In re Webel Support Multipurpose Service Cooperate Society Limited (GST AAR West Bengal)
West Bengal Authority for Advance Ruling (AAR) has ruled that Webel Support Multipurpose Service Co-operative Society Limited (the applicant) is not entitled to tax exemption on the supply of manpower services under the Goods and Services Tax (GST) framework. The applicant, a registered cooperative society, provides manpower services under a contract with Webel Technology Limited (WTL), a government undertaking. These services are used by the Public Health Engineering Directorate for the “Jal Jeevan Mission” project in West Bengal. The applicant sought clarification on whether their services qualified as exempt under Notification No. 12/2017-Central Tax (Rate), which exempts certain supplies to the government.
In its order dated December 20, 2024, the AAR held that the applicant was providing services to WTL and not directly to the Public Health Engineering Department, Government of West Bengal. As a result, the exemption under Serial No. 3 of Notification No. 12/2017-Central Tax (Rate) did not apply. The ruling clarified that the exemption is applicable only when the supply is made directly to government bodies, whereas in this case, WTL was an intermediary entity. Consequently, the manpower supply was deemed taxable.
Following this ruling, the applicant sought rectification of the order, arguing that WTL itself had obtained an exemption for providing similar services to the Public Health Engineering Department. The applicant contended that since their supply was ultimately for the same government project, they should also qualify for the exemption. However, the AAR rejected this request, citing Section 102 of the GST Act, which allows rectification only for errors apparent on the face of the record. The AAR noted that the applicant’s claim involved a legal interpretation rather than a clear mistake, making rectification inappropriate. The ruling referenced the Supreme Court’s decision in T.S. Balaram, ITO v. Volkart Bros (1971) 82 ITR 40 (SC), which established that rectifiable mistakes must be “obvious and patent,” not issues requiring extensive legal reasoning.
