TaxTMI 
TaxTMI 
2025 (6) TMI 918
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of pure labour services. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 1. FACTS AND CONTENTION - AS PER THE APPLICANT: 1.1. Assisting Municipal Corporation and municipal council for providing the property survey, numbering of properties, measurements and data collection. To evaluate the property taxation as per act. 1.2. Assisting Municipal Corporation and councils for computerization of property taxation data along with computerization of plans and linking photos of the properties and data along with computerization of plans and linking of the properties. 1.3. Assisting municipal councils and corporation for providing GIS-based mapping technology, techniques and drone image capturing services along with GIS based data management system and for logical....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding Old data and Documents available with Government Authority are provided to the company, # ↓ Assisting municipal councils and corporation for providing conduct survey and allot the new numbers for old as well as new properties as per ward/ prabhag boundaries as directed by the Government Authority(r) ↓ The company shall note any changes in the Name of Occupier, Floor wise gradation of property, prepare the single line site plan showing all room sizes, floor, toilets, staircase, sign of owner, etc. of all properties. ## ↓ The fresh data collected by the company shall be used for correction and computerization of updated site plan. ↓ Assisting municipal councils and corporation for providing in preparation of GIS based tax zone map for tax assessment as directed by Chief Officer, preparation of database for assessment of taxes, submission of draft assessment list and case papers to Government Authority for verification and correction of mistakes. ↓ Assisting municipal councils and corporation for providing Property case papers, primary tax assessment list, providing individual notices of taxes, 2% Spot inspection and correcti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or such agency arrangements.] 1.5. To arrive at a decision as to whether the nature of services provided by the applicant falls under 12th Schedule of Article 243 W of the Indian Constitution, we iterate the following :- Article 243W Powers, authority and responsibilities of Municipalities, etc. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to I. the preparation of plans for economic development and social justice; II. the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters lis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r in relation to any function entrusted to a Municipality under article 243W of the Constitution. The Company is engaged in the following activities of the Twelfth Schedule: a) Urban planning including town planning. b) Regulation of land-use and construction of buildings. 1.6. Following are the dictionary meanings of the above phrases: - As per Encyclopaedia The term urban planning refers to the attempt to control the character and location of housing, industry, and recreational developments according to a preconceived pattern or design. Such designs are thought necessary in the context of urban development because of the externalities or third-party effects associated with the close contiguity of urban life. In densely populated areas, for example, the location of major industrial developments close to the places in which people live may result in objectionable pollution. Urban planning is considered necessary to ensure the appropriate separation of different land uses in order to improve the quality of urban life. As per Oxford Dictionary The term urban planning refers to the planning and regulation of building, develop....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers aforesaid. f. Use and development of land After coming into operation of any development plan or development scheme in an area, no person shall use or permit any other person to use any land or carry out any development in that area. g. Prohibition of development: According to the provision of this act no development or change of use of any land shall be undertaken or carried out in that area without obtaining permission in writing or a certificate from the planning and development authority certifying that the development charges as leviable. Under this Act has been paid or that no such developmental charge are leviable. h. Permission of development Any person or body intending to carry out any development on any land shall make an application in writing to the planning and development authority for permission. Authorities may grant permission or pass order either with some certain condition or without imposing any condition or they can refuse permission 1.9. Land Pooling Scheme: The planning and development authority should prepare one or more land pooling scheme for any part of area within its jurisdiction for the purpose of implemen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Planning Act, 1966 is Prohibition of development without obtaining permission from planning and development authority. The circular relating to the legal actions to be taken by Municipal Corporation and council and Town Planning Commission is attached with other documents. 1.13 The company has relied upon the Advance Ruling judgment in case of M/s Sewerage & Infrastructural Development Corporation of Goa Ltd., Ref-GOA/GAAR/10 of 20L8-19/1,737, inter alia wherein the applicant was engaged in the activity of project planning, project management, survey, studies and investigations related to sewerage projects in the state of Goa. Since the above activity was listed in the 12th Schedule to Article 243W of the Indian Constitution, the same was held exempted as per SI. No. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017. 1.14 Further, there were another Advance Ruling judgment in case of CORE PROJECT ENGINEERS & CONSULTANTS PRIVATE LIMITED Ref-ST-ARA-32/2019-20/B-35, Mumbai, dated 17.03.2020, inter alia wherein the applicant was engaged in the activity of town planning, Urban planning. Since the above activity was listed in the 12th Schedule to Articl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ations to levy property taxes. Specifically, Clause 2(49) (a) enumerates "tax on buildings or lands" as a compulsory levy. Furthermore, Chapter VIII, Rule 20 delineates the procedures for property assessment, underscoring the necessity of comprehensive property surveys to ensure accurate tax imposition. C. GST Exemption Notification: No. 12/2017-Central Tax (Rate), Dated 28th June 2017, Entry 3. The aforementioned notification provides GST exemption for "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 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." Given that our services are pure services directly related to functions entrusted to Municipalities under Article 243W, they qualify for this exemption. 