AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 1671
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....harashtra Authority for Advance Ruling (hereinafter referred to as "MAAR"). BRIEF FACTS OF THE CASE 3.1 The Appellant is unregistered, and is engaged in providing the services of renting out of immovable property, situated at Nashik, and is in the receipt of rental income. 3.2 The Appellant is one of the co-owners of the immovable property, which are jointly owned by five individuals. All the five co-owners, including the Appellant, hold proportionate share in the property vide three separate agreements. The property is let out to Social Welfare Department ("Samaj Kalyan Vibhag"), Nashik Division of Maharashtra Government. 3.3 The service is being provided from 3-6-2019 for 36 months, and the Appellant is receiving fix rent of Rs. 1,62,073/-. The details of the properties and the co-owners along with their rental income is tabulated hereinunder: Sl. No. Particulars Agreement 1 Agreement 2 Agreement 3 1 Property name and address Plot no. 4, 5 & 6. S.No. 279/1/10/2/2 Durga Nagar, Panchwati Nashik. Plot no. 3,4 & 5. S.No. 279/1/10/2/2 Durga Nagar, Panchwati Nashik. Plot no. 2 & 3. S.No. 279/1/10/2/2 Durga Nagar, Panchwati Nashik. 2 Numbe....
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....e Department is not exempt from GST and TDS provisions will be applicable in this case. In respect of Question no. (d), it has been held by MAAR that question pertained to entitlement of refund which is not covered under the Advance Ruling Provisions contained under section 97 of the CGST Act, 2017, therefore, has refrained from answering this particular question. GROUNDS OF APPEAL 5. Aggrieved by the aforesaid Advance Ruling Order dated 2-11-2021 passed by the MAAR, the Appellant has filed the present appeal, inter alia, on the following grounds: 5.1 GST TDS is not applicable when payment is made to an unregistered person as stated under section 51 of the CGST Act, 2017- 5.2 The case under consideration is covered under section 51 of CGST Act, 2017, that is, Tax Deducted at Source, by the Government. Section 51(1) of the CGST Act, the expression "TDS" includes- Notwithstanding anything to the contrary contained in this Act, the Government may mandate, - (a) a department or establishment of the Central Government or State Government; or (b) local authority; or (c) Governmental agencies; or (d) such persons or category of pers....
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....ply 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. Nil Nil 5.8 It can be observed that there are three conditions to satisfy for the exemption: (a) Service provided should be a 'pure service; (b) Service should be provided, inter alia, to State Government; (c) Service provided should be 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 243 W of the Constitution; 5.9 In this regard, the services provided are renting of immovable property services, and thus, it's a pure service (as no specific goods are supplied). Further, the services are given to Social Justice and Special Assistance Department, Government of Maharashtra. 5.10 The MAAR in its order has observed as under: "the Applicant has sub....
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....ject 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 provision 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 listed in the Twelfth Schedule." In this regard, Twelfth Schedule of Constitution of India provides as under: "TWELFTH SCHEDULE (Article 243W)" "1.... 3. Planning for economic and social development ...... 9. Safeguarding the interest of weaker sections of society, including hand....
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....y. The property is let out to Social Welfare Department, Nashik Division (hereinafter the central authority). Total rental received exceeds the threshold limit provided under section 22(1) of the GST Act, but the share of each of the five co-owners does not exceed the said threshold limit. 5.19 As regards to the above submissions, the MAAR took the contention that the Appellant has not made any detailed submission stating actual percentage of the owner/co-owners in the said property. However, the Appellant has submitted the Agreements of co-ownership of the said immovable property before the MAAR. Agreement provides the details of actual percentage of ownership/co-ownership in the said property. 5.20 The Appellant also submits that each of the co-owners receives the rental income proportionate to their share in the immovable property and the income tax authority assessees him separately on the income so received. Merely because several persons jointly own an immovable property, they cannot be treated as 'an association of persons' or 'a body of individuals'. It is observed that the similar view is taken in the case of M/s. SRI RABI SANKAR TAH [2019-TIOL-418-AA....
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....are being rented out to the Social Welfare Department for the accommodation of the girls belonging to the backward classes/Scheduled Tribes against which they are receiving certain amount of money as per the Agreement entered with the Social Welfare Department of Maharashtra Government. 7.3 It was further contended by the Appellant before the Maharashtra AAR that the aforesaid activities of renting out of immovable property to the Social Welfare Department, for accommodation of the girls belonging to the backward classes/Scheduled Tribes, will be covered by the entry at Sl. No. 3 of the Exemption Notification No. 12/2017-C.T. (Rate), dated 28-6-2017 as the Appellants are providing the subject services to the Maharashtra State Government and the same are in relation to the functions entrusted upon the panchayats under article 243G of the Constitution, or upon the municipalities under article 243 W of the Constitution. It was further argued that since Eleventh Schedule mentioned under article 243G of the Constitution and Twelfth Schedule mentioned under article 243 W of the Constitution inter alia enumerate the functions related to the "welfare of weaker sections, and of scheduled....
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....specified therein, with respect to: (a) the preparation of plans for economic development and social justice; (b) the implementation of schemes for economic development and social justice as maybe entrusted to them including those in relation to the matters listed in the Eleventh Schedule." In this regard, relevant entry of the Eleventh Schedule of the Indian Constitution are enumerated as under: ELEVENTH SCHEDULE (Article 243G of the Indian Constitution) 1.... 25. Women and Child development 26. Social welfare, including welfare of handicapped and mentally retarded. 27. Welfare of weaker sections, and of scheduled castes and the scheduled tribes. 28......" Further, article 243W of the Constitution of India provides as below: "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 ....
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.... 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 11. On perusal of the aforesaid entry, it is seen that the legislature has used the expression "any" before the term "activity", and the term "function", which has got a very wide connotation. Further, the expansion expression "in relation to" present in the entry before the expression "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" imparts very wide coverage to the expression "function". Thus, it can be safely interpreted that the aforesaid entry has a very wide connotation and coverage. Since, it has been established hereinabove that the activities related to residential accommodation of the girls or women, belonging to the Backward Class/Scheduled Tribes, will definitely come under the ambit of the responsibilities/functions entrusted to panchayats and municipalities, therefore, it can be safely concluded that in the instant case, pure services, i.e., renting out of immovabl....