In re GITEC-IGIP GmbH (GST AAR Tamilnadu)
in this case the applicants are providing “Pure Services”, by way of rendering Consulting Services’ for Programme Management and Accompanying Measures for implementation of Integrated Strom Water Drain for M1 & M2 Components of Kovalam Basin in the extended area of Greater Chennai Corporation and the same is supplied to GCC, who is a “Local Authority”, represented by the Superintending Engineer, Strom Water Drain Department, Greater Chennai Corporation, Chennai. Also, the services are in relation to Entry No. 1 of the List as per the Twelfth Schedule under Article 243W of the Constitution of India i.e., Urban Planning including Town Planning. In view of the above facts, the applicant is eligible for the exemption claimed for such pure services.
10. In view of the foregoing, we rule as under: The Pure Services provided by the applicant by way of rendering Consulting Services for Programme Management and Accompanying Measures for implementation of Integrated Strom Water Drain for M1 & M2 Components of Kovalam Basin in the extended area of Greater Chennai Corporation, supplied to the Superintending Engineer, Strom Water Drain Department, Greater Chennai Corporation, Chennai vide the contract dated 03rd December 2020 are covered under S.No.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 and SGST Sl.No.3 of the No.II(2)/CTR/532(d-15)/2017 dated 29.06.2017 and exempted from payment of GST.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
Note: Any appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated.
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
Tvl. GITEC-IGIP GmbH, Cologne, Germany, having correspondence address at No. 131/9, Moti Towers 4th Floor, Kandanchavadi, Old Mahabalipuram Road, Perungudi, Chennai 600 096, is the Lead Partner of GITEC-IGIP GmbH, Cologne Germany and GITEC-IGIP India Pvt Ltd., Jaipur, India in Joint Venture with Mukesh & Associates, Salem, India and N. K. Buildcon Pvt Ltd., Jaipur India, (hereinafter called the ‘Applicant’). The applicant is not registered under the provisions of GST. They have sought Advance Ruling on the following question:-
Whether the Pure Services, supplied by M/s GITEC-IGIP, GmbH, Cologne, Germany, having an office at Chennai, by way of rendering Consulting Services for Programme Management and Accompanying Measures for implementation of Integrated Strom Water Drain for M1 & M2 Components of Kovalam Basin in the extended area of Greater Chennai Corporation, supplied to the Superintending Engineer, Strom Water Drain Department, Greater Chennai Corporation, Chennai are exempted from payment of GST as per the S.Np.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017
The Applicant has submitted the copy of application in Form GST ARA – 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/- each under sub-rule'(1) of Rule 104 of CGST rules 2017 and SGST Rules 2017.
2.1 The Applicants have stated that they have been awarded a contract by M/s Greater Chennai Corporation (GCC), Government of Tamil Nadu for providing Consulting Services for Programme Management and Accompanying Measures for implementation of Integrated Strom Water Drain for M1 & M2 Components of Kovalam Basin in the extended area of Greater Chennai Corporation. They undertake this project along with members of the Joint Venture. The supply of services are in the nature of Consulting Engineer, Architects Services and Technical Testing, Inspection, Certification, etc.
2.2 As per SI.No.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, “Pure Services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union Territory or Local Authority or a Governmental Authority or a Government Entity by way of any activity in relation to any function entrusted to a Panchayat under article 243 G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution” is exempted. As per Article 243 W of the Constitution, the Legislature of a State may, by law, endow the performance of functions and the implementation of schemes as may be entrusted to Municipalities etc., including those in relation to the matters listed in the Twelfth Schedule. As per the Twelfth Schedule to the article 243 W of the Constitution, there are 18 activities listed and the same are mentioned below for reference.-
TWELFTH SCHEDULE – (Article 243W)
1. Urban planning including town planning.; 2. Regulation of Land-use and Construction of buildings. ; 3. Planning for Economic and Social Development.; 4. Roads and bridges. ; 5. Water supply for Domestic, Industrial and Commercial Purposes. ; 6. Public health, Sanitation Conservancy and Solid Waste Management. ; 7. Fire services. ; 8. Urban forestry, protection of the environment and promotion of ecological aspects. ;9. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded. ; 10. Slum improvement and upgradation. ; 11. Urban poverty alleviation. ; 12. Provision of urban amenities and facilities such as parks, gardens, play grounds. ; 13. Promotion of cultural, educational and aesthetic aspects.; 14. Burials and burial grounds; cremations, cremation grounds; and electric crematoriums. ; 15. Cattle pounds; prevention of cruelty to animals. ; 16. Vital statistics including registration of births and deaths. ; 17. Public amenities including street lighting, parking lots, bus stops and public conveniences. ; 18. Regulation of slaughter houses and tanneries.
