TaxTMI 
TaxTMI 
2024 (6) TMI 826
X X X X Extracts X X X X
X X X X Extracts X X X X
....or 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 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 appli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m Nirman Nigam, is entitled to claim ITC as per CGST norms. QUESTION In view of the above facts, 'the applicant' is seeking advance ruling as to; 1. Whether RCM shall be applicable in this case and tax be paid by THDC on Reverse Charge Basis or this contract will fall under forward charge and tax be paid by THDC to UK Peyjal on forwards basis? 2. Whether THDC or UK Peyjal is entitled to avail ITC on the GST deposited? APPLICANT SUBMISSION AND PERSONAL HEARING: 6. From the record submitted by the applicant we find that applicant is registered in Uttarakhand with GSTIN bearing No. 05AAALU0118MHZL. Before proceeding in the present case, we have to first go through the submissions made by the applicant which are as under:- i. They are a Local Authority constituted under Notification of Uttarakhand Government and Implementing Agency of Centre/State Government undertaking the construction/erection of Govt, schemes relating to water supply, sewerage etc. and providing these services to purely Government. ii. That in the instant case they entered into an Memorandum of Undertaking (MOU) with a Public Sector Undertaking (PSU) [Joint Ven....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts and circumstances which were filed by the applicant for our consideration. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made by applicant and his authorized representatives during the hearing. We have also considered the issue involved on which advance ruling is sought by the applicant, relevant facts and the applicant's interpretation of law. Now we proceed by taking up the issue. 8. We have carefully considered all the submissions made by the Applicant. In the instant case the applicant entered into an Memorandum of Undertaking (MOU) with THDC India Limited, a Public Sector Undertaking (PSU) [Joint Venture of Govt, of India and Govt, of Uttar Pradesh), for construction of an overhead water tank at Rishikesh in the THDC colony, meant for use by the THDC only. We have gone through the submission made by the Applicant and find that the applicant is engaged in construction / erection relating to water supply, sewerages etc. We find that although the applicant in their application has claimed that they are providing services to purely Government only, but we observe that in the instant case the r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder Local Authority as defined under Section 2 (69) of Goods and Services Tax Act, 2017. We find that Section 2 (69) of Goods and Service Tax Act, defines Local Authority' as under:- (a) A "Panchayat" as defined in clause (d) of article 243 of the constitution; (b) a " municipality" as defined in clause (e) of article 243P of the Constitution; (c) a Municipal Committee, a Zila 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; (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006; (e) A Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; (f) a Development Board constituted under Article 371 and article 371J of the Constitution; or (g) A Regional Council constituted under Article 371A of the Constitution. We have gone through the constitution of Uttarakhand Peyjal Sansadhan Vikas Evam Nirman Nigam (hereinafter referred to as the UK Peyjal Nigam). We find that originally the applicant was constituted and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an the Chairman shall be a Managing Director, a Finance Director, both to be appointed by the Government and secretary to the State Government in the Finance Department (Ex-officio), Secretary to the State Government in the Local Self Government Department (Ex-officio), the Director of Local Bodies, Uttar Pradesh (Exofficio), the Director of Medical and Health Services U.P. (Ex-officio) and three elected Heads of Local Bodies in the state to be nominated by the State Government. (iii) Section 40 (1) of the UPWSS Act provides that the corporation shall have its own fund to be called the Nigam Fund which shall be deemed to be a local fund and to which shall be credited all moneys received otherwise than by way of loans by or on behalf of the corporation. We find that in the Notification No. 2878/Nine-2(12-Adhi.)/2001 dated 22.11.2002, it has been provided as under: "In exercise of powers conferred under the provisions of sub-section (1) of section 3 of the Uttaranchal (The Uttar Pradesh Water Supply and Sewerage Act, 1975) Adaptation and Modification Order, 2002, the Governor is pleased to constitute the "Uttaranchal Payjal Sansadhan Vikas Awam Nirman Nigam", whi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to be a local Authority, must be of like nature and character as a Municipal Committee, District Board or Body of Port Commissioners, possessing, therefore, many, if not all, of the distinctive attributes and characteristics of a Municipal Committee, District Board, or Body of Port Commissioners, but, possessing one essential feature, namely, that it is legally entitled to or entrusted by the Government