Case Law Details
In re Auto Cluster Development and Research Institute (GST AAR Maharashtra)
The Smart Cities Mission is a vision of the Government of India to drive economic growth and improve the quality of life of people by enabling local area development and harnessing technology, especially technology that leads to Smart outcomes, area-based development which will transform existing areas, including slums, into better planned ones, thereby improving liveability of the whole City. In some cases, new areas to be developed around cities in order to accommodate the expanding population in urban areas. To fulfill the vision of the Government of India, Smart Cities are coming up in various States and the Pimpri Chinchwad Smart City is one such project for which PCSCL has been formed with the support of the Government of Maharashtra also.
However, in the instant case, it is clearly seen that even though the pure service (renting of immovable property services) is provided to PCSCL, a Government Entity, the said service, per se, cannot be considered as an activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution, or entrusted to a Panchayat under Article 243 G of the Constitution because the activity of renting of immovable property does not find mention in either Article 243 G or Article 243 W of the Constitution.
In view of the above discussions, we are of the opinion that, Renting of immovable Property Services i.e. ‘Pure Service’ provided by the applicant to PCSCL, a Government Entity are not by way of any activity in relation to functions entrusted to a Municipality under article 243W of the Constitution or entrusted to a panchayat under article 243G of the Constitution and therefore, the impugned service supplied by the applicant is not exempt under the relevant provisions of Notification No.12/2017 Central Tax (Rate) dated 28/6/2017 as amended from time to time and therefore the applicant has to discharge GST @ 18%.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING,MAHARASHTRA
The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively ] by M/s. Auto Cluster Development and Research Institute, the applicant, seeking an advance ruling in respect of the following questions.-
1. Whether PCSCL is termed as Government or Local Authority of Government Authority or Governmental Entity as per GST Law
2. Whether PCSCL is eligible to take claim benefits of Government or Local Authority of Governmental Authority or Governmental Entity (eg. Exemption as per Notification No.12/2017 Central Tax (Rate) dated 28/6/2017)
3. Whether Renting of immovable Property Services provided to PCSCL exempt as per GST Law. If taxable then at what rate GST will be applicable.
4. Whether Utility charges recovered from PCSCL are exempt as per GST Law. If taxable then at what rate GST will be applicable
5. Whether PCSCL liable to deduct tax at source (GST TDS as per provisions of GST Law)?
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to’ the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and MGST Act.
2. FACTS AND CONTENTION – AS PER THE APPLICANT
2.1 The applicant, M/s. Auto Cluster Development and Research Institute (Auto Cluster) is a Company Limited by guarantee, formed under section 25 of Company Act 1956. Auto Cluster is Special Purpose Vehicle formed under cluster development scheme of Government of India. It aims to form clusters of enterprises having similar activities. A cluster, according to the programme, would be defined as a group of enterprises situated within an identifiable, contiguous and a practical area which produce similar products or render similar services. The cluster would have similar production process, energy consumption, technology used, pollution control measures, marketing strategies, communication channels and would face similar complications as well as opportunities in area on Pimpri Chinchwad Municipal Corporation (PCMC). It is non-profit making company. The Auto Cluster is headed by Commissioner, PCMC and management consists of Automotive Research Association of India, College of Engineering Pune & representatives of industry. It provides Testing, Inspection, Prototype, Renting of immovable Property and other allied services to industry.
2.2 Auto Cluster provides Renting of immovable Property Services to Pimpri Chinchwad Smart City Limited (PCSCL) and collects utility charges (eg. Electricity charges) from PCSCL as Reimbursement.
2.3 PCSCL is special purpose Vehicle former under Companies Act 2013 having sub category State Government Company. PCSCL is formed under smart city mission of Central Government. According to scheme, the shares of PCSCL are held by Government of Maharashtra and PCMC in ration of 50-50. The Management of PCSCL is controlled by Government of India, Government of Maharashtra. Currently the appointment of management governed by GR issued by Government of Maharashtra.
