TaxTMI 
TaxTMI 
2024 (8) TMI 63
X X X X Extracts X X X X
X X X X Extracts X X X X
....Maharashtra Jeevan Pradhikaran ('MJP') as a part of Jal Jeevan Mission which is a mission of Government of India which is performed & invoiced after 01.01.2022 but which is allotted before 01.01.2022? 3. What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran ('MJP') as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed & invoiced after 01.01.2022)? 4. Who is the service receiver within the meaning of Sec. 2 (93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided before 01.01.2022? 5. Who is the service receiver within the meaning of Sec. 2 (93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided after 01.01.2022? 6. Whether appointment of MJP as an agency to implement water supply schemes amounts to delegation of sovereign function enumerated in Sch. XI & XII within the framework of Constitution of India so as to hold that MJP has performed the function entrusted under Article 243G & 243W of the Constitution of India? At the outset, we would l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Notification 12/2017. 1.4 In Maharashtra, the Govt. of Maharashtra has enacted the Maharashtra Jeevan Authority Act in 1976 virtue of which all water by supply/drainage/sanitation/storm water schemes are implemented through the said authority. The said authority is wholly controlled by the Govt. & receives funds from consolidated funds as per budget allocations from the respective Government for execution of any new water supply/sanitation scheme. Please see page no 20 of the paper book that shows that the amounts received by the applicant are out of budget allocations. 1.5 By virtue of amendment dated 01.01.2022 referred to in para 4 above, there is a perception in trade that the activity of the applicant is no longer exempted but is chargeable to full rate of tax i.e., 18%. However, there is no uniformity in understanding the exact legal position of tax eligibility on the applicant's activity, for some of the Zilla Parishad's, some State Governments add GST payable @ 18% to the invoice payable in respect of pure service activity performed, by tax Persons identically situated, to that performed, by the applicant. Therefore, this present application is preferred in order t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s commissioner of CT, Hyderabad (43 GSTL 236) Wherein it was held that services provided by the Appellant to Government Corporations or Authorities established by the State Government under a legislation or government order are provided to a "Government Authority" within the meaning of Notification 25/2012. b. Karad nagar parishad versus commissioner of C. Ex. & ST, Kolhapur (20 GSTL 288) Wherein it was held that regulatory fees charged by the Municipal Corporation come within the ambit of "sovereign functions" within the meaning of Article 243W and hence not exigible to service tax. c. Ganpati mega builders (1) Pvt. Ltd. (58 GSTL 324) Herein it was held that construction services falling within the purview of Article 243 G & W provided to JNNURM, Mandi Samiti & Mandi Parishad & other municipal bodies are not subject to service tax. d. Cuddalore Municipality (55 GSTL 397) Wherein it was reiterated that services provided to Municipalities with respect to functions specified in article 243 G & W are not chargeable to service tax. 2.1.2. The applicant provides technical management consultancy services to the MJP, these services are related to water supply....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al Government or the State Government. The Applicant is annexing herewith following documents that clearly & unequivocally show that the work of water supply/drainage schemes undertaken which is outsourced to the applicants is being executed & controlled by the Central/State Government as a part of Jal Jeevan Mission:- a. Operational Guidelines issued by Government of India Ministry of Jal Shakti in December 2019. Specific attention is drawn to Financial Planning & Funding at Sr no 7 page no 44 to 53 of the document. b. Funds Allocation order no 682 dated 28-04-23 issued by State Water & Sanitation Mission Director allocating the funds to various districts for Project Management Consultancy under which the work of the applicant falls. c. Government of Maharashtra Resolution of Water Supply & Sanitation Department dated 17-06-2021 appointing Under Secretary as the Drawing & Disbursing Officer & Deputy Secretary as the controlling officer. 2.1.3 Thus, even in case of services rendered post 01.01.2022, the applicant submits that the services rendered, though apparently rendered to MJP, become services rendered to State Government/Central Government becaus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ely. The above functions are managed by the Central Government as a mission. In such circumstances, it must be held that the Central Government along with the State Governments/ municipalities, as principals, are executing the water supply & disposal schemes through their agent MJP. The payments made by MJP, in fulfilment of the constitutional of duties the State/Central/Municipality Governments must be construed as payment by an agent on behalf of the respective principal. The principle of common law that payment by agent amounts to payment by principal applies with full force in the facts & circumstances of the presently impugned transaction & therefore the respective Government's become the service recipient under Section 2 (93) of GST Act. 2.4 As specified before now, water supply, irrigation, canaling, drainage and other related functions are responsibilities of the Centre & State Governments, as per Entry 56 of List I & Entry 17 of List II, respectively, of the Indian Constitution. The applicant submits that where the makers of the constitution have assigned a certain responsibility upon the government. The government cannot, by enacting a legislation or otherwise, further....