same two questions as raised here in this application were raised before the Authority for advance ruling "AAR". Answers to both the questions were given in affirmative by the AAR. 11. Thus this has been established that based on the above Notification No. 12/2017, as amended, issued under Central Tax (Rate), GST is exempt in the hands of applicant in case of DPR and PMCs provided to SUDA. 7. The application for advance ruling was forwarded to the Jurisdi....
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....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, as provided in serial number 3 of Notification No. 12/2017- Central Tax (Rate) dated 28 June, 2017, as amended 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, as amended, 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. 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 fun....
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....9-1-10-75(Sa)/97 dated 26.02.2010 and No. 123/2021/174/69-1-21-14(137)/12 dated 11.05.21 both regarding continuity of post in SUDA/DUDA UP. (ii) No. 595/69-1 -10-14(27)/10 dated 24.05.2010 regarding declaration of property by the employees of SUDA/DUDA UP. In view of facts stated above, at least it can be established that SUDA falls under Government category. 16. Further, as per website of Pradhan Mantri Awas Yojana-blousing for All (Urban), Ministry of Housing and Urban Affairs, the PMAY is a Scheme to provide central assistance to Urban Local Bodies (ULBs) and other implementing agencies through States/UTs for Rehabilitation of existing slum dwellers using their land as a resource through private, 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....
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....plete in all respects with all reports drawings, statements and document necessary for obtaining the grant from the Government of India. * The DPR shall be computer typed and printed and drawing should be in Auto Cad. c. Scope of work under Project Management Consultancy (PMC):- * PMC will coordinate, execute and monitor the activities leading to the construction of approved DUs 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 works are executed in accordance with its provisions. * PMC shall attach Beneficiaries to the project in PMAY MIS 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 respecti....
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....rvice (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 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'). 21. We find that in an identical matter, the Appellate Authority of Advance Ruling, Uttar Pradesh vide Appeal Order No. 17/A AAR/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 243 W 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 Ser....
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....tract 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 subcontractor 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 for the determination of beneficiary of this concessional rate of GST..." (3) The Hon'ble Supreme Court Order in case of G.P. Ceramics Private Limited v. Commissioner, Trade Tax, Uttar Pradesh, (2009) 2 SCC 90 (4) Authority of Advance Ruling Order No. 61 dated 07.07.2020, in the case of M/s. Manpar Icon Technologies, Lucknow, Uttar P....