2.4 The basic purpose behind formation of PCSCL is to build various infrastructure facilities for public at larger infrastructural facilities includes Smart Water, Smart Sewerage, Smart Parking, Smart Environment, Smart School, School Health Monitoring, Public E toilet, Environment Education Park, Hawking Zone etc. Many of the infrastructure facilitates are in relation to list provided in Article 243W of Constitution of India. The financial assistance to build these infrastructure facilities were provided by Government of India as Grant and by the Government of Maharashtra & Pimpri Chinchwad Municipal Corporation by way of Share Capital.
B. STATEMENT CONTAINING APPLICANT’S INTERPRETATION OF LAW AND/OR FACTS
2.5 PCSCL is State Government Company jointly owned by Government of Maharashtra and PCMC. The management of PCSCL is controlled by Government of India, Government of Maharashtra. Currently the appointment of management governed by GR issued by Government of Maharashtra. Based on this fact, it can be concluded that, PCSCL is controlled by Governmental Authority.
2.6 As per the Smart City Mission as well as Memorandum of Association and Article of Association of PCSCL, it is engaged in providing infrastructural facility as per Article 243W of Constitution and Article 243G of Constitution.
2.7 Renting of immovable Property Services is pure service. Utility charges are reimbursement of cost of actual facility used as per bill issued & payable to third party. Considering all facts, Renting of immovable property and Reimbursement of utility charges will be exempted from GST as per Sr. 3, Chapter 99 of Notification No.12/2017 Central Tax (Rate) dated 28/6/2017.
03. CONTENTION – AS PER THE CONCERNED OFFICER:
OFFICER SUBMISSION 17.12.2020:-
3.1 M/s. Auto Cluster Development and Research Institute, the applicant, headed by the Commissioner of Pimpri Chinchwad Municipal Corporation (PCMC) is a special purpose vehicle formed under cluster development scheme of the Government of India and aims to form clusters of enterprises having similar activities.
Whether PCSCL is termed as Government or Local Authority or Government Authority or Government Entity as per GST Law?
3.2 Section (2) of CGST Act, 2017, defines the term “Government” and the term “Local Authority”. The terms “Government Authority” and “Government Entity” are not separately defined under the CGST Act. 2017.
3.3 It is claimed by the applicant that, PCSCL is a “Government Authority” by virtue of being jointly owned and controlled by the Government of Maharashtra and the local PCMC.
3.4 under the above statutory definitions, government and local authority can be understood as the bodies which are directly engaged in the governance or administration of the civil matters of the country. The citizens of the country elect their representatives to these bodies for being governed by them. Municipality means an institution of self-government constituted under Article 243Q..
3.5 It appears that PCSCL is a body created by the government and the local authority for specific purpose. However, it appears that the bodies such as PCSCL are not covered under the above definitions. It is apparently not a panchayat nor an institution of self-government.
Whether PCSCL is eligible to take claim benefits of Government or Local Authority of Government Authority or Government Entity (eg Exemption as per Notification No.12/2017 Central Tax (Rate) dated 28/6/2017.
3.6 It appears that Auto Cluster has applied for a ruling as to whether PCSCL is exempt from not being charged GST under the Notification No.12/2017 Central Tax (Rate) dated 28/6/2017 by virtue of being a Government Authority. In other words, whether Auto Cluster is exempt from charging GST to a Government Authority such as PCSCL. The exemption is worded in the notification as under:
“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.”
3.7 Auto Cluster is not engaged in 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.” Providing the service of renting of immovable property and utilities such as electricity are not municipal functions. As discussed above, PCSCL is not eligible for the said exemption as a recipient of service nor Auto Cluster is exempt from charging GST to them. Auto Cluster is providing a service for which they are receiving consideration. Therefore, they must pay GST.
Whether Renting of Immovable Property Services provided to PCSCL exempt as per GST Law. If taxable at what rate GST will be applicable.
3.8 Not exempt, PCSCL has to self-assess the services to GST from time to time by referring to the notifications etc., which are in public domain.
Whether utility charges recovered from PCSCL are exempt as per GST Law. If taxable then at what rate GST will be applicable.
3.9 Not exempt, PCSCL has to self-assess the services to GST from time to time by referring to the notifications etc which are in public domain.