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt in respect of Jal Jeevan Mission remain to be rendered to the respective Government who has financed the above activity through their budget allocations as a part of their Constitutional function. 2.5. The applicant has annexed all the relevant documents in support of the averments. If the Hon'ble Authority for Advance Ruling desires certain more information &/or documents, the applicant is ready & willing to supply the same. 2.6 Additional Submission dated 26.06.2024 Kindly find below common additional argument points on facts & law in respect of all the four applicants: - 2.6.1. Water is a State Subject. Entry 17 of List II VII Schedule lays down Water, that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power subject to the provisions of entry 56 of List I. List I entry 56 deals with interstate rivers. As regards supply of water, the Water policy has defined major projects & minor projects. The former are those that have an irrigation potential of more than 2000 hectares whereas less than 2000 hectares are minor projects. Schedule XI entry 3 mentions "Minor irrigation, water management and watershed development.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y support as a part of Government Scheme. In case of a Centrally sponsored scheme where the payment is through budgetary support, the payment is authorized through a money bill that becomes a Finance Act upon passage, duly passed in the Parliament/ Assembly having the force of law. The above statement also applies with full force to the budgetary support by State Government. Section 2 (93) defines recipient of service as the person who is liable to pay the consideration where consideration is payable for the supply. In the present case where the payment is authorized through the Central/ State Budget, by virtue of the respective finance Act, the concerned Government is legally liable to pay the sum earmarked & appropriated to a given expenditure head & therefore they become the person liable to pay & consequently the service receiver is the Central/ State Government. The applicants herein say & submit that their bills are cleared only when the amounts are received from budgetary support. Kindly note that all the arguments are restricted & limited to schemes implemented through Jal Jeevan Mission which is a Central mission scheme. 2.6.6. The payments received by the applicants is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....JJM has been formulated in 2019 with limited time span of 5 years. It is a scheme which contemplates 100% Government funding, as against other schemes where contributions from other stake holders are involved similarly the present application is not intended in respect of schemes implemented through Commercial Borrowings. 2.6.11. Therefore, given the fact that payment is made through a designated account not in control of MJP rather in full control of Central/ State Government, JJM as a scheme entails the responsibility of Central/ State Government in making the payments thus making them the person liable to pay within the meaning of Section 2 (93). 2.6.12. While interpreting the clause of payment, if one was to consider, the event of non-payment on the part of receiver, such scenario would lead to infringement of finance bill apart from the breach of contract. In such case the statutory liability to pay & incur the expenditure as per finance bill takes precedence over the contractual liability as per clause 5.5. of the empanelment agreement, while interpreting Section 2 (93), i.e. person liable to pay. 2.6.13. Section 2 (93) specifically includes an agent acting on behalf....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en devised in consequence of the above duty of the respective Governments & payments under Jal Jeevan Mission are made in consequence of the Constitutional/ Legal duty of the sovereign Governments to supply water. It is in this context that the applicants submit that the State/ Central Government are making the payments being Constitutionally & legally liable to make payments for the water supply schemes. 2.7.4. The immediate issue that arises is then what is the impact of the Governments above lega1 duty to pay in the present matter where the contractual obligation is undertaken by MJP & then who is to be reckoned as the person liable to pay as per Section 2 (93) of GST Act. The applicant submits that the legal liability to pay overrides the contractual liability to pay. The above proposition may be supported by an example. Say the legal liability to pay GST is on supplier u/s 9 (1) in respect of transactions liable to forward charge. Suppose in a given case the above liability is contractually undertaken by the receiver or buyer. Even then the legal liability to pay overrides the contractual obligation undertaken & remains with the supplier. Similarly, it is submitted, that in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on no 12/ 2017 entry 3 as amended w.e.f. 01-01-22 being to MJP which is a Government Authority/ Entity & supplies after 01-01-22 are taxable @18%. 