TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1526
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....istration Act, 1955, and is affiliated with the Indian Ex-Servicemen League. The KSESL is dedicated to the welfare of veteran soldiers who have retired early from the Armed Forces. The primary goal of KSESL is to assist them in finding suitable employment and ensuring a better retirement life. This objective is realized by arranging contract-based jobs for veteran soldiers with Central Government/State Government/undertakings, primarily within Kerala. The KSESL also plays a vital role in executing security contracts and managing payments for retired soldiers employed on a contract basis under the direction of the Directorate. 4.2. The applicant submits that they are functioning purely in a non-commercial manner and are neither authorized to carry out business activities nor to act as a commercial concern, as per its byelaws. The applicant states that the payment made to the ex-servicemen is subject to scrutiny by the Zila Sainik Welfare Office. The employment of ex-servicemen, who are members of KSESL, is based on the contract entered into between the applicant and the employer, subject to prior sanction from the Directorate. The applicant submits that the activities undertaken ....
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....ckdown period. 5. Comments of the Jurisdictional Officer The application was forwarded to the jurisdictional officer as per provisions of section 98(1) of the CGST Act. The Jurisdictional. officer has not submitted any remarks and hence it is presumed that the jurisdictional officer has no specific comments to offer. It is also construed that no proceedings are pending on the issue against the applicant. 6. Personal hearing The applicant was granted opportunity for personal hearing on 21-06-2024 and a rehearing was conducted on 20-06-2025 due to the change of Central and State members. Sri. Sangeeth Kumar, Chartered Accountant represented the applicant for personal hearing, which was conducted virtually. The representative reiterated the contentions made in the application and requested to issue the ruling on the basis of the submissions made in the application. 7. Discussion and conclusion. 7.1. On carefully reviewing the, advance ruling application, the statement of facts and the submissions made during the personal hearing, we have found that the questions for which the advance ruling is being sought fall within the scope of clause (e) of sub-section (2) of sec....
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....t deducted from the gross amount, and no tax was remitted to the government exchequer. 7.4. The applicability of GST on payments made by employers, awarders, or contractors to labourers as subsistence allowance during the COVID-19 lockdown depends on several factors, such as the nature of the payment and the relationship between the payer and recipient. During the nationwide lockdown, many such interim payments were extended to labourers to provide financial support amid the economic disruption. These payments could be interpreted as compensation, wage advances, or simply welfare support. If the payment is classified as a pure grant or ex gratia assistance, it would fall outside the scope of GST, as it does not qualify as a supply of goods or services. However, if the payment is tied to the employment relationship, such as wage advances, it may be treated as consideration for a taxable supply and therefore subject to GST. 7.5. To better understand the matter, it is important to examine the concept of Manpower Recruitment Services, as it is directly relevant to this case. Manpower Recruitment Services refers to the service provided by agencies or organizations that supply manp....
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.... workers, it does not impact the applicability of GST on the services provided. 7.8. On the effect of the Department of Expenditure OMs (23.03.2020 and 20.05.2020): The Ministry of Finance, Department of Expenditure, vide OM F.No.23(4)/E.Coord/2020/1 dated 23.03.2020, directed that where any contractual, casual and outsourced staff "is required to stay at home in view of lockdown order regarding COVID-19 prevention, they shall be treated as "on duty" during such period of absence and necessary pay/wages would be paid accordingly," and made this applicable to Attached/Subordinate Offices and Autonomous/Statutory Bodies. Subsequently, by OM dated 20.05.2020, the Department expressly extended the validity of the 23.03.2020 directions up to 31.05.2020, reiterating that, as a measure to avoid undue hardship, such staff "shall be treated as "on duty" .. and necessary pay/wages would be paid accordingly". These OMs do not conceive the payments as ex gratia or damages/compensation for non-performance; rather, they deem the period as "on duty" and mandate payment under the subsisting contract of engagement. Consequently, amounts released by VSSC to the applicant for disbursal to the outs....