Whether PCSCL liable to deduct tax at source (GST TPS) as per provisions of GST Act.
3.10 This is out of the purview of the Goods and Service Tax Act, 2017.
Officer Submission 29.01.2021(Via email)
3.11 Auto Cluster provides “Renting of Immovable Property Services” to Pimpri Chinchwad Smart City Limited (PCSCL). PCSCL is engaged in providing infrastructural facilities under the Constitution of India. Auto Cluster also collects utility charges (eg electricity charges) from PCSCL.
3.12 It is contended by applicant that, both the companies, Auto Cluster Development & Research Institute and the PCSCL are creations of the state government, and jointly managed by the state government and PCMC.
3.13 It appears that PCSCL is a body created by the government and the local authority for specific purpose. However, it appears that the bodies such as PCSCL are not covered under the above definitions. It is apparently not a panchayat nor an institution of self-government. As per the Memorandum of Association of the Pimpri-Chinchwad Smart City Limited, it is a public company registered under the Companies Act, 1956 in the year 2017. The PCSCL has been created to meet certain objectives, but the company itself cannot be looked upon as a government authority in common parlance.
04. HEARING
4.1 Preliminary e-hearing in the matter was held on 04.02.2021 Shri. Swarup Chingale, and Shri. Ruturaj Chingale, CA, both of them, Authorized representatives of the applicant, were present. Jurisdictional Officer Shri. Prashant Patil, Deputy Commissioner of CGST, Pune-1 was also present.
4.2 The application was admitted and called for final e-hearing on 26.11.2021. The Authorized representative of the applicant Shri. Swarup Chingale, CA, and Shri. Ruturaj Chingale, CA and Shri. Sunil Bhosale, PCSCL were present. Jurisdictional officer was absent. Applicant to produce copy of agreement/s and details of assets/property given on rent details of various charges i.e. what are those charges (how same are sourced and how same are supplied). The jurisdictional officer may file additional written submissions.
4.3 We heard both the sides.
5. OBSERVATIONS AND FINDINGS:
5.1 We have gone through the facts of the case, documents on record and written/oral contentions made by both, the applicant as well as the jurisdictional officer at the time of preliminary as well as the final hearings.
5.2 The applicant, M/s. Auto Cluster Development and Research Institute, a Special Purpose Vehicle formed under cluster development scheme of Government of India, headed by Commissioner Pimpri Chinchwad Municipal Corporation of Maharashtra (PCMC), provides Testing, Inspection, Prototype, Renting of immovable Property and other allied services to industry. The applicant provides Renting of immovable Property Services to Pimpri Chinchwad Smart City Limited (PCSCL) and also collects utility charges (eg. Electricity charger) from PCSCL as Reimbursement. In view of the submissions made by the applicant, we now take up their questions as under:-
Q.1 Whether PCSCL is termed as Government or Local Authority of Government Authority or Governmental Entity as per GST Law?
5.3.1 Section 95 of the CGST Act, 2017 states that, “advance ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
5.3.2 As per the submissions made, it is seen that the subject question raised is pertaining to the recipient of the impugned supply and is not ‘in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant’ and therefore cannot be answered in terms of the provisions of Section 95 of the CGST Act, 2017.
Q.2 Whether PCSCL is eligible to take claim benefits of Government or Local Authority of Governmental Authority or Governmental Entity (eg. Exemption as per Notification No.12/2017 Central Tax (Rate) dated 28/6/2017)?
5.4 We find that even Question No. 2 pertains to the recipient of the impugned supply and therefore cannot be answered in terms of the provisions of Section 95 of the CGST Act, 2017.
Q3. Whether Renting of immovable Property Services provided to PCSCL exempt as per GST Law. If taxable then at what rate GST will be applicable.
5.5.1 The applicant is a Company Limited by guarantee formed under section 25 of Company Act 1956, headed by Commissioner, Pimpri Chinchwad Municipal Corporation of Maharashtra, and has members from the Automotive Research Association of India, College of Engineering, Pune & other representatives of the industry and provides Testing, Inspection, Prototype, Renting of immovable Property and other allied services to industry.