3. JURISDICTIONAL OFFICERS SUBMISSION- This office has perused the documents on record, relevant notifications, circulars, amendments, facts of the matter and all the questions raised by the applicant. Based upon these, submission from this office is as follows: 3.1 Questions raised by applicant revolves around entry at serial number 3 of notification Number 12/2017-Central Tax (Rate) dated 28/06/2017. Notification No. 31/2017-CT (R) which has amended certain clauses of notification 11/2017 has defined the terms "Government Authority" and "Government Entity" as under: - "(ix) "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 90per 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 243 G of the Constitution. 3.2 Aforesaid notification number 12....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be considered that pure services are supplied by the applicant to Maharashtra Jeevan Pradhikaran Thus the first part of the conditions mentioned above is satisfied in the subject case. 3.4 The second condition to be satisfied for availing exemption under the above referred Notification is that such pure services, as are being rendered in the subject case, should be supplied to the Central Government, State Government or Union territory or local authority or a Governmental authority [or a Government Entity]. In this regard Hon. Maharashtra Authority for Advance ruling has passed an order on 22-September-2021 in case of M/s. Mekorot Development & Enterprise Ltd wherein similar question was dealt and it was held that Maharashtra Jeevan Pradhikaran is clearly getting covered under the definition of "Government Entity". Thus as this issue has already been clarified, Maharashtra Jeevan Pradhikaran gets covered as "Government Entity" in this case also. 3.5 Third condition mentioned above is that such services should be provided 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 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of notification number 12/2017-Central Tax (Rate), Maharashtra Jeevan Pradhikaran does not get covered by the said entry and three conditions, as mentioned in above paragraphs, required to be satisfied to become eligible for availing benefit of the said entry are not getting full-filled from 01-01-2022. Hence activity of supply of services by applicant to Maharashtra Jeevan Pradhikaran is taxable from 01-01-2022. The services provided by applicant are professional in nature which is inferred from agreement between applicant and Maharashtra Jeevan Pradhikaran as submitted. Applicant has submitted sample invoices issued for services provided to Maharashtra Jeevan Pradhikaran. From the perusal of said invoices, it is found that Taxpayer has provided service of "Carrying out Reconnaissance Surveys and Preparation of Feasibility Report and Detailed Project Report". All these services are professional in nature and has to be provided by professional person having expertise in the field. These reports cannot be prepared by layman. In this regard entry at serial number 21 (ii) mentioned in notification number 11/2017-Central Tax (Rate) need to be perused. Sr.No. Chapter, Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....plicant is required to provide services to Maharashtra Jeevan 11 Pradhikaran and Maharashtra Jeevan Pradhikaran is required to pay consideration to applicant for the same. Thus, from combined reading of 'agreement between Maharashtra Jeevan Pradhikaran and applicant' and section 2 (93) of CGST Act, it is very clear that Maharashtra Jeevan Pradhikaran is service recipient/receiver in the present case for both the scenarios of provision of service before 01-01-2022 and provision of service after 01-01-2022. Applicant has further asked that whether appointment of Maharashtra Jeevan Pradhikaran as an agency to implement water supply schemes amounts to delegation of sovereign function enumerated in Sch. XI & XII within the framework of Constitution of India so as to hold that Maharashtra Jeevan Pradhikaran has performed the function entrusted under the article 243G & 243W of the constitution of India? The aforesaid question posed by applicant does not have any direct correlation with CGST/SGST Act and is prima facie not being governed by provisions of CGST/SGST Act. Hence no submission is made in this regard. 4. HEARING Preliminary hearing in the matter was held on 09.05.202....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Agreement. (Emphasis supplied) 4 In consideration of the payments to be made by the MJP to the Consultant as hereinafter mentioned in Clause 4 of the Consultancy Agreement, the consultant hereby agrees with the MJP to perform the Services of Project Development & Management Support" as CLASS II Consultant for Pune Region in conformity with the provision of the Agreement. (Emphasis supplied). 5.1.5. Important relevant clauses of the Tender document e-Tender No. 2-2020-21 are as under, (a) Page 54 - Clause -1.10 Taxes and duties: All duties, taxes and other levies as applicable on date of submission of Tender shall be payable by the Consultant in respect of the transaction between the Consultant and their consultation vendors/sub-suppliers is included in the Proposal's price i.e. in financial rate and 'Maharashtra Jeevan Pradhikaran' will entertain no claim on this behalf. All taxes, duties and levies in respect of the transaction between 'Maharashtra Jeevan Pradhikaran' and Consultant are included in the price as per financial rate. However, any increase in the statutory tax after submission of bid shall be on 'Maharashtra Jeevan Pradhikaran's account and shall be re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....". Agency name stated in the advice is Jala Jeevan mission Maharashtra, Escrow account -debit Bank HDFC Bank limited approval date in PFMS is 30th June 2023 amount Rs. 15,16,500/-. Beneficiary name is Primove Infrastructure consultants Private limited. 