TaxTMI 
TaxTMI 
2024 (8) TMI 1376
X X X X Extracts X X X X
X X X X Extracts X X X X
....y 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1.5 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. 1.6 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 exigibility 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 to officially clarify the rate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....STL 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, irrigation & sewage management. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vernment. 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. 2.2.3 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 because the MJP in the instant ca....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... are managed by the Central Government as a mission. In such circumstances, it must beheld 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 delegate the same to any....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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." As within the realm of panchaya....
X X X X Extracts X X X X
X X X X Extracts X X X X
....overnment 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 through Public Financ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een 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 stakeholders 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 MIP 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sent application has been 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 legal 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. Simila....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pted within the meaning of notification no 12/ 2017 entry g 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. CONTENTION -AS PER THE CONCERNED OFFICER: 3.1. Before adverting to the Arguments in reply, the facts of the case are briefly canvassed by the Revenue: - a. The Applicant is an engineering consultant, it, among others, is providing engineering consultancy services to Maharashtra Jeevan Pradhikaran ('MJP') a governmental corporation for the execution of Jal Jeevan Mission Scheme. b. The Applicant, up until, 1.1.2022 was claiming exemption from payment of GST under Sr. No. 3 of notification 12/2017-GST claiming that it is providing pure services to a government authority for a purpose covered under 243 G/W of the Indian Constitution. c. By Notification 16/2021 dated 18.112021 the words "governmental authority or entity" were omitted from the said notification thereby attracting tax liability on the services provided by the applicant to MJP. d. Thus, in order to continue claiming exemption the Applicant has filed this ARA. 3.2. ARGUMENTS-IN-REPLY 3.4.1. A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rity to do every lawful thing necessary for the purpose, or usually done in the course, of conducting such business." Thus, the extent of agency is limited to carrying out the means or a mode of doing an act & not to decide the very act itself. Actions of MJP in fixing the technical qualifications necessary for being eligible in the tender process, to enter into an agreement with applicant confirming his empanelment & eligibility, to enter into contractual negotiations for fixing consideration are much too broad & decisive to be narrowly circumscribed by the trappings of an agency. It is trite law that the words of a notification have to be strictly construed & any ambiguity has to be construed in favour of the revenue. Since, the words government authority or entity have been removed, tax is undisputedly attracted. 3.3. In light of the above submissions, it is prayed that: - a. For works allotted, performed & invoiced before 01.01.2022, it may be held that the supplies made to MJP constitute an exempt supply & MJP is a government authority or entity within the meaning of Notification 12-2017 CT as it then stood. b. For works allotted, performed & invoice....
X X X X Extracts X X X X
X X X X Extracts X X X X
....one year. (Emphasis supplied) (c.) Para 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. (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 I Consultant for Konkan Region in conformity with the provision of the Agreement. (Emphasis supplied). Para no. 1 of the agreement the MJP desires that certain services should be performed by the consultant, namely "project management service consultants for Aurangabad water supply project" 5.1.5. Important relevant clauses of the Tender document -e. Tender No 2022-23 are as under, (a) Page 57 - 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 bet....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vices for water supplies scheme". Total value of the invoice amount is Rs. 31,32,829/- No GST is shown separately. "GST implication mentioned on bill- Services provided against this invoice are exempted in GST under article 243W of function entrusted to municipality twelfth schedule point no. 12/2017." 5.1.7. The applicant has submitted payment receipt Advice with its application. The payment receipt advise is actually "PFMS generated DSC transaction payment advice report". Agency name stated in the advice is Jala Jeevan mission Maharashtra, Escrow account - (MHND 00010898) debit Bank HDFC BANK LTD, approval date in PE-MS is 31st Oct 2023 amount Rs. Beneficiary name FORTRESS INFRACON LIMITED AND YASH INNOVATIVE SOLUTIONS LLP (JV). 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed at Sr No 21 in the Notification No 11/2017-CentraI Tax (Rate)- dated 28th June 2017 and are taxable at rate of 18% (9% CGST & SGST each), wherever exemption is not applicable. 5.3.2 Submission of the Jurisdictional Officer is as under - The Applicant is an engineering consultant, it, among others, is providing engineering consultancy services to Maharashtra Jeevan Pradhikaran ('MJP') a governmental corporation for the execution of Jal Jeevan Mission Scheme. The Applicant, up until, 1.1.2022 was claiming exemption from payment of GST under Sr. No. 3 of notification 12/2017-GST as is providing pure services to a government authority for a purpose covered under 243 G/W of the Indian Constitution. 5.3.3 Findings, observations and 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), ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....porate owned by Government is entrusted with the function, the activities of the said body corporate have to be construed as an agent of the respective Government. For all the above reasons. the applicant prays that it be held that despite the deletion Of words Government Authority/ 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 Submission of the Jurisdictional Officer is as under - The Officer stated that it is trite law that the words of a notification have to be strictly construed & any ambiguity has to be construed in favour of the revenue. Since, the words government authority or entity have been removed, tax is undisputedly attracted. 