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2024 (6) TMI 740
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....ade to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the SGST Act. 3. The Advance Ruling under GST means a decision provided by the authority or the appellate authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub section (1) of section 100 in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 4. As per the said sub-section (2) of Section 97 of the Act advance ruling can be sought by an applicant in respect of:- (a) Classification of any goods or services or both (b) Applicability of a notification issued under the provisions of this Act, (c) Determination of time and value of supply of goods or services or both, (d) Admissibility of input tax credit of tax paid or deemed to have been paid (e) Determination of the liability to pay tax on any goods or services or both (f) Whether the applicant is required to be registered (g) Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or res....
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....ZW. Before proceeding in the present case, we have to first go through the submissions made by the applicant which are as under: i. That as per the Circular No. 69/43/2018-GST, Dt. 26/10/2018, if there is the change in constitution of business leading to change in PAN then taxpayer can apply for cancellation of registration. Meaning thereby, without changing the PAN it may not be possible to change the Constitution of Business and as UKPSVEN being the Local Authority, as it possess the PAN No. as AAALU0118M, wherein "L" denotes the Local Authority, it may remain the Local Authority and work as such in the course of its Business and may not change its constitution of Business at its own discretion. That as per Query at Point No. 3.4 of the GST System Project: "FAQs: Registration issued by GSTN which, say that "Can I file an Amendment Application for change in constitution of business?" The Ans. is No, Amendment application form can't be filled for change in constitution of business as it results in change of PAN. You may, however, file an amendment application in case your PAN will not change as a result of the change in constitution of busine....
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....ing, - (1) renting of immovable property, and (2) services specified below- (i) services by the Department of Posts and the Ministry of Railways (Indian Railways) (ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport; (iii) transport of goods or passengers. vii. Herein, THDCIL is receiving the Works contract service from UKPSVEN and as per PAN & GST Registration of UKPSVEN, it is a Local Authority and hence THDCIL may need to pay GST under RCM but UKPSVEN claimed that though they are Local Authority, but for this particular work (Design, engineering and construction of 500 KL RCC Over Head Tank at THDCIL Campus, Rishikesh on "Deposit / Cost plus basis"), UKPSVEN is not to be treated as Local Authority and GST will be charged on Forward basis instead of RCM. So, THDCIL may need to pay GST under Forward charge basis instead of RCM by treating UKPSVEN is not as Local Authority. Accordingly opportunity of personal hearing was granted to the applicant on 25.01.2024. Sh. Rajat Varshney, Advocate, on behalf of the applicant appeared for personal hearing on the said date and re-....
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.... supply and is covered under Schedule -II of Section 7 of the CGST Act, 2017 and hence is a supply of service (Works Contract ) and that as per Point No. 5 of the Notification No. 13/2017(CTR) DT. 28/07/2017, the Business entity (Recipient) need to pay Tax under RCM when Services are being supplied by the Central Government, State Government, Union territory or Local authority and the supplier of services being a "LOCAL AUTHORITY", the applicable tax is payable in their hand under the provisions of RCM. In the aforesaid back drop the Applicant sought for advance ruling whether the Applicant i.e. the THDCIL needs to pay GST under Forward charge or under RCM and whether UKPSVEN can have Dual Status i.e. for some purposes it may be deemed to be Local Authority while for others it may not? We note that the service provider in the instant case i.e. UKPSVEN has opined that since in the instant case only they does not qualify to be a "LOCAL AUTHORITY" and hence the supply of services in the instant case does not fall under the provisions of RCM in the hand of the service receiver i.e. M/s THDC India Limited [the Applicant], In view of the above submissions and different view take....
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.... Evam Nirman Nigam and later on Uttarakhand Peyjal Sansadhan Vikas Evam Nirman Nigam. Currently the department works under the Ministry of Drinking Water & Sanitation, Govt, of Uttarakhand, as an undertaking of Uttarakhand Government. The department has been mainly responsible for planning, survey, DPR preparation and execution of water supply and sewerage projects in urban & rural areas of Uttarakhand State. Besides this, the department has been also authorized by State Govt, to works as construction agency for building and other works in Uttarakhand and in other States. It is a body corporate having perpetual succession and a common seal and capable of suing and being sued in its name. It has power to acquire, hold and dispose of the property. The relevant provisions of UPWSS Act are as under: (i) The preamble of the UPWSS Act indicates that U. P. Jal Nigam was brought into existence to provide for establishment of a corporation, authorities and organization for the development and regulation of water supply and sewerage services and for matters connected therewith. (ii) The Section 3(3) of the UPWSS Act provides that the assessee corporation shall for all purpo....
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....by the Central Government or any State Government with the Control or Management of a municipal or local fund". Thus, for the purpose of the GST Laws, any authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund qualifies as a 'Local Authority'. The definition of the 'local authority' is contained in Section 3 (31) of the General Clauses Act, 1897 also which is as under- "local authority" shall mean a municipal committee, district board, body of port Commissioners or other authority legally entitled to, or entrusted by the Government with, the control or management of a municipal or local fund. Thus, it is seen that the term 'local authority' has been similarly worded in CGST Act, 2017 as well as General Clauses Act, 1897. The Apex Court in the landmark decision of Union of India Vs. R.C. Jain (1981) 2 SCC 308 while deciding whether the Delhi Development Authority is a 'local authority' or not, explained the scope of the term local authority under the General Clauses Act as follows: Let us, therefore, concentrate and confine our attention and enquiry to the definition of &....