5.5.2 The Renting of Immovable property service is provided by the applicant to PCSCL which, according to the applicant is a ‘Government Authority’ by virtue of being jointly owned and controlled by the Government of Maharashtra and the local municipal corporation of Pimpri Chinchwad i.e. PCMC in the ratio of 50:50.
5.5.3 As per applicant’s submissions, PCSCL is State Government Company jointly owned by Government of Maharashtra and PCMC whose management control is with Government of Maharashtra and the appointment of management governed by GR issued by Government of Maharashtra. The applicant has claimed that, the Renting of immovable property charges received by it will be exempted from GST as per Sr. 3, Chapter 99 of Notification No. 12/2017 Central Tax (Rate) dated 28/06/2017 being pure services supplied to PCSCL, since PCSCL is engaged in providing infrastructural facility as per Article 243W of Constitution and Article 243G of Constitution.
5.5.4 The exemption as per Sr. 3, Chapter 99 of Notification No. 12/2017 Central Tax (Rate) dated 28/06/2017, as amended is in respect of “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.”
5.5.5 The relevant Entry Sr. No. (3) of Notification No. 12/2017-CT(R) dated 28.06.2017 as amended by Notification No. 02/2018 – CTR dated 25.01.2018, is as under:-
| SI. No. | Chapter, Section, Heading, Group or Service Code (Tariff) | Description of Services | Rate (per cent) | Condition |
| (1) | (2) | (3) | (4) | (5) |
| 3 | Chapter 99 | 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 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution. | Nil | Nil |
5.5.6 For any supply to be covered under Sr No. 3, the supply should be in respect of only Pure Services, secondly such Pure Services must be provided to the Central Government, State Government or Union territory or local authority or a Governmental authority [or a Government Entity] and finally such services should be provided 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.
5.5.7 From the submissions made by the applicant we find that, in the instant case, pure services (in the form of Renting of Immovable Property services), are supplied by the applicant to PCSCL. Thus, the first part of the conditions mentioned at Sr. No. 3 of the aforesaid Notification is satisfied in the subject case.
5.5.8 The second condition to be satisfied for availing exemption under the above referred Notification is that such pure services, as are being rendered in the subject case, should be supplied to the Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity. Thus, we need to discuss whether PCSCL can be considered as a Central Government, State Government or Union territory or local authority or a Governmental authority or a Government Entity.
5.5.9 PCSCL cannot be considered as a Central Government, State Government or Union territory or local authority. Thus, we need to find whether PCSCL can be considered as a Governmental authority or a Government Entity, for which, we need to have a look at Notification No. 32/2017 Central Tax (Rate) dated 13th October, 2017 which is reproduced as under:-
Notification No. 32/2017 Central Tax (Rate) dated 13th October, 2017
G.S.R…(E).- 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 makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), Notification No.12/2017 Central Tax (Rate) dated 28/6/2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 691(E), dated the 28th June, 2017, namely:-
(ii) in paragraph 2, for clause (zf), the following shall be substituted, namely: -(zf) “Governmental Authority” means on authority or a board or any other body, –
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government, with 90 per cent, or more participation by way of equity or control, to carry out any function entrusted to a Municipality under article 243 W of the Constitution or to a Panchayat under article 243 G of the Constitution.
(zfa) “Government Entity” means an authority or a board or any other body including a society, trust, corporation,
(i) set up by an Act of Parliament or State Legislature; or
(ii) established by any Government,
with 90 per cent, or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority.”
5.5.10 In view of the above, we are required to ascertain whether ‘PCSCL’ would be covered under the definition of ‘Government Entity’/Governmental Authority” as given in Notification No. 32/2017 dated 13.10.2017 referred above.
5.5.11 As seen from para 5.5.9 above, a ‘Government Entity’ must be either set up by an Act of parliament or State Legislature or established by any Government, with 90 per cent, or more participation by way of equity or control, to carry out a function entrusted by the Central Government, State Government, Union Territory or a local authority”.
