TaxTMI 
TaxTMI 
2023 (12) TMI 725
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....to as Appellant) against the Advance Ruling No. GUJ/GAAR/R/27/2021 dated 19.07.2021. 3. Briefly, the facts are enumerated below for ease of reference: 4. The appellant, a Public Limited Company, is registered with the department & their GST registration no. is 24AAGCA6478P1ZM. 5. Ahmedabad Municipal Corporation [AMC], launched the Bus Rapid Transport System [BRTS] to ease the traffic situation in Ahmedabad city. To run and operate buses under the BRTS, AMC incorporated a Special Purpose Vehicle [SPV] called Ahmedabad Janmarg Limited [appellant]. It received funding under the Jawaharlal Nehru National Urban Renewal Mission [JnNURM], a programme launched in 2005 by the Government of India, to improve the quality of life and infrastructure in the cities. 6. On the grounds viz • that AMC is a 100% shareholder of the appellant; • that appellant is a mere offshoot of AMC & its inseparable part &. extended arm; • that it does the activities as per the functions entrusted to Municipal Corporation; that it is established and managed by AMC • that majority of its employees at top management are sent on deputation by AMC; ....
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....ocal authority', they can be construed to be a 'government entity' or an 'Governmental authority'. 7. In view of the aforementioned belief, the appellant sought a ruling from the Gujarat Authority for Advance Ruling [GAAR] on the following questions viz 1. Whether AJL would be qualified as Local Authority' under the Central Goods and Services Tax Act, 2017? 2. Whether AJL is liable to pay GST on procurement of security services received from any person other than body corporate under reverse charge mechanism, considering the exemption granted in sl. no. 3 of Notification No. 12/2017 Central Tax (Rate) or sl. no. 3 of Notification No. 09/2017 IGST (Rate)? 3. Whether AJL is required to pay GST on advertisement services or the service recipient of AJL is required pay GST under reverse charge mechanism considering Notification no. 13/2017-Central tax (Rate) dated 28-06-2017? 4. Whether AJL is required to be registered as a deductor under GST as per the provision of Section 24 of the CGST Act? 5. If AJL does not qualify to be local authority under Central Goods and Services Tax Act, 2017 in Part A, can be it constru....
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.... in section 2(69) of CGST Act, 2017; • that the term 'in relation to' used in SI. No. 3 of exemption notification Nos. 12/2017-CT(R) & 9/2017-IGST (R) is wide & encompasses all services provided to perform function entrusted under Article 243 W of the Constitution of India; that they wish to rely on the following rulings viz • M/s. A B Enterprise [Ruling No. GUJ/GAAR/R/2020/181 • Shri Jayesh Dalal [Ruling No. GUJ/GAAR/R/08/2019] • M/s. PDCOR Ltd [Ruling No. RAJ/AAR/18-19/13 dtd 25.8.18]; • Sewage & Infrastructural Development Corporation of Goa [Ruling No. GOA/GAAR/10/18-19 dtd 30.9.19]; • Shri Sumitabha Ray [Ruling No. 27/WBAAR/19-20 dtd 23.9.19]; • M/s. PDCOR Ltd [Ruling No. RAJ/AAR/18-19/13 dtd 25.8.18]; • Shri Roopesh Kumar [Ruling No. KAR/AAR/101/19-20 dtd 27.9.191; • M/s. Arihant Dredging Developers Ltd [Ruling No. 49/WBAAR/19-20 dtd 10.6.19]; • that in respect of the advertising services for which they recover certain amount they are not required to pay GST under RCM; that they are required to deduct TDS in terms of section 51 of the CGST Act.....
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....es (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 243 W of the Constitution. Nil Nil 2. Definitions. - For the purposes of this notification, unless the context otherwise requires, - (zf) "governmental authority" has the same meaning as assigned to it in the Explanation to clause (16) of section 2 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017); O Notification No. 32/2017-CT (Rate) dated 13.10.2017 (ii) in paragraph 2, for clause (zf), the following shall be substituted, namely "(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 (ii) established by any Government, with 90 per cent, or more participation by way of equity or control, to carry ou....
