In re Ahmedabad Municipal Transport Service (GST AAR Gujarat)
A. Whether AMTS would be qualified as ‘Local Authority’ as defined under the Central Goods and Services Tax Act, 2017?
Ans. The applicant merits qualification as ‘Local Authority’ as defined under the Central Goods and Service Tax Act, 2017.
B. Whether AMTS is liable to pay GST on procurement of security services received from any person other than body corporate under reverse charge mechanism, considering the exemption granted in Sl. No. 3 of Notification No. 12/2017 – Central Tax (Rate) or Sl. No. 3 of Notification No. 09/2017 – IGST (Rate)?
Ans. Negative in view of the above discussion.
C. Whether AMTS is required to pay GST on advertisement services or the service recipient of AMTS is required to pay GST under reverse charge mechanism considering Notification No. 13/2017-Central tax (Rate) dated 28-06-2017?
Ans. The service recipients of AMTS are required to pay GST under reverse charge mechanism on advertisement service in view of the above discussion.
D. Whether AMTS is required to be registered as a Deductor under GST as per the provision of Section 24 of the CGST Act?
Ans. Affirmative in view of the above discussion.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
M/s. Ahmedabad Municipal Transport Service is registered under GST and having a GSTIN: 24AAALA1563C1ZV, has filed an application for Advance Ruling under Section 97 of CGST Act, 2017 and Section 97 of the GGST Act, 2017 in FORM GST ARA-01 discharging the fees of Rs. 5,000/- each under the CGST Act and the GGST Act.
2. M/s. Ahmedabad Municipal Transport Service (hereunder referred to as ‘AMTS’ or ‘the Applicant’) is engaged in rendering passenger transportation services and runs public buses in the city of Ahmedabad within the limits of Municipal Corporation. The Constitution of Applicant is ‘local authority’ for GST registration as well as erstwhile Service Tax registration.
3. The applicant submitted that the roots of bus services in Ahmedabad dates back to year 1940 wherein very first resolution # 476 was passed by the Municipality on June 10, 1940 in the General Board meeting to begin transport services. The main purpose of the transport service was to avoid the population density in city area and thereby to provide affordable means of transportation facility for the citizens staying far from the main city area. The profit motive was not there at all at any stage.
4. The applicant submitted that until the year 1950, the transport department was considered as a section of Municipality. However, in the year 1950 a separate transport fund created and accordingly, separate accounts of AMTS service were started to be maintained. The first AMTS estimate Budget-‘B’ was presented in the General Meeting of Municipal Corporation by transport committee through standing committee in Dec. 1950.
5. Since the creation of a separate transport fund, AMTS is managed by Transport Manager under transport committee and Municipal Corporation in accordance with the powers derived from the Gujarat Provincial Municipal Corporations Act, 1949 (hereafter referred as ‘GPMC Act’).
6. The applicant submitted that “Local authority” as per GPMC Act means the Corporation of a City, a municipality for a municipal borough, a nagar panchayat, or as the case may be, a gram panchayat; and includes, where such Corporation, municipality or panchayat has been superseded or dissolved, the person or persons appointed to exercise the powers or to perform the functions of such Corporation, municipality or panchayat.
7. Further, the applicant submitted that the Corporation, as per GPMC Act, means the Municipal Corporation of the city. Thus, on conjoint reading, the municipal corporation can be contemplated as local authority. In light of this, it is essential to understand control & management and administration & funding of AMTS as per GPMC Act, which is reproduced hereunder for ease of understanding.
Control & management of AMTS
