In re Aarav Consultancy Services Pvt. Ltd. (GST AAR Chhattisgarh)
GST exemption on the service of survey and preparation of detailed project report for water supply schemes for Panchayats/Municipalities under JAL Jeevan Mission.
i. The services of survey and preparation of detailed project report (DPR) for water supply schemes for Parchayats/Municipalities under Jal Jeevan Mission through Public Health Engineering department Government of Chhattisgarh provided by the applicant, M/s Aarav Consultancy Services Pvt. Ltd. Raipur are eligible for exemption from GST as provided under Sr. 3 of Notification Number 12/2017-Central Tex (Rate) New Delhi, dated 28th June,2017 as amended, being pure services as per the definition and the services rendered thereby being listed in article 243G of Constitution as functions pertaining to Panchayat.
ii. No deduction of TDS is warranted in respect of payment received by M/s Aarav Consultancy Services Pvt. Ltd., Raipur, the applicant against above services rendered by them which are exempted as per principal notification No. 12/2017 – Central Tax (Rate) dated 28th June, 2017 as amended.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, CHHATTISGARH
M/s Aarav Consultancy Services Pvt. Ltd. , Raipur-492001 Chhattisgarh GSTIN-22AANCA6885D1ZK [hereinafter also referred to as the applicant] has filed an application U/s 97 of the Chhattisgarh Goods & Services Tax Act, 2017 for dated 08.12.2021 enclosing duly filled in Form ARA-01 (the application form for Advance Ruling) along with certain annexure and attachments seeking advance ruling regarding. GST exemption on the services of survey and preparation of detailed project report (DPR) for water supply schemes for Panchayats/Municipalities under JalJeevan Mission under Notification Number 12/2017-Central Tax (Rate) New Delhi, dated 28th June,2017 and subsequent amendments (SL. No. 3: Pure Services) and applicability of 2% TDS deduction on the payments made with regard to above services.
2. Facts of the case: –
2.1 M/s. Aarav Consultancy Services Pvt. Ltd., having registered office at SR. MIG. 490, MPHB COLONY, DD NAGAR, DANGNIYA, SECTOR 1, RAIPUR, Raipur, Chhattisgarh, 492001 and having GST No. 22AANCA6885D1ZK; have been working for preparation of Detailed Project Report of water supply schemes of Gram Panchayats in different District of Chhattisgarh State under JalJeevan Mission through PHE Department, Chhattisgarh.
2.2 The applicant has informed that they are engaged by Public Health Engineering Department (PHED), Chhattisgarh for preparation of detailed project report for various Gram Panchayats in the state of Chhattisgarh under JalJeevan Mission. The scope of service being as under –
(i) Carrying out topographical survey Total station survey and review of the data available for survey work and planning of the schemes for water supply schemes under and as per the guidelines of JalJeevan Mission and CG PHE
(ii) Preparation of detailed designs of all the components of the Retrofitting/SVS and preparation of cost estimates based on CG PHE USOR-2020. Calculation of annual maintenance cost and other standard features of the Scheme and formulation of salient features and report for the complete water supply scheme.
(iii) Preparation of drawings such as Index plan, key plan, flow diagram, plotting and corrections to the L sections of pumping/ Gravity mains. Preparing the BOQ of all the components as per the instructions of Engineer in Charge. Submission of the scheme in soft copy & 5 hard copies
(iv) Preparation of power point presentation, compliance of the remarks till the final approval
2.3 It has been applicants’ contention that the scope of services as mentioned above is a Pure Services case, since no supply of materials or construction activities involve in our scope of work and hence eligible for exemption vide Notification No. 12/2017- Central Tax (Rate) New Delhi, dated 28th June, 2017 and subsequent amendments
2.4 Further that they are filing this advance ruling application to get the clarification on GST exemption as per the GOI vide Notification No. 12/2017- Central Tax (Rate) New Delhi, dated 28th June, 2017 and subsequent amendments and that as per SI. No. 3 of the said notification, GST rate is nil on “Pure Services” case, which says –
“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 by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution.”
2.5 Furthermore, the water supply service is listed in 11th and 12th Schedule to the Constitution (Details 243G and 243W) as function pertaining to Panchayats and Municipality respectively.
3. Contentions of the applicant: –
3.1 The applicant is of the opinion that the survey and preparation of Detailed Project Report for water supply systems for Panchayats/ Municipalities is a “Pure Services” case as the services is listed in 11th and 12th Schedule to the Constitution (Details 243G and 243W) as function pertaining to Panchayats and Municipality respectively and as per the definition, it qualifies as “Pure Services” and that their scope of services involve no supply of materials or any construction activities. Hence the same is eligible for GST exemption.
3.2 Since the above-mentioned services come under GST exemption, 2% TDS on GST shall not be applicable, whereas their client (PHED) wants to deduct 2% TDS on GST and accordingly they seek clarification/ruling in the matter.
4. Personal Hearing:-
Keeping with the established principles of natural justice, personal hearing in the matter was extended to the applicant in person, as requested by them and accordingly, Shri Loknath Sahu, Director of the Applicant appeared before us for hearing on 13.01.2022 and reiterated their contention. He also furnished a written submission dated 13.01.2022 along with sample copies of work order which has been taken on record.
5. The legal position, analysis and discussion: –
At the very outset, we would like to make it clear that the provisions for implementing the CGST Act and the Chhattisgarh GST Act, 2017 [hereinafter referred to as “the CGST Act and the CGGST Act”] are similar and thus, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the CGST Act, 2017. Now we sequentially proceed to discuss the issues involved it the ruling so sought by the applicant and the law as applicable in the present case.
6. Section 96 of CGST Act, 2017, Authority for advance ruling, stipulates as under: –
Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory.
Section 97(2) of CGST Act, 2017 stipulates that: –
The question, on which the advance ruling is sought under this Act, shall be in respect of—
(a) classification of any goods or services or both;
(b) applicability of a notification issued under the provisions of this Act;
(c) determination of time and value of supply of aoods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.
Further 103 of CGST Act, 2017 stipulates about the ruling pronounced as under: -The advance ruling pronounced by ‘the Authority or the Appellate Authority under this Chapter shall be binding only
a. On the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling;
b. On the concerned officer or the jurisdictional officer in respect of the applicant.
Thus, in view of the above section 103 of CGST Act, 2017, the ruling so sought by the Applicant would be binding only on the Applicant and on the concerned officer or the jurisdictional officer as stipulated above.
7. Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017 as amended stipulates at SI. No. 3 of the notification that GST rate is nil on “Pure Services” case, as under-
Government of India
Ministry of Finance (Department of Revenue)
Notification No. 12/2017- Central Tax (Rate) New Delhi, the 28th June, 2017
In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intro-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely:-
TABLE