5.5.12 In the subject case, from the submissions made by the applicant, it is seen that, the Government of Maharashtra and the PCMC has 50:50 percent stake in PCSCL which would imply that PCSCL is controlled by the Government of Maharashtra since, PCMC is also a local authority under the Government of Maharashtra.
5.5.13 Thus from the above, we clearly find that PCSCL is constituted and established by the State Government of Maharashtra to carry out the function entrusted to it by the State Government i.e. to carry out the function of implementing Smart Cities Project of the Government of India, in the State of Maharashtra and therefore PCSCL is clearly covered under the definition of ‘Government Entity’ as can be seen from the definition of a ‘Government Entity’ mentioned above.
5.5.14 Further, the third condition of Entry No. (3) of Notification No. 12/2017-CT(R) dated 28.06.2017 is that pure services should be provided to a Government Entity, etc., 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.
5.5.15 Article 243W of the Indian Constitution states as under:-
“Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow:-
(a) The Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as maybe specified herein, with respect to-
i. The preparation of plans for economic development and social justice;
ii. The performance of functions and the implementation of schemes as may be entrusted to them including those in relation to matters listed in the twelfth Schedule.
(b) The Committees with such powers and authority as may be necessary to enable them to carry out the responsibility conferred upon them including those in relation to the matters listed in the Twelfth Schedule.”
5.5.16 Twelfth Schedule of the Indian Constitution provides for the following functions (relevant) under:-
1. Regulation of land use and construction of land buildings.
2. Urban planning including the town planning.
3. Planning for economic and social development
4. Urban poverty alleviation
5. Water supply for domestic, industrial and commercial purposes
6. Fire services
7. Public health sanitation, conservancy and solid waste management
8. Slum improvement and up-gradation
9. ………………………….
10. …………………………..
11 . Construction of roads and bridges
12 . Provision of urban amenities and facilities such as parks, gardens and playgrounds
13 . Promotion of cultural, educational and aesthetic aspects
14……………..
15……………..
16…………………
17 . Public amenities including street lighting, parking spaces, bus stops and public conveniences
18……………………..
5.5.17 Article 243G of the Indian Constitution states as under:-
Subject to the provisions of this Constitution the Legislature of a State may, by law, endow the Panchayats with such powers and authority and may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Panchayats, at the appropriate level, subject to such conditions as may be specified therein, with respect to:
(a) The preparation of plans for economic development and social justice;
(b) The implementation of schemes for economic development and social justice as may be entrusted to them including those in relation to the matters listed in the Eleventh Schedule
5.5.18 Eleventh Schedule of the Indian Constitution provides for the following functions as under:-
1. Agriculture, including agricultural extension.
2. Land improvement, implementation of land reforms, land consolidation and soil conservation. 3. Minor irrigation, water management and watershed development.
4. Animal husbandry, dairying and poultry.
5. Fisheries.
6. Social forestry and farm forestry.
7. Minor forest produce.
8. Small scale industries, including food processing industries.
9. Khadi, village and cottage industries.
10. Rural housing.
11. Drinking water.
12. Fuel and fodder.
13. Roads, culverts, bridges, ferries, waterways and other means of communication.
14. Rural electrification, including distribution of electricity.
15. Non-conventional energy sources
16. Poverty alleviation programme.
17. Education, including primary and secondary schools.
18. Technical training and vocational education.
19. Adult and non-formal education.
20. Libraries.
21. Cultural activities.
22. Markets and fairs.
23. Health and sanitation, including hospitals, primary health centres and dispensaries.
24. Family welfare.
25. Women and child development.
26. Social welfare, including welfare of the handicapped and mentally retarded.
27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes.
28. Public distribution system.
29. Maintenance of community assets.]
5.5.19 The Smart Cities Mission is a vision of the Government of India to drive economic growth and improve the quality of life of people by enabling local area development and harnessing technology, especially technology that leads to Smart outcomes, area-based development which will transform existing areas, including slums, into better planned ones, thereby improving liveability of the whole City. In some cases, new areas to be developed around cities in order to accommodate the expanding population in urban areas. To fulfill the vision of the Government of India, Smart Cities are coming up in various States and the Pimpri Chinchwad Smart City is one such project for which PCSCL has been formed with the support of the Government of Maharashtra also.