5.2 The applicant has raised multiple questions, which need findings, discussion & decision on following issues, 5.2.1 What is the classification of the services supplied by the applicant to Maharashtra Jeevan Pradhikaran ('MJP') as a part of Jal Jeevan Mission which is a mission of Government of India allotted, and its HSN/ SAC Code and applicable entry in Notification No. 11/ 2017-Central Tax (Rate) dated 28th June 2017? 5.2.2 Services provided to MJP for the Constitutional function of State & Central Governments, for which these Governments are liable to pay the consideration of contract, and as payment is made through PFMS, supplies, are in fact made to the Central & State Government. 5.2.3 Applicability of entry No. 3 in Notification No. 12/ 2017-Central Tax (Rate) dated 28tf June 2017,.to Supply of services where Time of supply is on or before 31-12-2021 and rate of tax applicable. 5.2.4 Applicability of entry No....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that Taxpayer has provided service of "Carrying out Reconnaissance Surveys and Preparation of Feasibility Report and Detailed Project Report". All these services are professional in nature and has to be provided by professional person having expertise in the field. These reports cannot be prepared by layman. In this regard entry at serial number 21 (ii) mentioned in notification number 11/2017-Central Tax (Rate) need to be perused. 5.3.3 Findings, discussion & decision The services supplied by the applicant are in nature of "Technical Consultancy for Project Development and Management support services, and hence classifiable under SAC code-998399-Other professional, technical and business services n.e.c., under the head Business and Production Services covered at Sr No 21 (ii) in the Notification No 11/2017-Central Tax (Rate)-dated 28th June 2017 and are taxable at rate of 18% (9% CGST & SGST each), wherever exemption is not applicable. Wherever exemption is not applicable. 5.4 Whether Services provided to MJP for the Constitutional function of State & Central Governments, for which these Governments are liable to pay the consideration of contract, and as payment is made....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ority/ Entity from notification no 12/2017 with effect from 01-01-2022, the activity performed & rendered by the applicant in respect of Jal Jeevan Mission remain to be rendered to the respective Government who has financed the above activity through their budget allocations as a part of their Constitutional function. 5.4.2 Jurisdictional Officers submission-The Officer stated that all these arguments are not based on evidence submitted by the applicant nor any binding precedent is cited by the applicant. Lastly, these arguments are vague and against express provisions of the GST Law and the contract submitted by the applicant. 5.4.3 Findings & Discussion- Being creature of GST Law this Authority cannot comment on the submission that setting up MJP is entirely unlawful and contrary to the constitutional prescriptions and procedure, this is not appropriate forum to discuss such issue. However, it is clear that, as per the Constitution it is the function/ duty or responsibility of State/Central Government or local Government, and hence setting up MJP which is a body corporate owned by Government is entrusted with the function, is not prohibited but entirely expected, for dev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ne part. 3. The MJP hereby agrees to pay the Consultant in consideration of the performance of the Services such amounts as may become payable under the provisions of the agreement at the times and in the manner prescribed in the Consultancy Agreement. 4. In consideration of the payments to be made by the MJP to the Consultant as hereinafter mentioned in Clause 4 of the Consultancy Agreement, the consultant hereby agrees with the MJP to perform the Services of Project Development & Management Support" as CLASS II Consultant for Pune Region in conformity with the provision of the Agreement. (Emphasis supplied). b. Provisions of GST Act-As per section 60 of The MJA Act, 1976, State Government has control over the "MJP". Under GST Act-MJP and the State Government are related persons and not agents and principal. And supply by them to each other is treated as deemed supply. Under GST such agent Principal relation does not exist between MJP & State Government. Refer relevant provisions which are as under, (a) Section 15. Value of Taxable Supply. - "Explanation. - For the purposes of this Act,- (a) persons shall be deemed to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....criticise any grant by the government is the legislature and not the courts" The grants given under Art. 282 are also known as discretionary grants, the reason being that the Centre is under no obligation to give these grants to any State; the Centre may give such a grant to one State and not to another, and the matter lies solely within the Centre's discretion. The use of the word 'may' in Art. 282 signifies the discretionary nature of these pants. Unlike the 'fiscal need' grants under Art. 275, these grants lie outside the purview of the Finance Commission. The technique for grants under Art. 282 is used for a number of purposes. There are programmes which fall within the State sphere for purposes of legislation and administration, but interested in their implementation. Therefore, in our view Scheme of "Jal Jeevan Mission Funding" is not a matter of Right for State or the implementing agency, and by no stretch of imagination, it can create right for benefit of vendors and suppliers of implementing Agencies., as claimed by the Applicant. d. Provisions of Article 282 of the Constitution of India- 283. Custody, etc. of Consolidated Funds, Conting....