Case Law Details
In re Gujarat Industrial Development Corporation (GST AAR Gujarat)
As per the submission of the applicant, Gujarat Industrial Development Corporation (GIDC) was established under the provisions of Gujarat Industrial Development Act, 1962 by the State Government of Gujarat for the purpose of securing orderly establishment and organisation of industries in industrial areas and industrial estates in the State of Gujarat and establishing commercial centres in connection with the establishment and organisation of such industries and the GID Act and Gujarat Industrial Development Rules, 1962 govern the functioning of the Applicant. However, on going through the aforementioned list of functions entrusted to the municipality, we find that none of the entries pertain to the establishment or development of industries. As per the submission of the applicant, the activity carried out by them pertains to planning for economic development. It is observed that Sr.No.3 of the list states ‘Planning for economic and social development’. However, on going through the said entry, we find that it cannot be construed to pertain to establishment, development or organisation of industries since, establishment, organisation and development of industries, cannot, by any stretch of imagination, be a function entrusted to a municipality or cannot be covered under the list of functions to be carried out by a municipality. However, at the same time, upliftment of oppressed people or backward classes such as Scheduled Castes, Schedule Tribes, Adivasis etc. (falling under the jurisdiction of the municipality) by providing them proper shelters, easy loans for business, encourage their children to study by giving them scholarships etc. could certainly be one of the functions of a municipality and would be covered under the head ‘planning for economic and social development’. We do not find the said entry to pertain, in anyway, to the establishment of industries or industrial development and the applicant appears to have interpreted the said entry as per his whims and fancies to suit his contention. Further, there are many means to achieve economic development of a state/country i.e. construction of shopping malls, hospitals, schools, roads, highways, tunnels, construction of residential and commercial buildings, expansion of railways, construction of new Railway stations and new airports, etc. which would create a lot of jobs, thus, increasing employment opportunities, reducing unemployment and usher in economic development in the long run. Similarly, effective and long term policies of the Government such as good monetary and fiscal policies, regulation of financial institutions, trade and tax policies, programs that provide infrastructure and services such as highways, parks, crime prevention, good and quality educational institutions etc. would also result in economic development and can also be covered under the head ‘planning for economic and social development’. Does this mean to say that all these activities would be covered under Entry of Sr.No.3 of the above list thereby meaning that all these activities are in relation to economic development and hence are covered under the functions entrusted to a municipality under Article 243 of the Constitution of India and therefore liable to exemption from GST under the provisions of Entry No.4 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017? We, therefore, are of the opinion that unless and until there is a specific entry pertaining to the establishment or development of industries in the aforementioned list, it cannot, by any stretch of imagination, be construed that the applicant is a Corporation that has been established to carry out activities in relation to functions entrusted to the municipalities under Article 243W of the Constitution of India merely on the grounds that establishment, organisation and development of industries would lead to economic development and would thus be covered under the aforementioned Entry No.3 of the list. In view of the above facts, we conclude that the applicant namely Gujarat Industrial Development Corporation is not eligible for the exemption mentioned at Entry No.4 of Notification No.12/2017-Central Tax(Rate) dated 28.06.2017 (as amended from time to time).
Read AAAR :- Gujarat Industrial Development Corporation is Government Entity
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
BRIEF FACTS
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