with, the control and management of a municipal or local fund. What then are the distinctive attributes and characteristics, all or many of which a Municipal Committee, District Board or Body of Port Commissioners shares with any other local authority? First, the authorities must have separate legal existence as Corporate bodies. They must not be mere Governmental agencies but must be legally independent entities. Next, they must function in a defined area and must ordinarily, wholly or partly, directly or indirectly, be elected by the inhabitants of the area. Next, they must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The Apex court in the RC Jain case (supra) has held that the authority must enjoy a certain degree of autonomy, with freedom to decide for themselves questions of policy affecting the area administered by them. The autonomy may not be complete and the degree of the dependence may vary considerably and an appreciable measure of autonomy there must be. Perusal of the Uttaranchal (The Uttar Pradesh Water Supply And Sewerages Act, 1975) Adaptation and Modification Order, 2002 read with UPWSS Act, reveals that the UK Peyjal Nigam, is not enjoying appreciable nature of autonomy as discussed below. (1) As per provisions of the Act (supra), the Chairman shall be appointed by the State Government. (2) As per Section 6(3) of the Uttaranchal (The Uttar Pradesh Water Supply And Sewerages Act, 1975) Adaptation and Modification Order, 2002 read with UPWSS Act, the Managing Director and finance director shall hold office on such terms and conditions as the State Government may by order specify. (3) As per Section 14 of the Uttaranchal (The Uttar Pradesh Water Supply and Sewerages Act, 1975) Adaptation And Modification Order, 2002 read with UPWSS Act, the UK Peyjal N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by a State or Central Law local authorities? No. The definition of 'local authority' is very specific as explained in point no 2.4.8 and only those bodies which fall within the definition comprise 'local authorities'. It would not include other bodies which are merely described as a local body by virtue of a local law." We find that similar view has been taken by the Appellate Authority for Advance Ruling, Uttar Pradesh in the Appeal Order No. 05/AAAR/ 10/03/2023 dated 10.03.2023, while deciding the appeal of M/s The Indian Hume Pipes Company Ltd., Karai Jhansi, Uttar Pradesh, against Advance Ruling No. UP ADRG-12/2022 dated 23.09.2022 and also by the Authority for Advance Ruling, Tamil Nadu in the Advance Ruling No. 13/AAR/2023, decided on 6-6-2023 [(2023) 11 Centax 219 (A.A.R. - GST - T.N.). In the Advance Ruling No. UP ADRG. 12/2022, dated 23-9-2022 the Authority for Advance Ruling, Uttar Pradesh in the case of Indian Hume Pipe Company Ltd. [(2023) 2 Centax 223 (A.A.R. - GST - U.P.)], held as under: "State water corporation - Local Authority - Whether Uttar Pradesh Jal Nigam (UPJN) qualifies as a 'local authority' - HELD : In view ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the supplies made by them, it is necessary to examine in detail whether the applicant qualifies to be termed as a local authority in terms of the definition of 'local authority' as given in Section 2 (69) of the CGST Act, 2017. In so examining, we find that applicant does not qualify as a local authority' as defined in Section 2 (69) of the CGST Act, 2017. We further find that similar view has been taken by the Karnataka Appellate Authority for Advance Ruling, in the Appeal Order No. KAR/AAAR/01/2023 dated 07,02.2023 while deciding the appeal against Advance Ruling No. KAR ADRG-23/2022 dated 12.08.2022. Having held that the "UK Peyjal Nigam" is not a local authority', now we proceed to examine as to whether the "UK Peyjal Nigam" is a 'Governmental Authority' or not? It is relevant to note that the term "Governmental Authority" is not defined in the CGST Act. However, Notification No. 31/2017-Central Tax (Rate), dated October 13, 2017, which amended the Notification No 11/2017-Central Tax (Rate), dated June 28, 2017, defined Governmental Authority as follows: "ix. Governmental Authority " means an authority or a board or any other body. - ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ambit of the provisions of the CGST/SGST Act, 2017, but is a "governmental authority". Further, as per SI. No. 5 of Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017, tax leviable, shall be paid on reverse charge basis by the recipient in case of "services supplied by the Central Government, State Government, union Territory or local authorities to a business entity" and hence the applicant has asked for ruling in this regard whether the provisions are applicable on them. For better perspective, the relevant portion of the said notification is reproduced as under: "GSR....(E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government on the recommendations of the Council hereby notifies that on categories of supply of services mentioned in column (2) of the Table below, supplied by a person as specified in column (3) of the said Table, the whole of 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 as specified in column (4) of the said Table:- Table ....