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Developmental schemes related to Constitutional functions. And these provisions of Finance Act, will override the provisions of the MJP Act, thereby making respective Governments, as persons liable to pay to the applicant. Hence a as per provisions of section 2 (93) of the GST Act, 2017 and, they shall be treated to be recipient of service. Therefore, any service provided to MJP under Jal Jeevan Mission whether before 01-01-2022 or after is in fact service provided to the Central Government and State Government 50% respectively, and exempted from tax as per exemption Entry No. 3 even after deletion of word "Government Authority7' from the said entry. a. Jurisdictional Officers submission-The Officer stated that all these arguments are not based on evidence submitted by the applicant nor any binding precedent is cited by the applicant. Lastly, these arguments are vague and against express provisions of the GST Law and the contract submitted by the applicant. 5.4.6 Findings, discussion & decision-The applicant did not produce any evidence in support of his argument, He did not show any part in Budget Speech or Finance Bill or Finance Act, where such liability to pay the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....adesh; whether the expenditure could be appropriated to the said Programme/scheme for which it was allocated and spending the amount in the aforesaid manner amounts to violating the provisions of the said Programme or not; whether a sum or Rs. 1 Crore should be given to a school, which otherwise enjoys robust financial health and on the other hand, the State of Punjab is unable to even release grant-in-aid to the aided schools situated in its own State because of which the teachers of this State are not able to get salaries for several months as alleged by the petitioner; whether the amount is sanctioned only because the respondent No.4 is the alumni of the said school and was invited to the valedictory function of 165th Foundation Celebration of the said School? 22. All these issues need to be debated by the Legislature and are to be left to its wisdom, adhering to the principles of separation of powers. Giving respect to the doctrine of separation of powers and realizing that judicial scrutiny of such expenditures is not permissible and leaving the matter to the Legislative wing of the State, we are left with no option but to dismiss the writ petition. In view o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... b. Decision- Property created under the Water supply schemes implemented by the MJP vests in MJP only, and not with the Government. Hence the argument being contrary to law is not accepted. 5.4.10 The work executed in this contract by the applicant are related to "Jal Jivan Mission" scheme launched by the Government of India, in 2019, to provide potable water is available to the last village and town through pipeline. It is further submitted that as per government resolution, 50% share of the expenditure incurred for the scheme is going to be is borne and shared by the central government and the remaining 50% by the state government. Hence it is submitted that both these Governments are liable to pay the applicant the consideration for services supplied by it to MJP & the Governments are recipient of supplies as per provisions of section 2 (93) the GST act. Therefore any service provided to MJP under Jal Jivan Mission whether before 01-01-2022 or after is in fact service provided to the Central Government and State Government 50% respectively, and exempted from tax as per exemption Entry No. 3 even after deletion of word "Government Authority" from the said entry. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and conditions of payment: The rates given in schedule of payments are including GST and statutory taxes. Payments will be made as per payment schedule stated in the Schedule of payment Appendix II. Any other payment shall be made after the conditions listed in the Schedule for such payment have been met, and the consultants have submitted an invoice to the MJP specifying the amount due. If there is delay in payment due to shortage of funds or any other reason no extra payment or Interest will be payable on account of delay of payment, however MJP will tried to release payment as early as possible from other sources of MJP by taking approval from competent authority. The Maharashtra Jeevan Pradhikaran shall make the payment of the Consultants periodically as given in schedule of payment above within Thirty days on receipt of invoice from the consultant after the receipt by the Maharashtra Jeevan Pradhikaran of bills with supporting documents. Only such portion of a monthly statement that is not satisfactorily supported may be withheld from payment. From the terms of tender documents and Contract signed by the applicant, no term provides that "The State Government....