2.1.2 Supporting Opinions and Assurances A. Chartered Accountant's Opinion Commissioned by Pimpri Chinchwad Municipal Corporatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... with the GST exemption provisions applicable to municipal functions under: • Article 243W of the Constitution of India • Notification No. 12/2017-Central Tax (Rate), Entry 3 • Relevant judicial precedents 2.2.1 Nature of Services Provided - Compliance with Exemption Criteria Our engagement with municipal corporations and councils strictly pertains to: • Property survey and tax assessment as per municipal governance mandates. • Professional consultancy services supporting municipal bodies in fulfilling their statutory obligations under: • The Maharashtra Municipal Corporation Act • The Maharashtra Municipal Council Act • No transfer of goods or materials - The contract does not involve the supply of any equipment, software, or tangible goods. These services fall within the scope of 'Pure Services', rendering them eligible for GST exemption under Notification No. 12/2017-Central Tax (Rate), Entry 3, which specifically exempts services provided to local authorities for functions listed under Article 243W. 2.2.2 Judicial Precedents Supporting GST Exemption ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heir function under Article 243W. BSES Rajdhani Power Ltd. & Anr. vs. North Delhi Municipal Corporation Delhi High Court 5th August 2023 GST not applicable on pure services fulfilling municipal obligations under Article 243W. 2.2.3 Clarification on Misinterpretation of 'Technical Instrumentation' During the hearing, the department assumed that our work involves technical and highly specialized instruments, leading to a misinterpretation of the nature of our services. We clarify that: • No high-end technical equipment (Total Stations, LiDAR, Drones, GIS mapping tools, etc.) is provided under the contract. • Only basic conventional tools such as measuring tapes, rulers, and surveyor scales are used for on-ground tax assessment. • Aerial images from government agencies (MRSAC/NRSA) are used only as reference data to cross-verify survey findings. • The actual tax assessment is conducted manually through trained professionals per municipal laws. • The assertion that technical instruments are being 'supplied' as part of our service is factually incorrect and does not affect the eligibility ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fied time and period and specific objects only. Hence it is not feasible to employ manpower of such quality and qualifications on regular basis for providing employment through employment agencies like State Public Service Commission, it would be regular burden on this institutes. 3.3 It is not feasible and required to procure high quality instruments of latest technology which are to be used for specified period only. It has high burden of costs which may not be recurrently used. 3.4 For this purpose Local Self Government Institute has floated tender for requirements of skilled manpower services with latest instruments. Tax payer has a view that the mandatory services which Self Local Government Institutes has to provide under the obligation of Constitution to the its citizens or to the people staying in there vicinities and the services like providing Clean water supply, Electrification of street Light, Sewage of Drainage, Primary Education facilities, Primary or Secondary Health services etc. are normally covered under the duties and responsibilities of this Local Self Government to provide to the people as per the Constitution obligation written down under the article 243....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the applicant as well as the jurisdictional officer. 5.1 Sthapatya Consultants (India) Private Limited was incorporated under Companies Act, 1956 as a Private Limited Company. Applicant has submitted Agreement of Contract along with work order of following Municipal Councils- 1. Chalisgaon Municipal Council. 2. Akluj Municipal Council. 3. Pandharpur Municipal Council. 4. Wai Municipal Council. 5.2 Relevant part of these agreements is reproduced below in order to understand intent and nature of the work assigned to the applicant by these municipal councils. Whereas the First Party had invited tenders for the work of assisting Municipal Council for Door to door Numbering, Property Survey, Preparing Computerized proportionate plans, photos, required information of the properties for assessment of property tax and other allied taxes, and computerization of the work, as per tender scope of work etc. and as the tender of the Second Party's being qualified and Negotiated offer, and tender of the Second Party being accepted by the Tax Inspector and administrative standing committee as per sanction Subject No.164 and date 09/06/2022. It....
X X X X Extracts X X X X
X X X X Extracts X X X X
....50;िनी न इमारती) नगरपरिषद् निर्देशित कर आकारणों वार्ड रचनेप्रमाणे नंबरींग करणे, स्थळ सर्व्हेक्षण करून करयोग्यमुल्य पद्धतीने आकारणी करणेकरिता आवश्यक माहिती संकलित करणेकारिता नगरपरिषदेस सहकार्य करणे, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....54;ी काणे करीता अॅन्डरॉईड मोबाईल आज्ञावली पुरविणे" 5.4 On analysis of the agreement and the work orders given to the applicant, it is seen that the work is mainly for assisting and facilitation of property tax assessment. For this, the applicant undertakes property survey, numbering of properties, measurement and data collection digitalization of data etc. As per the agreements with various Municipal Councils, activities being undertaken by the company are assisting Municipal Councils for door to door Numbering, Property Survey, Preparing Computerized proportionate plans, photos, required information of the properties for assessment of property tax and other allied taxes. 5.5 Applicant's main query is whether in view of the submissions made, the services supplied by them would be covered under Clause 1 & 2 of Twelfth schedule of Article 243W? and thus exempt under Entry No. 3 of Notification no. 12/2017-Central Tax (Rate) dated 28.06.20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s provided should be 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. The applicant has contended that the services provides to the Municipal Councils in relation to the activities falling under 12th Schedule of Article 243W of the Indian Constitution. The said provisions are as under: The functions entrusted to a municipality under Article 243W are as under :- 243W. Powers, authority and responsibilities of Municipalities, etc. Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to (1) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Maharashtra Municipal Act, 1949 u/s. 99, mandates Municipal Corporations to levy property taxes. Specifically, clause 2 (49) (a) enumerates "tax on building or lands" as a compulsory levy. The applicant submits that Chapter VII, Rule 20 delineates the procedure for property assessment, underscoring the necessity of comprehensive property survey to ensure accurate tax imposition. The applicant has provided services for meeting this end. The function of levy of properly tax may be mandatory and necessary for the functioning of the Municipal Councils. However, it is not listed as one of the functions in the twelfth Schedule of Article 243W of the Constitution. All the services provided by the applicant are for facilitation of levy of properly tax using the appropriate technology and process. It is in no way related to urban planning including town planning or planning of land use and construction of building. Even some of the agreements with the applicants have been signed by the tax Inspector of the Municipal Councils. The terms of the agreement and the work order indicate that the scope of work and intent of procurement of services is for facilitation and assessment of property t....