In re C M S Engineering Concern (AAR West Bengal)
Whether services provided by the applicant to the Directorate of Public Health Engineering, Government of West Bengal for operation of water pump and safeguarding pumping machinery at various Pump Houses for supply of drinking water is exempt from payment of tax?
Pure services (without involvement of any supply of goods) provided by the applicant to Directorate of Public Health Engineering, Government of West Bengal, as enumerated in the application, is exempt from GST vide entry serial number 3 of the Notification No. 1136 F.T. dated 28.06.2017 [corresponding central Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017], as amended from time to time.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING WEST BENGAL
1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression ‘GST Act’ would mean the CGST Act and the WBGST Act both.
1.2 C M S Engineering Concern (hereinafter referred to as, the applicant) is stated to be engaged in operation of water pump and safeguarding pumping machinery at various Pump Houses in different districts like South 24 Parganas, North 24 Parganas, Howrah, Nadia etc. for supply of drinking water to the public and hospitals upon receipt of work order from Directorate of Public Health Engineering, Government of West Bengal (herein after referred to as, the PHE Directorate).
1.3 The applicant is of the opinion that he provides services to local authority, i.e., Panchayat and Municipality whose power and duties are described in Article 243G and Article 243W of the Constitution of India. The services are described in Eleventh and Twelfth Schedule of the Constitution of India attached to Article 243G (Panchayat) and Article 243W (Municipality). Both of the said Schedules contain ‘Drinking Water’ and ‘Water supply for domestic, industrial and commercial purposes’.
1.4 According to the applicant, the services provided by him is a pure service which does not involve any supply of goods. Further, such services is provided to local authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution of India or in relation to any function entrusted to a Municipality under Article 243W of Constitution of India and therefore the services is exempt from taxation vide entry serial number 3 of the Notification No. 1136 F.T. dated 28.06.2017, [corresponding central Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017], as amended from time to time.
1.5 Based on the aforesaid nature of supply, the applicant has sought advance ruling on issue as to whether the services provided by him is exempt from GST or not. In other words, whether the aforesaid supply of services shall get covered under entry serial number 3 of the Notification No. 1136 F.T. dated 28.06.2017.
1.6 The aforesaid question on which the advance ruling is sought for is found to be covered under clause (b) of sub-section (2) of section 97 of the GST Act.
1.7 The applicant states that the question raised in the Application has neither been decided by nor is pending before any authority under any provision of the GST Act.
1.8 The officer concerned from the Revenue has raised no objection to the admission of the Application.
1.9 The application is, therefore, admitted.
2. Submission of the applicant
2.1 The authorised representative of the applicant has appeared for personal hearing proceedings and reiterated the submissions as narrated above.
2.2 The applicant has placed his reliance further on an advance ruling pronounced by the West Bengal Authority for Advance Ruling in the matter of Mahendra Roy (Case No. 35 of 2019) where the applicant is stated to be providing conservancy/solid waste management service to the Conservancy Department of the Howrah Municipal Corporation. The AAR held that the supply is exempt from the payment of GST under Sl No. 3 of Notification No. 12/2017 – Central Tax (Rate) dated 28.06.2017 (corresponding State Notification No. 1136 -FT dated 28/06/2017),as amended from time to time.
3. Submission of the Revenue
3.1 The concerned officer from the revenue has expressed his view as under:
The services rendered by the applicant for supervision of electrical installation and operating and guarding of pumping machinery is a supply of services in the form of works contract or job work. These supplies in no ways are sovereign service of the government. Therefore the stated services could not be considered as services fall under the purview of article 243G and 243W of the constitution.
4. Observations & Findings of the Authority
4.1 We have gone through the records of the issue as well as submissions made by the authorised representatives of the applicant during the course of personal hearing. We have also considered the submission made by the officer concerned from the Revenue.
4.2 The question of the applicant pertains to entry serial No. 3 of the Notification No. 1136 F.T. dated 28.06.2017 which reads as follows:-
