TaxTMI 
TaxTMI 
2023 (6) TMI 1049
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....y M/s. Andhra Pradesh corporation for outsourced services (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 3. Brief facts of the case 3.1 M/s. Andhra Pradesh Corporation for Outsourced Services (hereinafter referred as "APCOS") is registered taxpayer with GSTIN 37AASCA9533BIZH with effect from 15/07/2020 and having, its principal place of business located at NTR ADMINISTRATIVE BLOCK, 2nd FLOOR, P. N. Bus stand, Vijaywada, Krishna, Andhra Pradesh, 520013, is providing manpower supply services (SAC 998519) to various government departments, corporations, municipalities and other public institution in the state of Andhra Pradesh. 3.2 Andhra Pradesh Corporation for Outsourced Services (APCOS) is established in accordance with G. O. Ms. No. 126 dated 18/10/2019, which is incorporated under section 8 of the Companies Act, 2013, as a not-for-profit company, to achieve the following outcomes: i Removal of private outsourcing agencies / middle men ii Corruption free outsourcing manpower placement for all Government departments / organizations. iii 50% reservation for SC's / ST's / BC's & Minoritie....
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....ons pertaining to panchayat and municipality. On Verification of basic information of the applicant, it is observed that the applicant is under Central jurisdiction i.e, Krishna Lanka Circle, Amaravathi Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017. In response, remarks are received from the central jurisdictional officer concerned stating that no proceedings lying pending with the issue, for which the advance ruling sought by the applicant. 5. Brief facts of the case 5.1 The applicant submits the following in support of their arguments : Fact No. 1: As per the G.O Ms No. 126 and G.O.Ms.No. 136, APCOS is a single point solution for the manpower requirements of all the governmental organizations, departments, and corporations. The exact scope of operations of APCOS can be ascertained from various documents, and practices followed by various entities. Some of the salient features to be considered here are as under. 1) APCOS is not an agency that recruits manpower for the government entities. The recruitment....
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....ot a part of consideration of APCOS. Fact. No. 2 The functions entrusted to a municipality under the Twelfth Schedule to Article 243W of the Constitution and the list of Departments/ Authorities/ Local Bodies, etc., discharging those functions 6. Applicant's Interpretation of Law: 1. APCOS is of the opinion that the supply of manpower supply services to the departments mentioned above is "pure service" as the aforesaid services are listed in 11th and 12th schedule of the constitution as a function pertaining to panchayats and municipality respectively and as per the definition, it qualifies as "pure services" and that their scope of services involve no supply of materials or any construction activities, Hence The same is eligible for GST exemption. 2. The applicant submits That, notification No. 12/2017- Central Tax (Rate) dated 28-06-2017 as amended stipulates at SI.No 3 of the notification that GST rate is NIL. on "PURE SERVICES" which is extracted here as under : In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), The Central Government, on being satisfied that it is necess....
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.... Nil 4. The applicant stated that, Vide Notification No. 32/2017- Central Tax (Rate) dated 13-10-2017, Government Authority and Government Entity were defined as under "(zf) "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 3 (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 243G of the Constitution. (zfa) "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 authority.". 5. The applicant further states that, vide Notification No. 16/2021 - Central Tax (Rate) dated 18-11-2021, GOI has made amended the rate notification 12/2017 (Central Ra....
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....ply of manpower services are exempt from the liability of GST in terms of clause 3 of the Notification No 12/2017 supra, being in the nature of pure service covered under the article 243G and 243W of the Constitution being functions entrusted to the Municipality and Panchayat. 7. Personal Hearing: The proceedings of Personal Hearing were conducted on 29.03.2023, for which the authorized representative, CA. Sivaprasad Annavarapu attended and reiterated the submissions already made. 8. Discussion and Findings: We have examined the issues raised in the application in light of the facts and arguments submitted by the applicant. We have considered the submissions made by the applicant in their application for advance ruling. We have considered the issues involved from which advance ruling is sought by the applicant and the relevant facts along with arguments made by the applicant and also their submissions made during the time of the personal hearing. Now we examine the issue, whether the services of manpower supply services to various Government authorities and Government entities provided by the applicant, ie., APCOS is eligible for exemption from GST, as per Notificati....
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.... any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India. The phrase "pure services" has not been defined under GST, the same can be construed in general terms as any supply which is either deemed as services under Schedule II of CGST Act or which are not covered under the definition of goods shall be categorized as pure services. In the instant case, the applicant is mainly involved in the supply of manpower services to various government departments as stated above, which can be categorized as pure services, thus satisfying the first condition. The second condition to be verified is whether the entities mentioned at para 5.1 above are Central Government or State Government or Local authority. In this regard, definitions of the same as per the CGST Act, 2017 are as under: (i) As per Section-2(53) of the CGST, Act, 2017, "Government" means the Central Government. (ii) As per Section-2(53) of the CGST, Act, 2017, "Government" means the State Government. (iii) "local authority" means ,- ....
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....he supply of services rendered by AOCOS as per section 15 of GST Act. We invite attention to the relevant part of the section which is extracted here as under: 15. Value of taxable supply. (1) The value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. (2) The value of supply shall include,- (a) any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the State Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier; (b) any amount that the supplier is liable to pay in relation to such supply but which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both; (c) incidental expenses, including commission and packing, charged by the supplier to....
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....ers of the same family; (b) the term "person" also includes legal persons; (c) persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other, shall be deemed to be related. The applicant had put forth the point of argument that the value of the service rendered by them is only limited to collection of 'welfare fund' and also contented that the employees are not recruited by the applicant directly and they are concerned only with the payroll management . They have provided the way for the processing of bills and the way the monies are transferred directly into the employees account directly from the state CFMS account. However, the following documentary evidences viz., the GO issued by government stating the objectives for which the applicant is formed by APCOS, the periodical invoices being raised by APCOS on various departments, the placement intimation letters being issued by the applicant stating that they are placing the staff in the concerned department are neither consistent with the contentions of the applicant nor conclusive and hence the c....
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.... of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of the Constitution of India are exempted as per notification stated supra, rest are taxable at 18% GST. ============= Document 1API Error processing document Document 2 dispensaries (xxiv Family welfare ) (xxv) Women and child development (xxv) Women and child development (xxv) Women and child development AP Womens Cooperative Finance Corporation Corporations AP Women S Commission A.P. State Department Department Protection Of Child Rights Commission For (xxv) Women and child development ILLLLLL L Social welfare, including welfare of the handicapped and mentally retarded Social welfare, including welfare of the handicapped and mentally retarded Social welfare, including welfare of the handicapped and mentally retarded Social welfare, including welfare of the handicapped and mentally retarded Social welfare, including welfare of the handicapped and mentally retarded Social welfare,....