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Case Law Details

Case Name : In re KSF-9 Corporate Services Private Limited (GST AAR Karnataka)
Appeal Number : Advance Ruling No. KAR ADRG 33/2024
Date of Judgement/Order : 02/07/2024
Related Assessment Year :
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In re KSF-9 Corporate Services Private Limited (GST AAR Karnataka)

In a recent ruling under GST laws, the Karnataka AAR addressed whether Bruhat Bengaluru Mahanagara Palike (BBMP) is exempt from GST for security services provided by M/s. KSF-9 Corporate Services Private Limited.

The applicant, KSF-9 Corporate Services, sought an advance ruling to determine if BBMP, under the provisions of Article 243-W of the Constitution, qualifies for GST exemption on security services outsourced from private agencies. The contention revolved around whether BBMP’s status as a local authority falls within the scope of GST exemption criteria outlined in Notification No.12/2017-Central Tax (Rate).

The AAR examined BBMP’s legal framework under the Karnataka Municipal Corporations Act, establishing its status as a municipal corporation and thus a local authority. However, to claim GST exemption, services must relate directly to functions entrusted under Article 243G (Panchayats) or Article 243W (Municipalities) of the Constitution. Despite BBMP’s local authority status, the services provided by KSF-9 Corporate Services were not directly related to functions listed under these Articles.

The ruling clarified that while BBMP qualifies as a local authority, the security services provided by KSF-9 Corporate Services do not meet the criteria for GST exemption under Notification No.12/2017 central Tax(R). This decision underscores the nuanced interpretation of GST exemptions concerning services provided to local authorities under specific constitutional provisions.

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