X X X X Extracts X X X X
X X X X Extracts X X X X
....time, make grants and subventions to the Authority for the purposes of this Act, on such terms and conditions as the State Government may determine. 29. Loans to the Authority The State Government, from time to time, advance loans to the Authority on such terms and conditions, not inconsistent with the provisions of this Act, as the State Government and the Authority may agree upon. 33. Government as guarantor The State Government may guarantee the repayment of any loan and payment of interest on all or any of the loans given or transferred to the Authority for the purposes of this Act. 5.4.13 "Jal Jeevan Mission-Govt Resolution-Water Supply and Sanitation Department Government Decision No.: JJM-2019/Pra. Kra.No.138/PAPU-10 (07), G. T. Hospital Premises, New Ministry, Mumbai - 400 001 Dated: 04 September, 2020-which lays down guidelines for implementation of Jal Jeevan Mission in Maharashtra, through State. Loose translation is as under, Para 6-Organizational Mechanism for Jeevan Mission: Institutional mechanisms are being created as follows. Jal Jeevan Mission Guidelines dated 25.12.2019 by the Central Govt is a time bound p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ered as a society registered on 10-02-2010 under the Society Registration Act, I860. (ii) A commercial account has been opened in a Scheduled / Nationalized Bank through the State Water and Sanitation Mission and is being approved by the Government. (Emphasis supplied) (iii) The respective Governments have made available the Grants to MJP for Execution various Water Supply Schemes. Provision of Grant to MJP cannot be said to be payment made by the Central Government & State Government in ratio of 50% each are made by them directly to the applicant. From these facts and findings and aforesaid discussion, it is decided that, the Jal Jeevan Mission is implemented through SWSM, which is Society and has authority to undertake work, as per guidelines of the Jal Jeevan Mission. Authority and responsibility to Open Bank account. Both the Governments will transfer funds as grants in this account. Money is not directly going to be paid to the vendors/ contractors of SWSM, directly by respective Governments. Use of PFMS is binding. Hence it can not be said that the respective Governments are liable to pay to the vendors/contractors making supply to SWSM or MJP, as the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on & decision support system (DSS) for stakeholders. (ii) It is for Just-in-time Release of funds. It assists in complete monitoring of usage of funds including information on its ultimate utilization. (iii) The system is developed and maintained by O/o CGA, Dept, of Expenditure, Ministry of Finance, Government of India, New Delhi, o It is monitored by Prime Minister Office (PMO) regularly. Para 16.1- Release from Centre to State level implementing body.... The funds under SBMG will be released electronically by DDWS to the State Governments as per instructions issued by the Ministry of Finance from time to time. The State Governments shall release the funds to the SSBMG within 15 days of transfer of funds from DDWS along with matching State share. In case of advance State share is released by the State Governments, the same can be adjusted against the Centre share released in the subsequent year(s). Funds under SBMG will be released to the State / UTs only after the respective Government provides the undertaking that funds earmarked under 15th Finance Commission grants for sanitation activities are being devolved to rural local bodies. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncial management application, not Central or State Government, nor is it Bank account of either Government, (ii) Each Nodal Body either of Centre, State, District or the implementing agency will have to open their own Bank account, which shall not be changed during implementation of the scheme, (iii) Grants will be released by Centre and State just in time. Thus, it is clear that payment through PFMS is not payment by Government, but payment made by Implementing Agency (here either MJP or SWSM), out of the grants received by them from respective Governments. (Emphasis supplied) Last but not least- In Indian Banking system money is transferred from one account to another by way of NEFT, which is "National Electronic Fund Transfer (NEFT) is an online fund transfer system introduced by the Reserve Bank of India (RBI) in November 2005. This nationwide payment system ensures a safe and faster method of fund transfer between banks across the country. This fund transfer system operates on a deferred net settlement (DNS) basis, under which the amount will be settled in batches only at a particular point in time. To initiate a NEFT transfer, the Bank IFSC....