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....s that in terms of section 2(69)(c) of the CGST Act, 2017, they fall within the ambit of 'local authority'. Now we have already reproduced the relevant extracts supra, which states that local authority means a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund. The appellant further in para 5 of the their grounds of appeal has stated as follows: "5. The 'local fund' used in the above definition has been defined under Gujarat Treasury Rules, as (i) revenue administered by bodies which by law or rule having the force of law come under the control of Government, whether in regard to proceedings generally, or to specific matter such as sanctioning of their budgets, sanction to the creation or filling up of particular appointments, the encashment of leave, pension or similar rules, (ii) The revenues of anybody which may be specially notified by Government as such." 14. A conjoint of the above clearly depicts that in terms of 2(69)(c) ibid, for the appellant to fall within the ambit of the....
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....nted as per the provision of GPMC Act. The fund of AMI'S is managed by Transport Manager through Transport Committee under the supervision of AMC. In view of the above the applicant i.e. AMI'S is an extended arm of the Municipal Corporation which is governed by GPMC Act and does the activities as per the function entrusted to Municipal Corporation." [emphasis supplied) Now GPMC Act, mentioned supra means "the Gujarat Provincial Municipal Corporations Act, 1949 [Bombay Act No. LIX of 1949], The relevant portion of the Act is reproduced below for ease of reference: An Act to provide for the establishment of Municipal Corporations for certain cities in the Province of ^1[Gujarat.] WHEREAS it is expedient to provide for the establishment of municipal corporations in ^2[the City of Ahmedabad] and certain other cities with a view to ensure a better municipal government of the said cities; It is hereby enacted as follows:- CHAPTER I. Preliminary Short title and commencement 1. (1) This Act may be called the ^2[Gujarat] Provincial Municipal Corporations Act, 1949. ^3[(2) It extends to the whole of the State of Gujarat.] (3) This....
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....nt company to be owned by Nagpur Municipal Corporation, completely for shouldering the responsibility of Nagpur Water Supply Schemes Development, water accumulation, supervision and administration. " We have gone through section 58B of the Nagpur City Municipal Corporation Act, 1948 which states as follows: [58B. Performance of functions by agencies. Where any duty has been imposed on, or any function has been assigned, to the Corporation under this Act or any other law for the time being in force, or the Corporation has been entrusted with the implementation of a scheme, the Corporation may.- (i) either discharge such duties or perform such functions or implement such schemes by itself or (ii) subject to such directions as may be issued and the terms and conditions as may be determined by the State Government, cause them to be discharged, performed or implemented by any agency : Provided that, the Corporation may also specify terms and conditions, not inconsistent with the terms and conditions determined by the State Government for such agency arrangement. It was in the aforementioned context that the Advance Ruling Authority held....
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....pellant has questioned the finding as far as the GAAR has ruled that the appellant docs not fall within the ambit of 'governmental authority' or government entity', we find it appropriate to examine the claim on merits, in respect of the period prior to the above amendment. Both these terms are defined under the notification, supra and are reproduced above for ease of reference. As has been held by the GAAR, we also observe that the appellant, a Public Limited Company, incorporated under the Companies Act, has not been set up by any Act of Parliament or the State Legislature; that the applicant has not been established by any Government which stands defined under section 2(53) of the CGST Act, 2017. In view of the foregoing, we agree with the findings of the GAAR that the appellant is neither a 'governmental authority' nor a 'government entity'. 22. We would finally like to address the averment regarding whether the appellant is required to be registered as a deductor under the GST as per the provisions of section 24 of the CGST Act, 2017. 23. Before moving forward, it would be prudent to reproduce the relevant provisions for the ease of reference ....