5.4.3 Findings, observation and decision - 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 is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....021 between the Maharashtra Jeevan Pradhikaran (MJP) having its registered office at 4th Floor, Express Towers, Ramnath Goenka Marg, Nariman Point, Mumbai Maharashtra 400021. (Hereinafter called "the MJP" which expression shall means and includes its successor or succession and permitted assigns) of the one 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 MIP 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 Consultant for Pune Region in conformity with the provision of the Agreement. (Emphasis supplied). c. 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 i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ants to the States for any specific public purpose. The attitude of the courts is not to interfere this matter and leave it to the judgment of the Central Government. The proper place to 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 suppl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....I of the GST Act. as aforesaid. For purpose of GST, these are distinct Persons. 5.4.5 Financial Bill- after its passage thereof in parliament- The respective Governments become liable to pay for the 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 Authority" from the said entry, a. Submission of the Jurisdictional Officer is as under - The Officer stated that it is trite law that the words of a notification have to be strictly construed & any ambiguity has to be construed in favour of the revenue. Since, the words government authority or entity have been removed, tax is undisputedly attracted. 5.4.6 F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xpenditure is justified and can be treated as in 'public interest' or not; whether it serves any public interest to give donation of Rs. 1 Crore to the school, which is not located in the State of Punjab, but in Himachal Pradesh; 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 p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oceedings with respect to the matters referred to above instituted or to be instituted or defended by or against the State Government before the appointed date may be continued, or instituted, or defended by or against tile Authority. 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 proviso ns of section 2 (93) the GST act. Therefore any service provided to MJP under Jal Jivan Mission whether before 01-01-2022 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the Schedule of payment Appendix Il. 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 of Maharashtra" is liable for payment to the applicant. The applicant did not produce any document is support of his contention that Government of Maharashtra" i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oans 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 - 400001 Dated: 04 September, 2020-which lays down guidelines for implementation of Jal Jeevan Mission in Maharashtra, 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 programme. A strong four-tier organizational structure has been created to achieve the objectives within the prescribed time frame. It is the State Water and Sanitation Mi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 case may be. 5.4.15 Payment received through PFMS, proves that both the Central Governments have paid to applicant for the services supp....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 tin 2. 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. The States/UTs will operate a single savings bank account in any Scheduled Commercial Bank (except foreign banks) or a bank authorized by the State Government for receipt of SBMG funds and all transactions relating to SBMG including Central share. State share. or any other receipt. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng 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- 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 Code is a must, along with other details such as bank account number, bank branch and account holder name, among other details. PFMS is similar to NEFT, but PFMS has other documentation, payment processing accounting, auditing facility and movement of funds just in time facilitie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 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 @vernment Entity' omitted by Notification No. 16/2021- Central Tax (Rate) dated 18-112021 (W.e.f. 01 January 2022). 2. Definitions. - For the purposes of this notification, unless the context otherwise requires, [(zf) "Government Authority" means an aut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ply 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 the Jurisdictional Officer is as under - Officer agreed with the applicant. c. FINDING OBSERVATIONS AND DISCUSSION Definition clause 2 (zf) of the notification is defines- [(zf) "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
.... very specious argument and hence rejected and are in fact supplies made to the MJP. 5.6-3 Submission of the Jurisdictional Officer is as under - The fact of the words "a government authority or entity" having been omitted, unfailingly attract tax liability. Without prejudice to the aforesaid submission, although the applicant claims that MIP is working as an agent of the Central/State Government for the execution of the Jal Jeevan Scheme, it is MJP & not the Government that has issued the tender, empanelled the applicant, allotted work to the applicant. Section 188 of the Indian Contract Act delineates the scope of an agent's authority: - "188. Extent of agent's authority. -An agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act. An agent having an authority to carry on a business, has authority to do every lawful thing necessary for the purpose, or usually done in the course, of conducting such business.'" Thus, the extent of agency is limited to carrying out the means or a mode of doing an act & not to decide the very act itself. Actions of MJP in fixing the technical qualifications necessary....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of article 243P of the Constitution; (iii) Municipal Committee and District Board, legally entitled to, or entrusted by the Government with, the control or management of a Municipal or local fund,' or (iv) Cantonment Board as defined in section 3 of the Cantonments Act, 1924 (2 of 1924);]. ** Explanation was inserted by the Finance Act, 2002 w.e.f. 01.04.2003 *** *(204) any income of an authority constituted in India by or under any law enacted either for the purpose of dealing with and 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... burden of proof to substantiate his claim of exemption. 5.6.5 Final decision on Supply of services where Time of supply is on or after 01-01-2022. After Considering all the aforesaid facts, provisions of Law, issues and decision therein, we have no hesitation in holding the "Technical Consultancy for Project Development and Management support services", provided by the applicant to the MJP for its Water supply schemes where time of supply is on or after 01-01-2022, are not covered by the entry at Sr No. 3 of the Notification 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....