TaxTMI 
TaxTMI 
2025 (7) TMI 1388
X X X X Extracts X X X X
X X X X Extracts X X X X
....dvance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant is a provider of pure labour service to its client M/s. Webel Technology Limited (Hereinafter called as "WTL"), a State Govt. Company. That WTL received work order for providing manpower services from Newtown Kolkata Development Authority (Hereinafter called as "NKDA") for providing manpower regarding pure service. That NKDA is a local authority within the meaning of section 2(69) of the CGST Act, 2017 and entitled to exemption vide notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 as per the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce provided to Central Govt., State Govt., Panchayat etc. is exempted from payment of GST. Applicant is providing the above mentioned service to NKDA only on behalf of WTL. Thus, applicant feels that they are also eligible to avail the exemption too. 2.2 The applicant likes to refer to a recent ruling of Uttar Pradesh AAR as under- "In a recent ruling, the Lucknow Authority for Advance Ruling (AAR) has announced that the Detailed Project Report Service (DPR) and Project Management Consultancy services (PMCS) offered within the contracts of the State Urban Development Agency (SUDA) under Article 243G and 243W of the Indian Constitution, which are considered pure services, are exempted from Goods and Service Tax (GST). 2.3 In the context of the Pradhan Mantri Awas Yojana - Urban (PMAY-U), a prominent initiative of the Government of India, Rudrabhishek Enterprises Limited, the petitioner, was selected as an agency for the "Preparation of Detailed Project Report" and offering "Project Management Consultancy Service." Subsequently, an agreement was made between SUDA and the petitioner. Seeking clarity on whether the Project Development Service (Detailed Project Report Ser....
X X X X Extracts X X X X
X X X X Extracts X X X X
....labor services to Pradhan Mantri Awas Yojna (PMAY) even as sub-contractor. The fact and judgment are as under- M/s Sunrise Construction Company (Party A) entered into an agreement with Government of Rajasthan for construction of 270 flats under affordable housing scheme under Pradhan Mantri Awas Yojana (PMAY) which includes material and labour. Party "A' further sublets the work to M/s Banna Ram Choudhary (party B) to construct above 270 flats under a separate work contract which includes material and labour. Party B further entered in a sub-contract with party C (the petitioner) for "Pure labour Service" in said project. These labour services will be used for "Chunai and Plaster Work only" in the above-said project. The petitioner will have all the control over the labour and responsible for dues and other concerns. The AAR bench comprising of J.P Meera, Additional Commissioner and Hemanth Jain, Joint Commissioner delivered the ruling based on an application filed by M/s S.R.S Enterprises. The Authority observed that the services of pure labour contract supplied by way of construction, erection, commissioning, installation, completion, fitting out, repair, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....from the CEO, NKDA for supply of manpower and then WTL has placed back-to-back work orders to the applicant for carrying out the work of supply of manpower to NKDA. 4.4 The applicant's interpretations of law and/or facts are as under: • The NKDA is a local authority within the meaning of section 2(69) of the CGST Act, 2017 and entitled to exemption vide notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 as per the twelfth Schedule read with Article 243G/243W of the Constitution of India. As per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, any pure labour service provided to Central Govt., State Govt., Panchayat etc. is exempted from payment of GST. • The Applicant is providing the above mentioned pure labour service to NKDA only on behalf of WTL. Thus, the Applicant feels that he is also eligible to avail the exemption too. • The applicant has also referred to two advance rulings given by Uttar Pradesh and Chhattisgarh Authority for Advance Ruling. In the former case the authority gave the ruling that to qualify for the exemption [vide entry number 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngle is whether NKDA falls under the category of local authority as mentioned in entry number 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. Section 2(69) of the GST Act defines a local authority as below. "Local authority" means- (a) Panchayat as defined in clause (d) of article 243 of the Constitution; (b) a Municipality as defined in clause (e) of article 243P of the Constitution; (c) a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund; (d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006); (e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; (f) a Development Board constituted under article 371 [and article 371J] of the Constitution; or (g) a Regional Council constituted under article 371A of the Constitution. Section 2(69)(c) of the GST Act is similar to section 3(31) of the General Clauses Act, 1897, which defines a l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ipality under Art 243W of the Constitution. This apart, the State Government may transfer to NKDA in terms of section 17 of the NKDA Act such functions and duties relating to Government under any law which the State Legislature is competent to enact or which are otherwise within the executive power of the State. Section 35 of the NKDA Act allows the Applicant to levy a development charge on the owners or the occupiers of any land within its territorial jurisdiction for carrying out the activities referred to above. NKDA is, therefore, a statutory authority established to carry out the functions entrusted to a Municipality under Art 243W of the Constitution. lt is a body discharging municipal functions, although not a municipality as required to be constituted under Art 243Q of the Constitution and is fit to be included as 'other authority' under section 2(69) of the GST Act.' The WBAAR went on to observe that 'Section 3 of the NKDA Act provides that the members of NKDA, including the Chairman, shall be appointed by the State Government. lt sanctions and creates or reduces posts of officers under NKDA and, if it thinks necessary, may appoint its officers....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eceipt of payment from the customer (here the Chief Executive Officer, NKDA) of WTL. At this point we should look into some definitions of the GST Act which are relevant for the discussion. According to Section 2(93) of the CGST Act "recipient" of supply of goods or services or both, means- (a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied. Now we should look into the definitions of supplier and consideration under the GST Act. Section 2(105) of the CGST Act, 2017 has defined "supplier" in relation to any goods or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y no. 3 and 10 of Notification No. 12/2017-Central Tax (Rate) Dt. 28.06.2017 as amended. The applicant has referred to the ruling given by the Rajasthan Authority for Advance Ruling in case no. RAJ/AAR/2019-20/28. The issue before the authority was the supply of services by a sub-contractor falling in the Entry no. 10 of Notification No. 12/2017-Central Tax (Rate) Dt. 28.06.2017 as amended. The authority had correctly pointed out that the scope of the entry was not person-centric but it was project-centric. The Entry no. 10 exempts the service mentioned therein and here the recipient is of no significance. There is no reference to either the supplier or the recipient. This essentially means whosoever is supplying the services under this entry to any recipient, the service itself is exempted from GST so long as the supply pertains to beneficiary-led individual house construction or enhancement under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana. That is not the case with Entry no. 3 of Notification No. 12 - Central Tax (Rate) Dt. 28.06.2017 as amended. This entry has, inter alia, clear reference to the recipient/s of services mentioned therein. The recipien....