In re Nirma University (GST AAR Gujarat)
Q.1 Whether Nirma would be eligible for claiming benefit of the exemption for legal services as provided in Sr. No.45 of the Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017, as amended from time to time in respect of procurement of legal services?
From the applicant’s submission and the Nirma University Act, 2003, it is amply clear that the applicant is a private university set up with the objectives of teaching, research and training at the university, by an Act passed by the Gujarat State Legislature, in which Government is having zero percent participation by way of equity or control. Being the similar issue raised by the applicant concerning the legal interpretation as clarified in Circular No. 76/50/2018-GST dated 31st December, 2018, we can state that the applicant does not fall under the “governmental authority”, as defined under Section2(16) of the IGST Act, 2017. We, therefore, conclude that the condition of ‘with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under Article 243W of the Constitution’ would apply to both authorities whether set up by an Act of Parliament or a State Legislature; or established by any Government.
In view of the above, we hold that the applicant would not be eligible for claiming benefit of the exemption as provided in Sr. No.45 of the Notification No.12/2017-Central Tax (Rate) dated 26.06.2017, as amended from time to time, in respect of procurement of legal services (as a recipient).
Q.2- Whether services provided by Nirma are exempted under S. No. 4 of Notification No.12/2017-Central Tax (Rate)?
Only the services of higher education delivered as a part of curriculum by conducting degree courses by the applicant university, which leads grant of qualifications recognised by law, are entitled to avail exemption provided under Sl. No. 66 of the exemption Notification No.12/2017-Central Tax (Rate) dated 26.06.2017, as amended.
Q.3- Whether Nirma is required to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act?
CBEC vide aforesaid Circular clarified that the provisions of Section 51 of the CGST Act, are applicable to only such authority or board or any other body whether set up by an Act of Parliament or a State Legislature or established by any Government in which fifty one percent or more participation by way of equity or control, is with the Government. It is fact on record that the Nirma University is set up by the Nirma University Act passed by the Gujarat State Legislature, in which Government is having zero percent participation by way of equity or control. Hence, the applicant does not fall under this category of specified person for the purpose of Section 51 of the CGST Act, 2017.
In view of the above, we hold that the applicant is not liable to register themselves as a Deductor under GST.