X X X X Extracts X X X X
X X X X Extracts X X X X
....here is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, one can only look fairly at the language used." (Emphasis supplied) 5.5 Supply of services where Time of supply is on or before 31-12-2021. 5.5.1 To decide applicability of the Exemption entry at Sr. No. 3 of the Notification No. 12/2017-Central tax (Rate) to the supplies during impugned period, following issues need to be decided. Table SL. No Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (percent.) 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 Government or Union territory or local authority ***(or a Governmental authority or a entity) 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. NIL NIL ***Sr. No. 3, in the entry in column (3), the words 'or a Governmental authority or a G....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cision on the issue From the agreement, it is clear that the applicant has provided "Technical Consultancy for Project Development and Management support services "for water supply scheme at various locations implemented by the MJP for supply of water, which are the function stated in article 243G & 243W. For sake of reference-relevant functions are reproduced as under, (a) ELEVENTH SCHEDULE (Article 243G) - Sr No. 3. Minor irrigation, water management and watershed development. & at Sr No 11. Drinking water. (b) TWELFTH SCHEDULE (Article 243W)- Sr No. 5. Water supply for domestic, industrial and commercial purposes & Sr No. 6. Public health, sanitation conservancy and solid waste management 5.5.5 Whether "the MJP" is "Governmental Authority" as required in entry number 3 & defined in definition 2 (zf) of the exemption notification. a. Submission of Applicant-It is submitted that the MJP is set up under "The Maharashtra Jeevan Authority Act, 1976"by Legislature of Maharashtra and hence it is Governmental Authority as defined in definition (zf) of the exemption notification. b. Submission of Jurisdictional Officer-Officer agreed with t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to the MJP for Jal Jeevan Mission, are in fact supplies to the Central Government, State Government for the aforesaid reasons. These arguments are found to be is not based on evidence, far-fetched and based on conjectures and surmises and very specious argument and hence rejected and are in fact supplies made to the MJP. 5.6.3 Jurisdictional Officers submission-However, measure shift in this condition has effected by notification number 16/2021 Central Tax (Rate) which has omitted the words "or a Government Authority or a Government Entity". Till Maharashtra Jeevan Pradhikaran was qualifying as Government entity, benefit of Entry number 3 was being extended to taxpayers. Now as from 01-01-2022 the words Government Entity has been omitted from entry number 3 of notification number 12/2017-Central Tax (Rate), Maharashtra Jeevan Pradhikaran does not get covered by the said entry and three conditions, as mentioned in above paragraphs, required to be satisfied to become eligible for availing benefit of the said entry are not getting full-filled from 01-01-2022. Hence activity of supply of services by applicant to Maharashtra Jeevan Pradhikaran is taxable from 01-01-2022. 5.6.4 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both," ***** Sub-section (20A) was omitted by the Finance Act, 2002 w.e.f. 01.04.2003. Deciding the applicability of exemption to the Appellant after deletion of subsection 10 (20A), Hon'ble Supreme Court held as under, "Para 53.....The following passage from Cape Brandy Syndicate v. IRC 1921 (1) KB 64 has been approved by the Apex Court in the decisions rendered by their Lordships. "in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, One can only look fairly at the language used." (Emphasis supplied) 54. We fully endorse the views taken by the High Court in the above two judgments. 55. Now, reverting back to Explanation to Section 10(20), these are entities which mean the local authority. The submission of the appellant is that the appellant is covered by Clause (ii) of the Explanation i.e. "Municipality as ref....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n No 12/2017-Central Tax (Rate), dated 28th June 2017. As the words "or a Government Authority or a Government Entity", are omitted from the aforesaid Entry at Sr. No. 3. 6. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the questions are answered thus - Question 1: What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran ('MJP') as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed & invoiced before 01.01.2022? Answer:- Nil, being exempted under Entry at Sr No. 3 of the Notification No. 12/2017-Central tax (Rate)-dated 28th June 2017. Question 2: What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran ('MJP') as a part of Jal Jeevan Mission which is a mission of Government of India which is performed & invoiced after 01.01.2022 but which is allotted before 01.01.2022? Answer: - Taxable at rate of 18% (at 9% under CGST & SGST Act, each), being co....