TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 223
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....overnment Authority in terms of the explanation in Para 2(zfa) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017? c. If the Service provided are pure services? d. If the answer to the above questions are in affirmative, whether the services provided by the applicant are entitled to the exemption notified at Sl. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and similar matching Notification issued by the state Government under Section 11 of the State Act. 1.1 At the outset, we would like to make it clear that the provisions of both the CGST Act and the OGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the OGST Act. 2.0 Submission of the Applicant: 2.1 M/s. Odisha State Medical Corporation Limited [here-in-after referred to as "the Company/Applicant"] has been incorporated under the Companies Act, 1956 with full equity participation by the Government of Odisha. The applicant has been formed in pursuance to Government of Odisha, Department of Health and Family welfare GR No. 8....
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....ive suppliers strictly as per the authorization in the Government Resolution. 2.6 The applicant thus, renders the mandated service as a package comprising tendering, selecting vendors, receiving supplies, causing quality testing, warehousing at the pre-designed location, distribution of drugs to all Health Facilities and management of inventory, indents and inventory. For efficient service delivery, the applicant makes use of some software i.e. "E-Nirmalya" & "E-Upakaran". 2.7 As evident from the Annual Financial Statement, the main expenses comprise salary and other establishment expenses, tendering expense, testing expense, storage and handling expenses and freight charges thus, implying that, there is no purchase of any goods for eventual supply to the Government for supplying the mandated service of procuring and distributing medicines to the health care facilities free of cost and procuring, installing as well as maintaining the medical equipment at different Health facilities. The services so supplied are pure service only integrally connected with the targeted improvement in the status of public health. The services being pure service supplied health department of the Gove....
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....al Tax (Rate) dated 28.06.2017. As submitted above, the corporation is a wholly owned State Government Company to provide medicine procurement services to State Government and accordingly, the applicant acts the procurement agency of the State for procurement and distribution of medicines including surgical goods and performs no other activity. Also, it doesn't supply any service or goods to any other person. Thus, the applicant, by performing the activities exclusively assigned by the State Government very well qualifies as a Government Entity as well. 3.2 The ruling being sought on the applicability of SI. No. 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and matching Notification issued by the State Government under Section 11 of Odisha Goods & Service Act. The applicant hence asked the following questions: a. Whether the applicant Corporation is a Government Authority in terms of the explanation in Para 2(zf) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017? b. Whether the applicant Corporation is a Government Authority in terms of the explanation in Para 2(zfa) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017? c. If ....
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.... qualified for Government Authority or Government Entity as per Para 2(zf) & 2(zfa) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. b. Whether the supply made by the applicant would amount to pure service? c. Whether the supply made by the applicant against which consideration has been received for whatever reason (i.e. Service Charge etc) would qualify the activities 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. 6.3 Before deciding the above issues, it is pertinent to understand the business model of the applicant corporation. M/s. OSMCL was set up by Department of Health and Family Welfare, Government of Odisha under Resolution No. Sch-1-Med-264/13(Pt)/8844 datd 26.06.2013 with an authorized equity share capital of Rs. 20 Crore (Twenty Crore) for implementation of "Free Medicine Distribution Scheme" having primary objectives is to provide essential medicines to all visiting Government health facilities for timely and appropriate health care with an objective to improve overall health status of the state including: ....
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.... (i) set up by an Act of Parliament or State Legislature; or (ii) established by any Government, with 90per cent. or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority.". The applicant in the subject case has been established by Government of Odisha Resolution No. Sch-1-Med-264/13(Pt)/8844 dated 26.06.2013 with full equity participation. From the definition of Government Entity, it appears that, the Applicant will be treated as Government Entity as the word corporation has been clearly mentioned in the inclusive definition and it satisfies following condition: a. It was established by the Government of Odisha vide Resolution No. Sch-1-Med-264/13(Pt)/8844 dated 26.06.2013. b. It holds 100% equity control. c. It carries out the following function entrusted by the Government of Odisha (Ref: Sl.No. 3 of the above resolution): -Procurement of quality medicines, surgical and EIF (Equipment, Instrument and Furniture) centrally through a fair competitive tendering process. -Managing central drug warehouses to ensure smooth supply of medicines to the health facilit....
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....he incorporation of Company B. Other than its service fees, A also recovers from B, registration fee and approval fee for the name of the company paid to the Registrar of Companies. The fees charged by the Registrar of Companies for the registration and approval of the name are compulsorily levied on B. A is merely acting as a pure agent in the payment of those fees. Therefore, A's recovery of such expenses is a disbursement and not part of the value of supply made by A to B. From the above explanation, we observe that, the applicant to be qualified for pure agent, the above condition needs to be fulfilled. However, the applicant in the present case has not fulfilled the clause(d) of the above explanation, as they have received procurement value along with service charge altogether while raising utilization certificate to their service recipient (Government of Odisha in this case). Hence, in view of above observation, we are in the opinion that, the supply made by the applicant would not amount to pure service. The applicant also cites Ruling of Appellate Authority of Advance Ruling for the state of Andhra Pradesh in the matter of M/s. Andhra Pradesh Medical Service and Infrastru....