In re Webel Support Multipurpose Service Cooperate Society Limited (GST AAR West Bangal)
The West Bengal Authority for Advance Ruling (WBAAR), consisting of Shafeeq S and Jaydip Kumar Chakrabarti, issued a ruling concerning Webel Support Multipurpose Service Cooperate Society Limited. The applicant, a provider of pure labor services, sought clarification on their eligibility for GST exemption under Notification No. 12/2017-Central Tax (Rate) for services provided as a sub-contractor to Webel Technology Limited (WTL), which in turn provided manpower services to the Newtown Kolkata Development Authority (NKDA). NKDA is recognized as a local authority eligible for certain exemptions. Webel Support Multipurpose Service Cooperate Society Limited argued that since the ultimate recipient, NKDA, is exempt, and the service is “pure labor,” they, as sub-contractors, should also qualify for the exemption.
The WBAAR examined the specific conditions of Entry No. 3 of Notification No. 12/2017-Central Tax (Rate) which requires three simultaneous fulfillments: the supply must be a pure service, the service must be provided to a Central Government, State Government, Union Territory, or local authority, and it must relate to functions entrusted to a Panchayat or Municipality under Articles 243G or 243W of the Constitution. While the Authority agreed that NKDA qualifies as a local authority and the services provided by the applicant are pure labor services (e.g., Clerical Assistant, Data Entry Operator, etc.), the pivotal point of contention was whether the services were “provided to” NKDA.