5.5.20 However, in the instant case, it is clearly seen that even though the pure service (renting of immovable property services) is provided to PCSCL, a Government Entity, the said service, per se, cannot be considered as an activity in relation to any function entrusted to a Municipality under Article 243W of the Constitution, or entrusted to a Panchayat under Article 243 G of the Constitution because the activity of renting of immovable property does not find mention in either Article 243 G or Article 243 W of the Constitution.
5.5.21 In view of the above discussions, we are of the opinion that, Renting of immovable Property Services i.e. ‘Pure Service’ provided by the applicant to PCSCL, a Government Entity are not by way of any activity in relation to functions entrusted to a Municipality under article 243W of the Constitution or entrusted to a panchayat under article 243G of the Constitution and therefore, the impugned service supplied by the applicant is not exempt under the relevant provisions of Notification No.12/2017 Central Tax (Rate) dated 28/6/2017 as amended from time to time and therefore the applicant has to discharge GST @ 18%.
Whether Utility charges recovered from PCSCL are exempt as per GST Law. If taxable then at what rate GST will be applicable
5.6.1 The applicant has mentioned only a couple of lines in respect of the said matter, namely it has been mentioned that, the applicant collects utility charges (eg. Electricity charges) from PCSCL as Reimbursement and the said Utility charges are reimbursement of cost of actual facility used as per bill issued & payable to third party.
5.6.2 Other than above the applicant has neither made detailed submissions nor have submitted the relevant agreements with PCSCL for collection of the said utility charges and in view of incomplete details we cannot answer the said question.
Whether PCSCL liable to deduct tax at source (GST TPS as per provisions of GST Law)?
5.7.1 GST Law mandates Tax Deduction at Source (TDS) vide Section 51 of the CGST/SGST Act 2017, Section 20 of the IGST Act, 2017 and Section 21 of the UTGST Act, 2017. GST Council in its 28th meeting held on 21.07.2018 recommended the introduction of TDS from 01.10.2018. The deductors of such TDS under section 51 of the CGST Act, 2017 read with notification No. 33/2017-Central Tax dated 15.09.2017 are as under:
(a) ……………………… ; or
(b) ……………………….; or
(c) ………………………..; or
(d) an authority or a board or any other body,-
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government, with fifty-one per cent, or more participation by way of equity or control, to carry out any function; or
(e) ………………………; or
(f) …………………………
5.7.2 TDS provision are made operative with effect from 01.10.2018 for which Notification No. 50/2018- Central Tax dated 13.09.2018 has already been issued in this regard by CBIC.
5.7.3 In view of the above, PCSCL is liable to deduct TDS in the subject case, in respect of payments made to the applicant against receipt of renting of immovable property services.
06. In view of the extensive deliberations as held hereinabove, we pass an order as follows:
ORDER
(under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
For reasons as discussed in the body of the order, the questions are answered thus –
Question 1:- Whether PCSCL is termed as Government or Local Authority of Government Authority or Governmental Entity as per GST Law?
Answer: – Not answered in view of discussions made above.
Question 2:- Whether PCSCL is eligible to take claim benefits of Government or Local Authority of Governmental Authority or Governmental Entity (eg. Exemption as per Notification No.12/2017 Central Tax (Rate) dated 28/6/2017?
Answer: – Not answered in view of discussions made above.
Question 3:- Whether Renting of immovable Property Services provided to PCSCL exempt as per GST Law. If taxable then at what rate GST will be applicable.
Answer: – Renting of immovable Property Services provided to PCSCL is not exempt as per GST Law and is taxable @ 18 % GST.
Question 4:- Whether Utility charges recovered from PCSCL are exempt as per GST Law. If taxable then at what rate GST will be applicable
Answer: – Not answered in view of discussions made above.
Question 5:- Whether PCSCL liable to deduct tax at source (GST TDS as per provisions of GST Law?
Answer: – Answered in the affirmative.