It could be seen in broader perspective that, the Consulting Services are in relation to the implementation of the scheme namely Integrated Strom Water Drain for M1 & M2 Components of Kovalam Basin in the extended area of Greater Chennai Corporation and can also be considered to be in relation to the activity namely “Urban planning including town planning”, at Sl.No.1 of the Twelfth Schedule to article 243W of the constitution. Since, the Greater Chennai Corporation, is falling under the definition of “Local Authority”, our Consulting Services as mentioned above are obviously exempted from the levy of GST by virtue of SI.No.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017. Though the consulting services supplied by them along with the members of the Joint Ventures namely M/s GITEC-IGIP India Pvt. Ltd., Jaipur, M/s Mukesh & Associates, Salem and M/s N.K.Buildcon Pvt Ltd., Jaipur, to the Greater Chennai Corporation are evidently exempted from the levy of GST for the reasons stated above, yet an advance ruling authenticating the exemption from levy of GST in this issue, will be of an immense support to them in delivering better tax compliance and following the statutory provisions scrupulously.
2.3 M/s Mukesh & Associates, Salem, one among the partners in the Joint Venture had already approached the AUTHORITY FOR ADVANCE RULING, TAMILNADU for the same issue and vide Order No.34/ARA/2021 dated 17.08.2021, the Competent Authority had given the Ruling by rejecting the application filed by M/s Mukesh & Associates as not admissible. In the Ruling, the Competent Authority found that it is the Joint Venture with the Registered seat of the association at Cologne, Germany is the ‘Person’ to whom the Project is awarded and not the applicant, M/s Mukesh & Associates, Salem. Thus the person who can make the application is the Joint Venture Company only and not the applicant, M/s Mukesh & Associates, Salem and hence the application is not admitted for consideration on merits.- Hence, M/s GITEC-IGIP GmbH, Germany, the lead partner of the Joint Venture has filed this application.
2.4 In support of their statement of relevant facts having a bearing on the question raised, they have drawn the attention of the Advance Ruling given by The Authority on Advance Rulings in Karnataka Goods and Services Tax, in the case of M/s. Vimos Technocrats Private Limited, Bengaluru in KAR ADRG 52/2020 dated 09.10.2020. Further, for a similar supply of Service provided by M/s GITEC IGIP Private Limited., M/s Madhya Pradesh Urban Development Company Ltd., [MPUDC], Urban Development and Housing Department had issued a letter to the supplier of service to the effect that “in the case of consultancy services, MPUDC is exempted from GST as per the SI.No.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017. In view of the above, they are of the strong view that the services of execution of Consulting Services for Programme Management and Accompanying Measures for implementation of Integrated Strom Water Drain for M1 & M2 Components of Kovalam Basin in the extended area of Greater Chennai Corporation supplied to the Superintending Engineer, Strom Water Drain Department, Greater Chennai Corporation are exempted from payment of GST by virtue of S.No.3 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017
3.1 Due to the Pandemic situation and not to delay the proceedings, the applicant was addressed seeking their willingness to appear for hearing in digital Mode. The Authorised representative, Shri. D.Mukesh, appeared for the hearing virtually on 21.12.202’1 and made a presentation on their submissions and reiterated the submissions. He referred to earlier order passed in respect of Tvl. Mukesh Associates and as GITEC has authorized them to file Advance Ruling Application they have filed it now, The authorized representative of the applicants was asked to furnish the following documents:-
1. Copy of agreement entered into with GCC
2. Write up on the entire scope of activity envisaged through the agreement
3. Details on whether any goods are supplied in the course of providing the consultancy services.
4. Copies of invoices.
3.2 The applicant submitted the Copy of agreement entered into with GCC in pursuance of the VPH held on 21.12.2021. They have also stated in the Write up on the entire scope of activity envisaged through the agreement that,-
> Objective of this Consulting Service Contract is to provide “Consulting Services for the Project Programme Management and Accompanying Measures for the Chennai Storm Water Drainage Programme, Ml and M2 Components of Kovalam Basin”.
> According to the Terms of Reference issued as part of Request for Proposal, the scope of consulting services of the Programme Management Consultant (PMC) activities include planning, preparation of detailed design and tender documents, assist the Greater Chennai Corporation in the selection of contractors, and supervise the construction activities for development of storm water drain system in the Kovalam Basin. Similarly, as part of Accompanying Measures Consultancy the Consultant have to assist the Greater Chennai Corporation with regard to the sustainability of the project investments. In this regard, the consultant have to prepare operation and maintenance manual, carry out citizen awareness campaigns, collaborate public and private storm water stakeholders and also involve civil society in the maintenance of assets created out of the project investments. In both cases, pure services are involved in the form of knowledge enhancement and efficiency enhancement and there is no procurement of goods in the Consultancy Services. Page 138 to 189 of consulting services contract agreement dated 03.12.2020 gives the detailed scope of consultancy services.
> They provide only ‘Services of the Human Resources’, for development of the storm water drainage system for GCC which constitutes only ‘Pure Services’ and do not cover procurement of goods. They enclosed the Copies of invoices raised on GCC dated 30 December 2020;23.03.2021 Rei/014-21; 22.06.2021 Rei/019-21; 08.09.2021 Rei/020-21 and 17.12.2021 Rei/045-21.
4. The State Jurisdictional Authority, Assistant Commissioner (ST) (FAC), Thiruvanmiyur Assessment Circle, who has the administrative Jurisdiction over the applicant vide letter RC. No. 982/2021/A4, dated: 22.10.2021 has stated that:-