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....others (supra) has laid down the following ingredients, which are required to be fulfilled cumulatively before an authority can be said to be a 'local authority', in the light of the definition of 'local authority' as given under Section 3 (31) of the General Clauses Act. i. The authorities must have separate legal existence as corporate bodies. It must be legally independent entities. ii. The authority must junction in a defined area and ordinarily, wholly or partly, directly or indirectly be elected by the inhabitants of the area. iii. The authority must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. iv. The authority must be entrusted by Statute with such Governmental functions and duties as are usually entrusted to municipal bodies. v. The authority must have the power to raise funds for the furtherance of their activities and the fulfillment of their projects by levying taxes, rates, charges, or fees. vi. Essentially, control or management of the funds must vest in such authority. We observe that the UKPSVEN, is not sa....
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....ct (supra) would reveal that no municipal or local fund has been entrusted by the Government. The fund of UKPSVEN is its own fund and cannot be equated with a fund entrusted by the Government. Thus, the important requirement in order to qualify as a local authority viz. control and management of a municipal/local fund is absent in the present case. We also find that the Hon'ble High Court, Allahabad (Lucknow Bench), while deciding the Income Tax Appeal No. 128/2008 has held that UP Jal Nigam (UKPSVEN) originally originated and has similar constitution) is not a "LOCAL AUTHORITY", although, the aforesaid order denying UP Jal Nigam, the status of local authority is in respect of dispute of Income Tax, the same is applicable to instant case as the order of the Hon'ble High Court has been passed after analyzing the definition of 'local authority' contained in General Clauses Act. Since, it has already been discussed that the term local authority' has been similarly worded in CGST/SGST Act, 2017 as well as General Clause Act, 1975. Further, the relevant clarification contained in Service Tax Educational Guide published in the erstwhile tax regime is reproduced as ....
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....ng, running and maintaining waterworks and sewerage system which is a function entrusted to Municipality in terms of article 243W of Constitution of India - UPJN qualifies as a Governmental authority [Section 2(54) of Central Goods and Services Tax Act, 2017/Uttar Pradesh Goods and Services Tax Act, 2017], [Para 28]" Thus, from the above facts we are of the view that the UKPSVEN, the service provider in the instant case, is not a 'local authority', within the meaning of the provisions of the CGST/SGST Act, 2017. We also note that the applicant has also contended that that the UKPSVEN has been registered with the Income Tax Department and the PAN card allotted by them clearly outlines that they are a "LOCAL AUTHORITY". We observe that on the basis of the said PAN card, the UKPSVEN applied and got registered with the GST Department. We are of the opinion the PAN card issued to UKPSVEN as a 'local authority' are as per the provisions of the Income Tax Act and that the GST registration are granted based on the information furnished by them and it appears that in the application for registration UKPSVEN declared their constitution of business as a 'local author....
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....irement of governmental authority has been fulfilled in the present case. The "UKPSVEN" is constituted for the development and regulation of water supply and sewerage services in the State of Uttarakhand. Under the section 14 of Uttaranchal (The Uttar Pradesh Water Supply and Sewerages Act, 1975) Adaptation and Modification Order, 2002 read with UPWSS Act, the "UKPSVEN" is inter alia entrusted with the function to operate, run, and maintain any waterworks and sewerage system. As per article 243W read with Twelfth Schedule of the Constitution of India, water supply for domestic, industrial and commercial purposes and public health, sanitation conservancy and solid waste management is a function of municipality. Further, as per the Uttaranchal (The Uttar Pradesh Water Supply and Sewerages Act, 1975) Adaptation and Modification Order, 2002 read with UPWSS Act, the State Government of Uttarakhand, have full control over the "UKPSVEN", hence the condition as mandated in the definition of Governmental Authority gets fulfilled in the instant case. Thus, from the facts and circumstances of the instant case, as discussed above, we hold that the service provider in the instant case i.e. U....
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....t if the services have been supplied by the Central Government, State Government, Union territory or local authority to a business entity, then central tax leviable under section 9 of the said Central Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services. In the instant case, as has been held above that the applicant does not qualify to be a "LOCAL AUTHORITY". We also find that this Authority in an application filed by M/s Uttarakhand Peyjal Sansadhan Vikas Evam Nirman Nigam, Mohini Road, Dehradun-248001 vide Ruling No: 05/2023-24 dated. 21.02.2024 ruled that M/s Uttarakhand Peyjal Sansadhan Vikas Evam Nirman Nigam is not a 'local authority', vid thin the meaning and ambit of the provisions of the CGST/SGST Act, 2017, but is a "governmental authority" and held that the applicability of the provisions of the Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017, does not arise in the instant case. It has also been held by this Authority that by virtue of provisions of SI. No. 4 & 5 of the Notification No. 12/2017-Central Tax (Rate), dated 28.6.2017, as amended, services by governmental authority under service code o....