In re Ernst And Young LLP (GST AAR Karnataka)
GST not exempt on professional services for assistance in filing of corporate tax returns provided by Ernst And Young LLP to BWSSB
Ernst and Young LLP (EY), engaged in auditing, accounting, and taxation services, filed an application seeking an advance ruling under Section 97 of the CGST Act, 2017. The query pertained to whether their professional services provided to the Bangalore Water Supply & Sewerage Board (BWSSB) for assistance in filing corporate tax returns qualified for GST exemption under Notification 12/2017 Central Tax (Rate).
Key Arguments and Interpretations: EY argued that their services should be exempt under the notification, which exempts pure services provided to government entities or local authorities for functions entrusted to them under the Constitution. They contended that BWSSB, akin to a local authority, performs essential public duties like water supply and sewage disposal under the Bangalore Water Supply and Sewerage Board Act, 1964.
They further supported their claim by citing the definition of “pure services” as per GST laws, asserting that their service of assisting in tax return filing does not involve the supply of goods, thus meeting the exemption criteria.
Authority’s Findings and Decision: Upon review, the Authority for Advance Ruling (AAR) clarified that while BWSSB performs vital public functions, it does not qualify as a government entity or local authority as defined under GST laws. Therefore, EY’s services to BWSSB do not meet the criteria for GST exemption as per Notification No. 12/2017-Central Tax (Rate).
